Exhibit 10.2

 

Pursuant to 17 C.F.R. § 240.24b-2, confidential information (indicated by [***])
has been omitted and has been filed separately with the Securities and Exchange
Commission pursuant to a Confidential Treatment Application filed with the
Commission.

 

EXECUTION VERSION

 

LICENSE AGREEMENT

 

BY AND BETWEEN

 

ELI LILLY AND COMPANY

 

AND

 

UNITED THERAPEUTICS CORPORATION

 

DATED

 

NOVEMBER 14, 2008

 

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

 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

ARTICLE 1 Definitions

 

1

 

 

 

 

1.1

“Adverse Event”

 

1

1.2

“Affiliate”

 

2

1.3

“Applicable Law”

 

2

1.4

“Business Day”

 

2

1.5

“Business Opportunity”

 

2

1.6

“Calendar Quarter”

 

2

1.7

“Calendar Year”

 

2

1.8

“Change of Control”

 

2

1.9

“Commercialize”

 

2

1.10

“Commercialization Plan”

 

3

1.11

“Commercially Reasonable Efforts”

 

3

1.12

“Competitive Product”

 

3

1.13

“Compound”

 

3

1.14

“Confidential Information”

 

3

1.15

“Confidentiality Agreement”

 

3

1.16

“Control”

 

3

1.17

“Corporate Marks”

 

3

1.18

“Detail” or “Detailing”

 

3

1.19

“Development”

 

3

1.20

“Dollar” or “$”

 

4

1.21

“Domain”

 

4

1.22

“Effective Date”

 

4

1.23

“Existing Patents”

 

4

1.24

“FDA”

 

4

1.25

“Field”

 

4

1.26

“GAAP”

 

4

1.27

“Glaxo ICOS License”

 

4

1.28

“GMP”

 

4

1.29

“ICOS”

 

4

1.30

“ICOS Lilly Agreements”

 

4

1.31

“Indemnitee”

 

4

1.32

“Information”

 

4

1.33

“Invention”

 

5

1.34

“JSC” or “Joint Steering Committee”

 

5

1.35

“Lilly Commercialization Activities”

 

5

1.36

“Lilly Know-How”

 

5

1.37

“Lilly Patents”

 

5

1.38

“Lilly Product Marks”

 

5

1.39

“Manufacturing and Supply Agreement”

 

5

1.40

“Net Sales”

 

6

1.41

“New Patents”

 

6

1.42

“Ongoing Lilly Trials”

 

6

 

i

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1.43

“Patents”

 

6

1.44

“Product”

 

6

1.45

“Promotion” or “Promote”

 

6

1.46

“Pulmonary Arterial Hypertension” or “PAH”

 

7

1.47

“Quality Agreement”

 

7

1.48

“Reasonable Cost”

 

7

1.49

“Regulatory Approval”

 

7

1.50

“Regulatory Authority”

 

7

1.51

“Regulatory Filings”

 

7

1.52

“Safety Agreement”

 

7

1.53

“Secondary Indication”

 

7

1.54

“Term”

 

7

1.55

“Territory”

 

7

1.56

“Third Party”

 

7

1.57

“United Therapeutics Commercialization Activities”

 

7

1.58

“United Therapeutics Know-How”

 

8

1.59

“United Therapeutics Promotional Materials”

 

8

1.60

“United Therapeutics Sales Representative”

 

8

1.61

“Useful”

 

8

1.62

“Valid Claim”

 

8

 

 

 

 

ARTICLE 2 Grant of Rights

 

8

 

 

 

 

2.1

License Grant to United Therapeutics

 

8

2.2

License Grant to Lilly

 

8

2.3

Sublicensing

 

9

2.4

Right of First Negotiation

 

9

2.5

Representation and Warranty, and Negative Covenant

 

10

2.6

Potential Preferred Partners

 

10

2.7

No Other Rights

 

11

 

 

 

 

ARTICLE 3 Governance

 

11

 

 

 

 

3.1

General

 

11

3.2

Joint Steering Committee

 

11

3.3

Areas Outside the JSC’s Authority

 

13

3.4

Operating Principles

 

14

3.5

Alliance Managers

 

16

3.6

Independence

 

16

 

 

 

 

ARTICLE 4 Joint Obligations and Diligence

 

17

 

 

 

 

4.1

Conduct of the Parties

 

17

4.2

Commercially Reasonable Efforts

 

17

4.3

Initial Transfer of Know-How

 

17

4.4

Sharing of Development and Commercialization Information

 

17

4.5

Sharing of Market Research

 

18

 

ii

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

 

4.6

Duty to Confer and Consult

 

18

4.7

Quality Agreement

 

18

 

 

 

 

ARTICLE 5 Development and Regulatory Activities

 

18

 

5.1

Current Status of Development of Product

 

18

5.2

Clinical Development Activities.

 

18

5.3

Regulatory Matters

 

20

5.4

Interactions with Authorities; Regulatory Inquiry, Inspection, and Audit

 

23

5.5

Drug Safety

 

24

5.6

Product Withdrawals and Recalls

 

25

5.7

Development Expenses

 

25

 

 

 

 

ARTICLE 6 Commercialization

 

26

 

 

 

 

6.1

Principles of Commercialization

 

26

6.2

Commercialization Plan

 

27

6.3

Commercialization Activities

 

27

6.4

Commercialization Costs

 

28

6.5

Advertising and Promotional Materials

 

28

6.6

United Therapeutics Sales Representatives

 

29

6.7

Complaints and Inquiries

 

30

6.8

Product Selling Prices

 

30

6.9

Product Integrity

 

31

6.10

Lilly Covenant Not to Compete

 

31

 

 

 

 

ARTICLE 7 Payment

 

31

 

 

 

 

7.1

Upfront Payment

 

31

7.2

Royalty Payments

 

31

7.3

Payments and Reports

 

32

7.4

Taxes

 

32

7.5

Wire Transfers

 

33

7.6

Audit Rights

 

33

7.7

Late Payments

 

34

7.8

Payments to United Therapeutics

 

34

 

 

 

 

ARTICLE 8 Inventions and Patents

 

34

 

 

 

 

8.1

Inventions

 

34

8.2

Patent Prosecution

 

35

8.3

Pediatric Exclusivity in the Territory

 

36

8.4

OTC Rights; Authorized Generic in the Territory

 

36

8.5

Infringement Defense

 

37

8.6

Enforcement of Patent Rights

 

37

8.7

Enforcement of Other Government-Conferred Rights

 

38

8.8

Information and Updates

 

38

8.9

No Challenges to the Lilly Patents

 

39

 

iii

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ARTICLE 9 Trademark Usage and Maintenance

 

39

 

 

 

 

9.1

Ownership of Trademarks

 

39

9.2

Lilly Product Marks License Grant

 

39

9.3

Use of the Trademarks

 

39

9.4

Quality Control

 

40

9.5

Use of Trademark Designations

 

40

9.6

Infringement of Lilly Product Marks

 

41

9.7

Costs

 

41

9.8

Third-Party Trademark Claims

 

41

 

 

 

 

ARTICLE 10 Representations, Warranties, and Covenants

 

41

 

 

 

 

10.1

Representations, Warranties and Covenants

 

41

10.2

Representations and Warranties of Lilly

 

42

10.3

Covenant of United Therapeutics

 

45

10.4

Disclaimer

 

45

 

 

 

 

ARTICLE 11 Confidentiality

 

45

 

 

 

 

11.1

Treatment of Confidential Information

 

45

11.2

Exceptions

 

45

11.3

Authorized Disclosures

 

46

11.4

Securities Filings

 

47

11.5

Publicity

 

47

11.6

Publication

 

47

11.7

Patient Information

 

48

11.8

Confidentiality Agreement

 

48

 

 

 

 

ARTICLE 12 Indemnification

 

48

 

 

 

 

12.1

Indemnification by United Therapeutics

 

48

12.2

Indemnification by Lilly

 

49

12.3

Procedure

 

49

12.4

Insurance

 

50

12.5

No Consequential or Punitive Damages

 

50

 

 

 

 

ARTICLE 13 Term and Termination

 

50

 

 

 

 

13.1

Term

 

50

13.2

Unilateral Termination by United Therapeutics

 

51

13.3

Material Breach

 

51

13.4

Unilateral Termination by Lilly

 

51

13.5

Consequences of Expiration or Termination

 

52

13.6

Survival

 

56

13.7

No Waiver of Remedies

 

56

 

iv

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

 

ARTICLE 14 Dispute Resolution

 

56

 

 

 

 

14.1

Disputes

 

56

14.2

Governing Law; Dispute Resolution

 

57

 

 

 

 

ARTICLE 15 Miscellaneous

 

58

 

 

 

 

15.1

Entire Agreement

 

58

15.2

Assignment

 

58

15.3

Amendments

 

59

15.4

Bankruptcy

 

59

15.5

Non-Waiver

 

59

15.6

Severability

 

59

15.7

Notice

 

59

15.8

Further Assurances

 

60

15.9

Force Majeure

 

60

15.10

Independent Contractors

 

61

15.11

Performance by Affiliates

 

61

15.12

No Third Party Beneficiaries

 

61

15.13

Interpretation

 

61

15.14

Counterparts

 

62

 

v

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

 

EXHIBITS

 

 

 

 

 

Exhibit 1.13

 

Compound

 

 

 

Exhibit 1.37

 

Lilly Patents

 

 

 

Exhibit 1.44

 

Product

 

 

 

Exhibit 1.52

 

Safety Agreement Table of Contents

 

 

 

Exhibit 5.1

 

Ongoing Lilly Trials

 

 

 

Exhibit 5.2(f)

 

[***]™ Phase IV Clinical Plan

 

 

 

Exhibit 6.2

 

Commercialization Plan

 

 

 

Exhibit 7.5

 

Wire Instructions

 

 

 

Exhibit 10.2(j)

 

Encumbrances and Licenses

 

 

 

Exhibit 10.2(k)

 

Claims, Actions, Suits or Proceedings

 

 

 

Exhibit 10.2(p)

 

Alleged Inventor Claims, Actions, Suits or Proceedings

 

 

 

Exhibit 11.5

 

Press Release

 

vi

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LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into as of
November 14, 2008 (the “Execution Date”), effective as of the Effective Date, by
and between Eli Lilly and Company, an Indiana corporation, having its principal
place of business at Lilly Corporate Center, Indianapolis, Indiana 46285,
(“Lilly”) and United Therapeutics Corporation, a Delaware corporation, having
its principal place of business at 1110 Spring Street, Silver Spring, Maryland
20910 (“United Therapeutics”).  Lilly and United Therapeutics are referred to
individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, as of the Execution Date, Lilly is manufacturing and selling its
proprietary active pharmaceutical ingredient tadalafil under the brand name
Cialis® for treatment of erectile dysfunction;

 

WHEREAS, Lilly is developing and seeking regulatory approval for, and intends to
manufacture and sell, tadalafil under a separate Lilly brand name for treatment
of pulmonary arterial hypertension, and owns or otherwise controls certain
related intellectual property rights;

 

WHEREAS, United Therapeutics has developed proprietary methods and know-how
regarding the development, marketing, promotion, and commercialization of
pharmaceutical products for the treatment of pulmonary hypertension;

 

WHEREAS, Lilly wishes to grant to United Therapeutics, and United Therapeutics
wishes to accept, certain rights to market, promote, and commercialize tadalafil
under a separate Lilly brand name for the treatment of pulmonary hypertension;
and

 

WHEREAS, contemporaneously with the execution of this Agreement, Lilly and
United Therapeutics are entering into a manufacturing and supply agreement
pursuant to which Lilly and/or its Affiliates (as defined below) will supply
tadalafil under such separate Lilly brand name to United Therapeutics for
commercialization purposes, and a stock purchase agreement for the purchase by
Lilly of certain common stock of United Therapeutics;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE 1

DEFINITIONS

 

The following terms shall have the following meanings as used in this Agreement:

 

1.1          “ADVERSE EVENT” SHALL MEAN ANY UNDESIRABLE MEDICAL OCCURRENCE IN A
PATIENT OR CLINICAL INVESTIGATION SUBJECT ADMINISTERED A PHARMACEUTICAL PRODUCT
AND WHICH DOES NOT NECESSARILY HAVE TO HAVE A CAUSAL RELATIONSHIP WITH THE
TREATMENT, INCLUDING ANY VARIANT OF AN “ADVERSE DRUG EXPERIENCE” AS THOSE TERMS
ARE DEFINED AT EITHER 21 C.F.R. SECTION 312.32 OR 21

 

1

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

 

C.F.R. SECTION 314.80 AND THE RELEVANT NON-FDA EQUIVALENTS, WHETHER ARISING IN
OR OUTSIDE OF A CLINICAL STUDY.

 

1.2          “AFFILIATE” SHALL MEAN (A) AN ENTITY THAT OWNS DIRECTLY OR
INDIRECTLY A CONTROLLING INTEREST IN A PARTY, BY STOCK OWNERSHIP OR OTHERWISE,
(B) ANY ENTITY IN WHICH A PARTY OWNS A CONTROLLING INTEREST, BY STOCK OWNERSHIP
OR OTHERWISE, OR (C) ANY ENTITY UNDER COMMON CONTROL WITH A PARTY, DIRECTLY OR
INDIRECTLY.  SOLELY FOR PURPOSES OF THE FOREGOING SENTENCE, “CONTROLLING
INTEREST” AND “CONTROL” SHALL MEAN THE POWER, WHETHER OR NOT EXERCISED, TO
DIRECT THE MANAGEMENT AND AFFAIRS OF A PARTY, DIRECTLY OR INDIRECTLY, WHETHER
THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT, OR OTHERWISE.  THE
DIRECT OR INDIRECT OWNERSHIP OF FIFTY PERCENT (50%) OR MORE OF A PARTY’S
OUTSTANDING VOTING SECURITIES SHALL IN ANY CASE BE DEEMED TO CONFER “CONTROL.”

 

1.3          “APPLICABLE LAW” SHALL MEAN ALL LAWS, STATUTES, ORDINANCES, CODES,
RULES, AND REGULATIONS THAT HAVE BEEN ENACTED BY A GOVERNMENT AUTHORITY AND
WHICH ARE IN FORCE AS OF THE EFFECTIVE DATE OR COME INTO FORCE DURING THE TERM,
IN EACH CASE TO THE EXTENT THAT THE SAME ARE APPLICABLE TO THE PERFORMANCE BY
THE PARTIES OF THEIR RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT, INCLUDING,
WITH RESPECT TO THE UNITED STATES, THE PRESCRIPTION DRUG MARKETING ACT, THE
FEDERAL FOOD, DRUG AND COSMETICS ACT OF 1938, AS AMENDED, THE HEALTH INSURANCE
PORTABILITY AND ACCOUNTABILITY ACT, THE FEDERAL ANTI-KICKBACK STATUTE, AND ANY
APPLICABLE FDA REGULATIONS RELATING TO SAMPLING PRACTICES.

 

1.4          “BUSINESS DAY” SHALL MEAN ANY DAY THAT IS NOT A SATURDAY OR A
SUNDAY OR A DAY ON WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED.

 

1.5          “BUSINESS OPPORTUNITY” SHALL HAVE THE MEANING SET FORTH IN
SECTION 2.4(A).

 

1.6          “CALENDAR QUARTER” SHALL MEAN EACH OF THE THREE (3) MONTH PERIODS
ENDING ON MARCH 31, JUNE 30, SEPTEMBER 30, AND DECEMBER 31, PROVIDED THAT THE
FIRST CALENDAR QUARTER DURING THE TERM SHALL COMMENCE ON THE EFFECTIVE DATE AND
END ON MARCH 31, 2009.

 

1.7          “CALENDAR YEAR” SHALL MEAN EACH TWELVE (12) MONTH PERIOD BEGINNING
ON JANUARY 1 AND ENDING ON DECEMBER 31, PROVIDED THAT THE FIRST CALENDAR YEAR
DURING THE TERM SHALL COMMENCE ON THE EFFECTIVE DATE AND END ON DECEMBER 31,
2009.

 

1.8          “CHANGE OF CONTROL” SHALL MEAN (A) THE ACQUISITION OF CONTROL OF
UNITED THERAPEUTICS BY A THIRD PARTY OR (B) THE SALE OR OTHER DISPOSITION OF ALL
OR SUBSTANTIALLY ALL OF THE ASSETS OF UNITED THERAPEUTICS TO A THIRD PARTY. 
SOLELY FOR PURPOSES OF THE FOREGOING SENTENCE, “CONTROL” SHALL MEAN THE POWER
WHETHER OR NOT EXERCISED, TO DIRECT THE MANAGEMENT AND AFFAIRS OF UNITED
THERAPEUTICS, DIRECTLY OR INDIRECTLY, WHETHER THROUGH THE OWNERSHIP OF VOTING
SECURITIES, BY CONTRACT, OR OTHERWISE.  THE DIRECT OR INDIRECT OWNERSHIP OF
FIFTY PERCENT (50%) OR MORE OF UNITED THERAPEUTICS’ OUTSTANDING VOTING
SECURITIES SHALL IN ANY CASE BE DEEMED TO CONFER “CONTROL.”

 

1.9          “COMMERCIALIZE” (AND, WITH CORRELATIVE MEANINGS, THE TERMS
“COMMERCIALIZING” AND “COMMERCIALIZATION”) SHALL MEAN ANY AND ALL ACTIVITIES
RELATING TO THE COMMERCIALIZATION OF THE PRODUCT, INCLUDING THE PROMOTION,
DETAILING, DISTRIBUTION, SALE, OFFER FOR SALE, AND IMPORTATION OF THE PRODUCT
AFTER REGULATORY APPROVAL OF THE PRODUCT, EXCLUDING ANY AND ALL MANUFACTURING OF
THE PRODUCT.

 

2

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

 

1.10        “COMMERCIALIZATION PLAN” SHALL HAVE THE MEANING SET FORTH IN
SECTION 6.2.

 

1.11        “COMMERCIALLY REASONABLE EFFORTS” SHALL MEAN WITH RESPECT TO EACH
PARTY, COMMERCIALLY REASONABLE EFFORTS IN ACCORDANCE WITH THE BUSINESS, LEGAL,
MEDICAL AND SCIENTIFIC JUDGMENT OF A SIMILARLY SITUATED COMPANY, AND IN
ACCORDANCE WITH THE EFFORTS AND RESOURCES A SIMILARLY SITUATED COMPANY WOULD USE
FOR A PRODUCT OWNED BY IT OR TO WHICH IT HAS RIGHTS, WHICH IS OF SIMILAR MARKET
POTENTIAL, AT A SIMILAR STAGE IN ITS PRODUCT LIFE, TAKING INTO ACCOUNT THE
COMPETITIVENESS OF THE MARKETPLACE, THE PROPRIETARY POSITION OF THE PRODUCT, THE
REGULATORY STRUCTURE INVOLVED, THE PROFITABILITY OF THE PRODUCT AND OTHER
RELEVANT FACTORS.

 

1.12        “COMPETITIVE PRODUCT” SHALL MEAN ANY PHOSPHODIESTERASE 5 INHIBITOR.

 

1.13        “COMPOUND” SHALL MEAN THE BULK ACTIVE PHARMACEUTICAL INGREDIENT
TADALAFIL AS SET FORTH ON EXHIBIT 1.13.

 

1.14        “CONFIDENTIAL INFORMATION” OF A PARTY SHALL MEAN ALL INFORMATION
DISCLOSED BY SUCH PARTY TO THE OTHER PARTY DURING THE TERM, INCLUDING ANY AND
ALL INFORMATION EXCHANGED BETWEEN THE PARTIES UNDER THE MANUFACTURING AND SUPPLY
AGREEMENT OR THE CONFIDENTIALITY AGREEMENT.

 

1.15        “CONFIDENTIALITY AGREEMENT” SHALL MEAN THE CONFIDENTIALITY AGREEMENT
BETWEEN THE PARTIES EFFECTIVE FEBRUARY 25, 2008.

 

1.16        “CONTROL” SHALL MEAN, WITH RESPECT TO ANY INFORMATION OR
INTELLECTUAL PROPERTY RIGHT, POSSESSION BY A PARTY OF THE ABILITY (WHETHER BY
OWNERSHIP, LICENSE, OR OTHERWISE) TO GRANT ACCESS, A LICENSE, OR A SUBLICENSE TO
SUCH INFORMATION OR INTELLECTUAL PROPERTY RIGHT WITHOUT VIOLATING THE TERMS OF
ANY AGREEMENT OR OTHER ARRANGEMENT WITH ANY THIRD PARTY AS OF THE TIME SUCH
PARTY WOULD FIRST BE REQUIRED HEREUNDER TO GRANT THE OTHER PARTY SUCH ACCESS,
LICENSE OR SUBLICENSE.

 

1.17        “CORPORATE MARKS” SHALL MEAN, WITH RESPECT TO EACH OF THE PARTIES,
THE CORPORATE NAME OF SUCH PARTY OR THOSE OF AFFILIATES OF SUCH PARTY, AND ITS
AND THEIR TRADE NAMES, TRADEMARKS, SERVICE MARKS, DOMAIN NAMES, AND ASSOCIATED
LOGOS AND DESIGNS; PROVIDED THAT CORPORATE MARKS SHALL NOT INCLUDE THE LILLY
PRODUCT MARKS.

 

1.18        “DETAIL” OR “DETAILING” SHALL MEAN, WITH RESPECT TO PROMOTION OF THE
PRODUCT IN THE FIELD IN THE TERRITORY UNDER THE COMMERCIALIZATION PLAN, THE
ACTIVITY UNDERTAKEN BY A UNITED THERAPEUTICS SALES REPRESENTATIVE WITH RESPECT
TO A TARGET PHYSICIAN OR OTHER INDIVIDUALS OR ENTITIES WITH PRESCRIBING
AUTHORITY INVOLVED OR POTENTIALLY INVOLVED IN PRESCRIBING THE PRODUCT, TO
PROVIDE INFORMATION ABOUT THE BENEFITS AND FEATURES OF THE PRODUCT IN AN EFFORT
TO INCREASE THE NUMBER OF PHYSICIANS OR OTHER INDIVIDUALS OR ENTITIES WITH
PRESCRIBING AUTHORITY PRESCRIBING THE PRODUCT, AND/OR THE NUMBER OF
PRESCRIPTIONS FOR THE PRODUCT.

 

1.19        “DEVELOPMENT” (AND, WITH CORRELATIVE MEANINGS, THE TERMS “DEVELOP”
AND “DEVELOPING”) SHALL MEAN THE CLINICAL DEVELOPMENT, AND REGULATORY ACTIVITIES
WITH RESPECT TO SEEKING REGULATORY APPROVAL OF THE PRODUCT FOR ANY INDICATION IN
THE FIELD IN THE TERRITORY, AND POST-APPROVAL STUDIES, INCLUDING LABEL
EXTENSIONS IN SUPPORT OF THE PRODUCT IN THE FIELD IN THE

 

3

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

 

TERRITORY AND ANY STUDIES REQUIRED BY A REGULATORY AUTHORITY, AND EXCLUDING ANY
AND ALL MANUFACTURING OF THE PRODUCT.

 

1.20                        “DOLLAR” OR “$” SHALL MEAN THE LEGAL TENDER OF THE
UNITED STATES OF AMERICA.

 

1.21                        “DOMAIN” SHALL MEAN, WITH RESPECT TO UNITED
THERAPEUTICS, THE PRODUCT IN THE FIELD IN THE TERRITORY, AND, WITH RESPECT TO
LILLY, PRODUCTS CONTAINING THE COMPOUND OUTSIDE THE FIELD IN THE TERRITORY, AND
IN ALL FIELDS OUTSIDE THE TERRITORY.

 

1.22                        “EFFECTIVE DATE” SHALL MEAN THE CLOSING DATE AS
DEFINED IN THE STOCK PURCHASE AGREEMENT.

 

1.23                        “EXISTING PATENTS” SHALL HAVE THE MEANING SET FORTH
IN SECTION 8.2(C).

 

1.24                        “FDA” SHALL MEAN THE UNITED STATES FOOD AND DRUG
ADMINISTRATION, OR ANY SUCCESSOR ORGANIZATION.

 

1.25                        “FIELD” SHALL MEAN THE TREATMENT, AMELIORATION, AND
PREVENTION OF ANY AND ALL FORMS OF PULMONARY HYPERTENSION IN HUMANS, INCLUDING
(A) ALL WHO CLASSIFICATIONS OF PULMONARY HYPERTENSION IN THE VENICE 2003 REVISED
CLASSIFICATION SYSTEM AND (B) ALL FORMS OF PULMONARY HYPERTENSION SECONDARY TO
OTHER INDICATIONS.

 

1.26                        “GAAP” SHALL MEAN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED STATES, CONSISTENTLY APPLIED.

 

1.27                        “GLAXO ICOS LICENSE” SHALL MEAN THAT COLLABORATION
AGREEMENT DATED OCTOBER 3, 1991 AND AMENDED JANUARY 24, 1997 BY AND AMONG: GLAXO
GROUP LIMITED, SMITHKLINE BEECHAM CORPORATION, DOING BUSINESS AS
GLAXOSMITHKLINE, SUCCESSOR IN INTEREST TO GLAXO WELLCOME INC. AND ICOS.

 

1.28                        “GMP” SHALL MEAN THE CURRENT GOOD MANUFACTURING
PRACTICES OF THE FDA, AS THEN IN EFFECT.

 

1.29                        “ICOS” SHALL MEAN ICOS CORPORATION.

 

1.30                        “ICOS LILLY AGREEMENTS” SHALL MEAN THE RESEARCH AND
DEVELOPMENT SERVICE AGREEMENT DATED SEPTEMBER 30, 1998 BETWEEN LILLY, AND LILLY
ICOS LLC, AND THE MARKETING AND SALES SERVICE AGREEMENT DATED AS OF
SEPTEMBER 30, 1998 AS AMENDED AND RESTATED AS JANUARY 1, 2003 BETWEEN LILLY AND
ICOS (ASSIGNED TO ICOS TECHNOLOGY SERVICES LLC).

 

1.31                        “INDEMNITEE” SHALL MEAN, WITH RESPECT TO A PARTY,
SUCH PARTY AND ITS AFFILIATES, AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, CONTRACTORS AND LICENSEES.

 

1.32                        “INFORMATION” SHALL MEAN (A) TECHNICAL OR ECONOMIC
INFORMATION, TECHNIQUES AND DATA RELATING TO THE RESEARCH, NON-CLINICAL
DEVELOPMENT, DEVELOPMENT, MANUFACTURE, USE OR COMMERCIALIZATION OF THE PRODUCT,
INCLUDING INVENTIONS, PRACTICES, METHODS, KNOWLEDGE, KNOW-HOW, SKILLS,
EXPERIENCE, TEST DATA, INCLUDING PHARMACOLOGICAL, TOXICOLOGICAL, PRECLINICAL AND
CLINICAL TEST DATA, RESULTS, PROTOCOLS INCLUDING DATA RELATING TO PRODUCT
SAFETY, TEST DATA,

 

4

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

 

FORMULATIONS, SPECIFICATIONS, ANALYTICAL AND QUALITY CONTROL DATA, REGULATORY
STRATEGIES, REGULATORY SUBMISSIONS, CORRESPONDENCE AND COMMUNICATIONS,
MARKETING, PRICING, DISTRIBUTION, COST, SALES, MANUFACTURING, PATENT AND LEGAL
DATA OR DESCRIPTIONS, AND STRATEGIES FOR THE RESEARCH, NON-CLINICAL DEVELOPMENT,
DEVELOPMENT, MANUFACTURE, USE OR COMMERCIALIZATION OF THE PRODUCT AND
(B) COMPOSITIONS OF MATTER, DEVICES, ARTICLES OF MANUFACTURE, ASSAYS AND
BIOLOGICAL, CHEMICAL OR PHYSICAL MATERIALS RELATING TO RESEARCH, NON-CLINICAL
DEVELOPMENT, DEVELOPMENT, MANUFACTURE, USE OR COMMERCIALIZATION OF THE PRODUCT.

 

1.33                        “INVENTION” SHALL MEAN ANY INVENTION OR DISCOVERY,
WHETHER OR NOT PATENTABLE, MADE AS A RESULT OF THE ACTIVITIES OF A PARTY OR THE
PARTIES PURSUANT TO THIS AGREEMENT PERFORMED AFTER THE EFFECTIVE DATE THAT IS
NECESSARY OR USEFUL IN THE RESEARCH, NON-CLINICAL DEVELOPMENT, DEVELOPMENT,
MANUFACTURE, USE, OR COMMERCIALIZATION OF THE PRODUCT.

 

1.34                        “JSC” OR “JOINT STEERING COMMITTEE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.1.

 

1.35                        “LILLY COMMERCIALIZATION ACTIVITIES” SHALL HAVE THE
MEANING SET FORTH IN SECTION 6.3(C).

 

1.36                        “LILLY KNOW-HOW” SHALL MEAN ALL INFORMATION THAT
(A) IS CONTROLLED BY LILLY AT ANY TIME DURING THE TERM AND (B) IS NECESSARY OR
USEFUL IN THE RESEARCH, NON-CLINICAL DEVELOPMENT, DEVELOPMENT, USE OR
COMMERCIALIZATION OF THE PRODUCT.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, LILLY KNOW-HOW SHALL EXCLUDE LILLY PATENTS, LILLY’S CORPORATE MARKS
AND LILLY PRODUCT MARKS.

 

1.37                        “LILLY PATENTS” SHALL MEAN ALL PATENTS THAT COVER
THE COMPOSITION OR METHOD OF USING THE PRODUCT IN THE FIELD IN THE TERRITORY
THAT ARE CONTROLLED BY LILLY AT ANY TIME DURING THE TERM.  AS OF THE EXECUTION
DATE, THE LILLY PATENTS ARE AS SET FORTH ON EXHIBIT 1.37.

 

1.38                        “LILLY PRODUCT MARKS” SHALL MEAN THE CERTAIN,
SEPARATE LILLY BRAND NAME TO BE USED IN CONNECTION WITH MARKETING AND SALE OF
THE PRODUCT IN THE FIELD, DISTINCT FROM THE BRAND NAME CIALIS®, ANTICIPATED AS
OF THE EXECUTION DATE TO BE [***]TM, AND ALL OTHER TRADEMARKS USED OR INTENDED
FOR USE BY LILLY OR ITS AFFILIATES DURING THE TERM IN CONNECTION WITH THE
MARKETING OR SALE OF THE PRODUCT IN THE FIELD IN THE TERRITORY, OR INTENDED FOR
USE BY UNITED THERAPEUTICS OR ITS AFFILIATES DURING THE TERM IN CONNECTION WITH
THE MARKETING OR SALE OF THE PRODUCT IN THE FIELD IN THE TERRITORY, AND APPROVED
BY LILLY (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD), OTHER THAN
CORPORATE MARKS OF LILLY AND THE CORPORATE MARKS OF UNITED THERAPEUTICS.

 

1.39                        “MANUFACTURING AND SUPPLY AGREEMENT” SHALL MEAN THAT
CERTAIN MANUFACTURING AND SUPPLY AGREEMENT ENTERED INTO BY LILLY, AN AFFILIATE
OF LILLY AND UNITED THERAPEUTICS OF EVEN DATE HEREWITH, PURSUANT TO WHICH LILLY
HAS AGREED TO SUPPLY TO UNITED THERAPEUTICS, AND UNITED THERAPEUTICS HAS AGREED
TO PURCHASE FROM LILLY, ALL OF UNITED THERAPEUTICS’ REQUIREMENTS FOR THE
PRODUCT, SUBJECT TO, AND IN ACCORDANCE WITH, THE TERMS AND CONDITIONS SET FORTH
IN THIS AGREEMENT AND SUCH MANUFACTURING AND SUPPLY AGREEMENT.

 

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1.40                        “NET SALES” SHALL MEAN THE AMOUNT BILLED FOR SALES
OF THE PRODUCT BY UNITED THERAPEUTICS, ANY AFFILIATE OF UNITED THERAPEUTICS, AND
ANY SUBLICENSEE OF UNITED THERAPEUTICS OR AN AFFILIATE OF UNITED THERAPEUTICS TO
THIRD PARTIES, LESS:

 

(a)                  discounts, including cash discounts, or rebates,
retroactive price reductions or allowances actually allowed or granted from the
billed amount;

 

(b)                  credits or allowances actually granted upon claims,
rejections or returns, including recalls, regardless of the party requesting
such;

 

(c)                  freight postage, shipping and insurance charges paid for
delivery of Product to the customer; and

 

(d)                  taxes or other governmental charges levied on or measured
by the billing amount whether absorbed by the billing or billed party.

 

Such amounts shall be determined from the books and records of United
Therapeutics, Affiliates of United Therapeutics, and sublicensees of United
Therapeutics or Affiliates of United Therapeutics, maintained in accordance with
GAAP.  United Therapeutics agrees that the determination of such amounts will be
made using United Therapeutics’ then-current standard procedures and
methodologies for external reporting of financial results in reports filed with
the Securities and Exchange Commission.

 

1.41                        “NEW PATENTS” SHALL HAVE THE MEANING SET FORTH IN
SECTION 8.2(A).

 

1.42                        “ONGOING LILLY TRIALS” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.1.

 

1.43                        “PATENTS” SHALL MEAN (A) UNEXPIRED LETTERS PATENT
(INCLUDING INVENTOR’S CERTIFICATES) IN THE TERRITORY THAT HAVE NOT BEEN HELD
INVALID OR UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION FROM WHICH NO
APPEAL CAN BE TAKEN OR HAS BEEN TAKEN WITHIN THE REQUIRED TIME PERIOD, INCLUDING
ANY SUBSTITUTION, EXTENSION, TERM RESTORATION, REGISTRATION, CONFIRMATION,
REISSUE, RE-EXAMINATION, RENEWAL OR ANY LIKE FILING THEREOF AND (B) PENDING
APPLICATIONS FOR LETTERS PATENT IN THE TERRITORY, INCLUDING ANY CONTINUATION,
DIVISION OR CONTINUATION-IN-PART THEREOF AND ANY PROVISIONAL APPLICATIONS, IN
EACH CASE, SO LONG AS SUCH APPLICATION IS BEING DILIGENTLY PROSECUTED.

 

1.44                        “PRODUCT” SHALL MEAN THAT PRESCRIPTION
PHARMACEUTICAL PRODUCT, THE ACTIVE INGREDIENT OF WHICH IS THE COMPOUND, IN
FINISHED FORM AND FORMULATION, AS FURTHER DESCRIBED ON EXHIBIT 1.44, WHICH MAY
BE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE MANUFACTURING AND SUPPLY
AGREEMENT.

 

1.45                        “PROMOTION” OR “PROMOTE” SHALL MEAN THE MARKETING
AND ADVERTISING OF THE PRODUCT IN THE FIELD IN THE TERRITORY IN ACCORDANCE WITH
THE COMMERCIALIZATION PLAN, INCLUDING MEDICAL EDUCATION, INFORMATION AND
COMMUNICATION, MARKET DEVELOPMENT AND MEDICAL LIAISON ACTIVITIES.

 

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1.46                        “PULMONARY ARTERIAL HYPERTENSION” OR “PAH” SHALL
MEAN ALL WHO CLASSIFICATIONS OF PULMONARY ARTERIAL HYPERTENSION IDENTIFIED IN
THE VENICE 2003 REVISED CLASSIFICATION SYSTEM.

 

1.47                        “QUALITY AGREEMENT” HAS THE MEANING SET FORTH IN
SECTION 4.7.

 

1.48                        “REASONABLE COST” SHALL MEAN, WITH RESPECT TO A
PARTY, THE REASONABLE COSTS AND EXPENSES (INCLUDING FULL TIME EQUIVALENT COSTS
AND THIRD PARTY COSTS) AS THEN CALCULATED, FROM TIME TO TIME, BY SUCH PARTY FOR
ITS INTERNAL ACCOUNTING PURPOSES, SUCH CALCULATION PERFORMED CONSISTENTLY WITH
THE PRACTICE ACROSS SUCH PARTY’S ORGANIZATION.  IN ANY CIRCUMSTANCE WHERE
REASONABLE COSTS ARE EXPECTED TO EXCEED ONE HUNDRED THOUSAND DOLLARS, THE
PARTIES WILL DEVELOP A BUDGET FOR SUCH CIRCUMSTANCE AND AGREE UPON A FULL TIME
EQUIVALENT RATE THAT IS APPROPRIATE FOR SUCH CIRCUMSTANCE.

 

1.49                        “REGULATORY APPROVAL” SHALL MEAN ANY APPROVALS,
LICENSES, REGISTRATIONS OR AUTHORIZATIONS OF ANY REGULATORY AUTHORITY, WHETHER
OR NOT CONDITIONAL, THAT ARE NECESSARY FOR THE COMMERCIAL SALE OF THE PRODUCT IN
THE FIELD IN THE TERRITORY AND OBTAINED AS A RESULT OF ACTIVITIES UNDER THIS
AGREEMENT.

 

1.50                        “REGULATORY AUTHORITY” SHALL MEAN ANY AND ALL
SUPRANATIONAL, NATIONAL, OR REGIONAL, STATE, PROVINCIAL OR OTHER LOCAL
GOVERNMENT, COURT, GOVERNMENTAL AGENCY, AUTHORITY, BOARD, BUREAU,
INSTRUMENTALITY, REGULATORY AGENCY, DEPARTMENT, BUREAU, COMMISSION, COUNCIL OR
OTHER GOVERNMENT ENTITY, WHOSE APPROVAL OR AUTHORIZATION IS NECESSARY FOR, OR TO
WHOM NOTICE MUST BE GIVEN PRIOR TO, THE DEVELOPMENT, MANUFACTURE, USE OR
COMMERCIALIZATION OF THE PRODUCT IN THE TERRITORY OR THE DESIGNATION OF THE
PRODUCT AS AN ORPHAN DRUG (OR EQUIVALENT DESIGNATION) IN THE TERRITORY,
INCLUDING, WITH RESPECT TO THE UNITED STATES, THE FDA.

 

1.51                        “REGULATORY FILINGS” SHALL MEAN ALL APPLICATIONS,
FILINGS, DOSSIERS AND THE LIKE (EXCLUDING ROUTINE ADVERSE EVENT EXPEDITED OR
PERIODIC REPORTING), SUBMITTED TO A REGULATORY AUTHORITY IN THE TERRITORY FOR
THE PURPOSE OF OBTAINING REGULATORY APPROVAL FROM THAT REGULATORY AUTHORITY IN
THE TERRITORY, BUT DO NOT INCLUDE SUBMISSION OF PROMOTIONAL MATERIALS TO
DIVISION OF DRUG MARKETING, ADVERTISING, AND COMMUNICATIONS OF THE FDA (DDMAC).

 

1.52                        “SAFETY AGREEMENT” SHALL HAVE THE MEANING SET FORTH
IN SECTION 5.5(A).  AN EXAMPLE OF THE TABLE OF CONTENTS OF A SAFETY AGREEMENT IS
ATTACHED HERETO AS EXHIBIT 1.52.

 

1.53                        “SECONDARY INDICATION” SHALL MEAN ANY INDICATION IN
THE FIELD OTHER THAN PAH.

 

1.54                        “TERM” SHALL HAVE THE MEANING SET FORTH IN
SECTION 13.1.

 

1.55                        “TERRITORY” SHALL MEAN THE UNITED STATES OF AMERICA
AND PUERTO RICO, AND UNITED STATES OF AMERICA-BASED DEPARTMENT OF DEFENSE AND/OR
DEPARTMENT OF VETERANS AFFAIRS DEPOTS TO THE EXTENT THAT SUCH AGENCIES PURCHASE
PRODUCT IN THE UNITED STATES.

 

1.56                        “THIRD PARTY” SHALL MEAN ANY ENTITY OTHER THAN A
PARTY OR ITS AFFILIATES.

 

1.57                        “UNITED THERAPEUTICS COMMERCIALIZATION ACTIVITIES”
SHALL HAVE THE MEANING SET FORTH IN SECTION 6.3(A).

 

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1.58                        “UNITED THERAPEUTICS KNOW-HOW” SHALL MEAN
INFORMATION, INCLUDING ANY AND ALL PROTOCOLS FOR CONDUCTING PRECLINICAL AND
CLINICAL STUDIES AND DATA AND RESULTS OBTAINED FROM SUCH PRECLINICAL AND
CLINICAL STUDIES, INCLUDING DATA RELATING TO PRODUCT SAFETY, THAT (A) IS WITHIN
THE CONTROL OF UNITED THERAPEUTICS AT ANY TIME DURING THE TERM, AND (B) IS
NECESSARY OR USEFUL IN THE RESEARCH, NON-CLINICAL DEVELOPMENT, DEVELOPMENT,
MANUFACTURE, USE, OR COMMERCIALIZATION OF THE PRODUCT.

 

1.59                        “UNITED THERAPEUTICS PROMOTIONAL MATERIALS” SHALL
HAVE THE MEANING SET FORTH IN SECTION 6.5(A).

 

1.60                        “UNITED THERAPEUTICS SALES REPRESENTATIVE” SHALL
MEAN AN EMPLOYEE OF UNITED THERAPEUTICS OR ITS PERMITTED CONTRACTORS AND A
MEMBER OF UNITED THERAPEUTICS’ SALES FORCE ENGAGED IN THE CONDUCT OF DETAILS OF
THE PRODUCT AND TRAINED AS PROVIDED UNDER THIS AGREEMENT AND THE
COMMERCIALIZATION PLAN.

 

1.61                        “USEFUL” SHALL MEAN, WITH RESPECT TO UNITED
THERAPEUTICS, REASONABLY LIKELY TO BE NECESSARY OR MATERIALLY USEFUL IN THE
DEVELOPMENT OR COMMERCIALIZATION OF THE PRODUCT IN UNITED THERAPEUTICS’ DOMAIN,
AND, WITH RESPECT TO LILLY, REASONABLY LIKELY TO BE NECESSARY OR MATERIALLY
USEFUL IN THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF PRODUCTS
CONTAINING THE COMPOUND IN LILLY’S DOMAIN.

 

1.62                        “VALID CLAIM” SHALL MEAN A CLAIM WITHIN A LILLY
PATENT THAT HAS NOT EXPIRED, LAPSED, OR BEEN CANCELLED OR ABANDONED, AND THAT
HAS NOT BEEN DEDICATED TO THE PUBLIC, DISCLAIMED, OR HELD UNENFORCEABLE,
INVALID, OR BEEN CANCELLED BY A COURT OR ADMINISTRATIVE AGENCY OF COMPETENT
JURISDICTION IN AN ORDER OR DECISION FROM WHICH NO APPEAL HAS BEEN OR CAN BE
TAKEN, INCLUDING THROUGH OPPOSITION, RE-EXAMINATION, REISSUE, OR DISCLAIMER.

 

ARTICLE 2

GRANT OF RIGHTS

 

2.1                               LICENSE GRANT TO UNITED THERAPEUTICS.  SUBJECT
TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, LILLY HEREBY GRANTS TO UNITED
THERAPEUTICS AN EXCLUSIVE (EVEN AS TO LILLY), NON-TRANSFERABLE (SUBJECT TO
SECTIONS 2.3 AND 15.2), SUBLICENSEABLE (SUBJECT TO SECTION 2.3) LICENSE, UNDER
THE LILLY KNOW-HOW AND THE LILLY PATENTS, TO DEVELOP AND COMMERCIALIZE THE
PRODUCT IN THE FIELD IN THE TERRITORY DURING THE TERM.  NOTWITHSTANDING THE
FOREGOING, LILLY MAY CONDUCT RESEARCH AND OTHER DEVELOPMENT ACTIVITIES WITH THE
COMPOUND INCLUDING, IN CONNECTION WITH LILLY’S DEVELOPMENT, MANUFACTURE AND
COMMERCIALIZATION OF THE PRODUCT IN LILLY’S DOMAIN; PROVIDED THAT LILLY SHALL
NOT HAVE THE RIGHT TO CONDUCT ANY CLINICAL STUDY OF THE PRODUCT IN THE FIELD IN
THE TERRITORY, OTHER THAN THE ONGOING LILLY TRIALS, WITHOUT THE PRIOR WRITTEN
CONSENT OF UNITED THERAPEUTICS.

 

2.2                               LICENSE GRANT TO LILLY.  SUBJECT TO THE TERMS
AND CONDITIONS OF THIS AGREEMENT, UNITED THERAPEUTICS HEREBY GRANTS TO LILLY,
UNDER ANY AND ALL UNITED THERAPEUTICS KNOW-HOW, A ROYALTY-FREE, NON-EXCLUSIVE,
SUBLICENSEABLE LICENSE TO:

 

(a)                                  make and have made the Compound and the
Product for use in the Field in the Territory;

 

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(b)                                  in connection with Lilly’s research,
non-clinical development, Development, manufacture, and Commercialization of the
Product in the Field outside the Territory, conduct Development with respect to
the Compound and the Product in the Field in the Territory;

 

(c)                                  Develop, make and have made, use and
Commercialize the Compound and the Product outside the Field in the Territory;
and

 

(d)                                  Develop, make and have made, use and
Commercialize the Compound and the Product in any and all fields outside the
Territory;

 

provided that (i) Lilly shall not have the right to conduct any clinical study
of the Product in the Field in the Territory, other than the Ongoing Lilly
Trials, without the prior written consent of United Therapeutics, and
(ii) United Therapeutics shall not have the right to conduct any clinical study
of the Product outside the Field in the Territory or in any field outside the
Territory, without the prior written consent of Lilly.  Any sublicense of the
rights granted by Lilly to United Therapeutics shall be consistent with and
subject to the terms and conditions of this Agreement.  Lilly shall be
responsible for the performance by its sublicensees of all the terms of this
Agreement imposed on Lilly as if such sublicensee were Lilly hereunder as such
terms pertain to the rights sublicensed to such sublicensee.

 

2.3                               SUBLICENSING.

 

(a)                                  The license granted to United Therapeutics
in Section 2.1 is not sublicenseable without the prior written consent of Lilly,
except to (i) United Therapeutics’ Affiliates or (ii) Third Party independent
contractors on a fee-for-service basis solely for the purpose of performing
activities on behalf of United Therapeutics in connection with this Agreement. 
Any such permitted sublicense (A) if granted to a United Therapeutics’
Affiliate, shall terminate, with respect to such Affiliate, upon such Affiliate
ceasing to be an Affiliate of United Therapeutics; and (B) shall be consistent
with and subject to the terms and conditions of this Agreement.  A final
executed copy of any sublicense agreement shall be provided to Lilly within
fourteen (14) days after its execution; provided that the financial terms of any
such sublicense agreement may be redacted to the extent not pertinent to an
understanding of United Therapeutics’ obligations or benefits under this
Agreement.

 

(b)                                  United Therapeutics shall be responsible
for the performance by its sublicensees of all the terms of this Agreement
imposed on United Therapeutics as if such sublicensee were United Therapeutics
hereunder as such terms pertain to the rights sublicensed to such sublicense.

 

2.4                               RIGHT OF FIRST NEGOTIATION.

 

(a)                                  In the event that Lilly, at any time during
the Term, desires to grant rights to a Third Party under any Lilly Know-How or
any Lilly Patents to Develop or Commercialize the Product in the Field in any
country outside the Territory (other than Japan) (any such potential grant
referred to as a “Business Opportunity” for the purposes of this Section 2.4),
Lilly agrees to notify United Therapeutics of such Business Opportunity, and
provide United Therapeutics with information available to Lilly that is
reasonably necessary for United

 

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Therapeutics to evaluate the Business Opportunity.  Lilly shall discuss
exclusively with United Therapeutics the Business Opportunity for a period of
one hundred twenty (120) days following the date of such notice (such period
referred to as a “Negotiation Period” for the purposes of this Section 2.4). 
Unless otherwise agreed between the Parties, Lilly will not negotiate or discuss
the Business Opportunity with any Third Party, or disclose to any Third Party
any of the information regarding the Business Opportunity, until the expiry of
the Negotiation Period.  In the event that Lilly and United Therapeutics have
not agreed upon the terms and conditions pursuant to which Lilly would grant
such rights to United Therapeutics within the Negotiation Period, Lilly shall be
free to discuss the Business Opportunity with and disclose information regarding
same to any Third Party, subject to Section 2.4(b).

 

(b)                                  After expiration of the Negotiation Period,
Lilly will not grant such rights to any Third Party under terms that, when
considered as a whole, are less favorable to Lilly than the terms last offered
by Lilly to United Therapeutics during the discussions between the Parties
during the Negotiation Period.

 

2.5                               REPRESENTATION AND WARRANTY, AND NEGATIVE
COVENANT.

 

(a)                                  United Therapeutics represents and warrants
that, as of the Effective Date, no Patent Controlled by United Therapeutics or
an Affiliate of United Therapeutics covers, or would be infringed by, the
activities contemplated under the terms of this Agreement, including (i) the
Development and Commercialization of the Product by United Therapeutics in
United Therapeutics’ Domain or (ii) the Development, manufacture, and
Commercialization of the Product in Lilly’s Domain.

 

(b)                                  United Therapeutics covenants that neither
it nor its Affiliates or sublicensees shall use or practice the Lilly Know-How
and the Lilly Patents for any use or purpose except as expressly permitted in
this Agreement.  United Therapeutics agrees to impose the covenant contained in
this Section 2.5(b) on all of its Affiliates and sublicensees.

 

(c)                                  Lilly shall not, during the Term or
thereafter assert nor cause to be asserted against United Therapeutics or its
Affiliates or sublicensees any intellectual property right not licensed to
United Therapeutics under this ARTICLE 2 that is or might be infringed by reason
of United Therapeutics’ or its Affiliates’ or sublicensees’ Development and
Commercialization of the Product in accordance with this Agreement.  Lilly
agrees to impose the covenant contained in this Section 2.5(c) on all of its
Affiliates.

 

2.6                               POTENTIAL PREFERRED PARTNERS.  EACH PARTY SEES
POTENTIAL VALUE IN THE OTHER PARTY AS A POSSIBLE ROUTE TO MARKET FOR FUTURE
PRODUCTS IN THE OTHER PARTY’S AREA OF EXPERIENCE AND EXPERTISE. IN FURTHERANCE
THEREOF, FROM TIME TO TIME, LILLY MAY DISCLOSE TO UNITED THERAPEUTICS CERTAIN
OPPORTUNITIES AVAILABLE TO LILLY FOR PRODUCTS FOR ORPHAN INDICATIONS, AND UNITED
THERAPEUTICS MAY DISCLOSE TO LILLY CERTAIN OPPORTUNITIES AVAILABLE TO UNITED
THERAPEUTICS FOR PRODUCTS IN LILLY’S AREA OF EXPERTISE, AND IN EITHER CASE, IF
SO DISCLOSED, THE PARTIES MAY CHOOSE TO DISCUSS THE DEVELOPMENT AND
COMMERCIALIZATION OF SUCH OPPORTUNITIES WITH EACH OTHER.  IN ORDER TO IMPLEMENT
THE OBJECTIVES UNDER THIS SECTION 2.6, THE PARTIES ANTICIPATE THAT, ON EACH
ANNIVERSARY OF THE EXECUTION DATE, THE CEO OF UNITED THERAPEUTICS AND THE SENIOR
VICE PRESIDENT OF CORPORATE STRATEGY AND POLICY OF LILLY, OR THEIR DESIGNEES,
SHALL MEET AT A MUTUALLY

 

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AGREEABLE LOCATION IN NEW YORK CITY TO REVIEW ONE OR TWO POTENTIAL STRATEGIC
DEVELOPMENT AND COMMERCIALIZATION OPPORTUNITIES FROM EACH PARTY. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THIS SECTION 2.6 CREATES AND IMPOSES
NO BINDING OBLIGATION ON EITHER PARTY WITH RESPECT TO THE DEVELOPMENT OR
COMMERCIALIZATION OF ANY FUTURE PRODUCT OPPORTUNITIES.

 

2.7                               NO OTHER RIGHTS.

 

(a)                                  No right or license under any United
Therapeutics Know-How, or under any Lilly Know-How or any Lilly Patents, is
granted or shall be granted by implication.  For clarity, except as expressly
set forth in this Agreement, (i) no right or license is granted to United
Therapeutics, under any Lilly Know-How or any Lilly Patents, to conduct research
and/or non-clinical development with respect to the Compound and/or the Product,
or to manufacture the Compound and/or the Product, (ii) Lilly retains all rights
under all Lilly Know-How and all Lilly Patents in Lilly’s Domain, and
(iii) Lilly shall have sole control of manufacture of the Compound and the
Product for use in United Therapeutics’ Domain (subject to the express terms of
the Manufacturing and Supply Agreement and this Agreement), and any and all
research, non-clinical development, Development, manufacture, use,
Commercialization of the Compound and/or the Product in Lilly’s Domain.

 

(b)                                  Except as otherwise provided herein, no
right, express or implied, is granted under this Agreement to either Party to
use in any manner the Corporate Marks of the other Party in connection with the
performance of this Agreement.

 

ARTICLE 3

GOVERNANCE

 

3.1                               GENERAL.  THE PARTIES DESIRE TO ESTABLISH A
JOINT STEERING COMMITTEE (THE “JOINT STEERING COMMITTEE” OR “JSC”), WHICH SHALL
OVERSEE THE PARTIES’ ACTIVITIES UNDER THIS AGREEMENT AND FACILITATE
COMMUNICATIONS BETWEEN THE PARTIES WITH RESPECT TO THE MANUFACTURE AND SUPPLY OF
THE PRODUCT FOR USE, AND THE DEVELOPMENT AND COMMERCIALIZATION OF THE PRODUCT,
IN THE FIELD IN THE TERRITORY UNDER THIS AGREEMENT.

 

3.2                               JOINT STEERING COMMITTEE.

 

(a)                                  Formation and Purpose.  Within forty-five
(45) days after the Effective Date, each Party shall appoint three (3) members
of its management to be its JSC representatives.  Each Party may replace its JSC
representatives by written notice to the other Party.  The purpose of the JSC
shall be to provide a forum for joint discussion between the Parties in order to
(i) coordinate the manufacture and supply of the Product for use, and the
Development and Commercialization of the Product, in the Field in the Territory,
(ii) keep United Therapeutics generally advised of Lilly’s activities that would
affect such Development and Commercialization of the Product in the Field in the
Territory, and (iii) identify activities that would be of mutual benefit with
respect to the Product.  The JSC shall have the membership and shall operate by
the procedures set forth in Section 3.4.

 

(b)                                  Specific Responsibilities of the JSC.  In
addition to its overall responsibility for coordinating the Parties’ activities
under this Agreement, the JSC shall, in particular and in a timely manner:

 

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(I)                                    MONITOR PROGRESS OF THE DEVELOPMENT OF
THE PRODUCT IN THE FIELD IN THE TERRITORY, INCLUDING THE ONGOING LILLY TRIALS;

 

(II)                                REVIEW AND, AS FURTHER DESCRIBED IN
SECTION 6.2, COMMENT UPON THE COMMERCIALIZATION PLAN, AND ALL UPDATES OR
AMENDMENTS THERETO;

 

(III)                            REVIEW AND COMMENT UPON PLANS FOR DEVELOPMENT
OF THE PRODUCT IN THE FIELD, INCLUDING CLINICAL TRIAL PROTOCOLS, MONITORING
PLANS, AND DATA DISCLOSURE PLANS INCLUDED WITH EACH SUCH PROTOCOL, AND ALL
UPDATES OR AMENDMENTS THERETO;

 

(IV)                               REVIEW ANY AND ALL CLINICAL TRIALS, INCLUDING
AUDIT PLANS WITH RESPECT THERETO, CONDUCTED BY UNITED THERAPEUTICS WITH RESPECT
TO THE PRODUCT IN THE FIELD IN THE TERRITORY AND CONDUCTED BY LILLY WITH RESPECT
TO THE ONGOING LILLY TRIALS;

 

(V)                                   REVIEW ANY AND ALL AUDIT REPORTS AND
ACTION PLANS WITH RESPECT THERETO PROVIDED BY UNITED THERAPEUTICS PURSUANT TO
SECTION 5.2(D);

 

(VI)                               REVIEW CONFIRMATION OF UNITED THERAPEUTICS’
COMPLETION OF ANY MONITORING AND QUALITY OVERSIGHT ACTIONS REQUIRED TO BE TAKEN
PURSUANT TO THIS AGREEMENT;

 

(VII)                           REVIEW ANY SERIOUS AND/OR PERSISTENT SITE
NON-COMPLIANCE ISSUES THAT AFFECT PATIENT SAFETY AND/OR DATA INTEGRITY ALONG
WITH THE CORRECTIVE ACTION PLAN, EACH TO THE EXTENT REGARDING THE PRODUCT IN THE
FIELD IN THE TERRITORY;

 

(VIII)                       FACILITATE THE FLOW OF INFORMATION WITH RESPECT TO
THE COMMERCIALIZATION OF THE PRODUCT IN THE FIELD IN THE TERRITORY BY UNITED
THERAPEUTICS AND COMMERCIALIZATION OF THE PRODUCT IN THE FIELD OUTSIDE THE
TERRITORY BY LILLY, WHERE SUCH INFORMATION IS USEFUL TO THE OTHER PARTY;

 

(IX)                              FACILITATE MECHANISMS FOR DISCUSSION BETWEEN
THE PARTIES WITH RESPECT TO SUBMISSION OF REGULATORY FILINGS FOR THE PRODUCT IN
THE FIELD IN THE TERRITORY, INCLUDING PROCESSES FOR PREPARING REGULATORY FILINGS
FOR THE PRODUCT IN THE FIELD IN THE TERRITORY CONSISTENT WITH LILLY’S STANDARD
OPERATING PROCEDURES;

 

(X)                                  FACILITATE MECHANISMS FOR DISCUSSION
BETWEEN THE PARTIES WITH RESPECT TO DEVELOPMENT OF THE PRODUCT IN THE FIELD,
INCLUDING THE CONTENTS AND SUBMISSION OF REGULATORY FILINGS, TO THE EXTENT SUCH
DEVELOPMENT AND SUCH REGULATORY FILINGS ARE USEFUL TO UNITED THERAPEUTICS OR TO
LILLY;

 

(XI)                              FACILITATE COMMUNICATION BETWEEN THE PARTIES
WITH RESPECT TO ALL SERIOUS ADVERSE EVENTS OR SIGNIFICANT SAFETY ISSUES FOR
PRODUCTS WHICH CONTAIN THE COMPOUND IN ALL FIELDS THROUGHOUT THE WORLD TO THE
EXTENT SUCH INFORMATION IS USEFUL TO UNITED THERAPEUTICS OR TO LILLY, CONSISTENT
WITH THE TERMS OF THE SAFETY AGREEMENT AND COORDINATE EFFORTS OF THE PARTIES TO
ENSURE PROPER REPORTING OF ALL ADVERSE EVENTS FOR THE PRODUCT IN THE FIELD IN
THE TERRITORY IN ACCORDANCE WITH APPLICABLE LAW AND CONSISTENT WITH THE TERMS OF
THE SAFETY AGREEMENT;

 

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(XII)                          FACILITATE THE FLOW OF INFORMATION WITH RESPECT
TO ANY MATERIAL NEW STUDIES OF WHICH EITHER PARTY BECOMES AWARE WHICH RELATE TO
THE PRODUCT IN THE FIELD (WHETHER INSIDE OR OUTSIDE OF THE TERRITORY);

 

(XIII)                      FACILITATE THE FLOW OF PUBLICLY AVAILABLE
INFORMATION WITH RESPECT TO ANY MATERIAL STUDIES OF WHICH EITHER PARTY BECOMES
AWARE WHICH RELATE TO ANY COMPETITIVE PRODUCT CONTROLLED BY A THIRD PARTY IN THE
FIELD THROUGHOUT THE WORLD, IN EITHER CASE TO THE EXTENT SUCH INFORMATION IS
USEFUL TO UNITED THERAPEUTICS OR TO LILLY;

 

(XIV)                         FACILITATE THE FLOW OF INFORMATION WITH RESPECT TO
ANY MATERIAL STUDIES BEING CONDUCTED BY LILLY WHICH RELATE TO PRODUCTS WHICH
CONTAIN THE COMPOUND OUTSIDE THE FIELD THROUGHOUT THE WORLD, TO THE EXTENT SUCH
INFORMATION WOULD BE REASONABLY LIKELY TO MATERIALLY ADVERSELY AFFECT THE
PRODUCT IN UNITED THERAPEUTICS’ DOMAIN;

 

(XV)                             IMPLEMENT POLICIES AND PROCEDURES FOR PROVIDING
UNITED THERAPEUTICS WITH COPIES OF ALL CORRESPONDENCE AND COMMUNICATIONS WITH
REGULATORY AUTHORITIES RELATING TO PRODUCTS WHICH CONTAIN THE COMPOUND IN PAH,
AND IN THE EVENT THAT UNITED THERAPEUTICS PURSUES ANY SECONDARY INDICATION WITH
THE APPROVAL OF LILLY AS DESCRIBED IN SECTION 5.2(I), SUCH SECONDARY INDICATION,
TO THE EXTENT SUCH CORRESPONDENCE AND COMMUNICATIONS ARE USEFUL TO UNITED
THERAPEUTICS;

 

(XVI)                         IMPLEMENT POLICIES AND PROCEDURES FOR PROVIDING
UNITED THERAPEUTICS WITH UPDATES REGARDING ALL CORRESPONDENCE AND COMMUNICATIONS
WITH REGULATORY AUTHORITIES RELATING TO PRODUCTS WHICH CONTAIN THE COMPOUND IN
ALL FIELDS THROUGHOUT THE WORLD OTHER THAN PAH, AND IN THE EVENT THAT UNITED
THERAPEUTICS PURSUES ANY SECONDARY INDICATION WITH THE APPROVAL OF LILLY AS
DESCRIBED IN SECTION 5.2(I), SUCH SECONDARY INDICATION, TO THE EXTENT SUCH
CORRESPONDENCE AND COMMUNICATIONS ARE REASONABLY LIKELY TO MATERIALLY ADVERSELY
AFFECT THE PRODUCT;

 

(XVII)                     COORDINATE THE AVAILABILITY, TIMING, AND AMOUNT OF
PLACEBO TO BE SUPPLIED BY LILLY TO UNITED THERAPEUTICS FOR THE DEVELOPMENT OF
THE PRODUCT IN THE FIELD IN THE TERRITORY AND FOR SUPPLY OF THE PRODUCT IN THE
FIELD IN THE TERRITORY, AND PROCEDURES FOR FORECASTING AND ORDERING SUCH PLACEBO
AND PRODUCT PURSUANT TO THE MANUFACTURING AND SUPPLY AGREEMENT;

 

(XVIII)                 MONITOR LILLY’S MANUFACTURING CAPACITY FOR THE PRODUCT
FOR USE IN THE FIELD IN THE TERRITORY PURSUANT TO THE MANUFACTURING AND SUPPLY
AGREEMENT;

 

(XIX)                        ESTABLISH SUBCOMMITTEES AS NEEDED TO ADDRESS ISSUES
IN THE DEVELOPMENT AND COMMERCIALIZATION OF THE PRODUCT IN THE FIELD IN THE
TERRITORY, AND ADDRESS DISPUTES OR DISAGREEMENTS ARISING IN ANY SUBCOMMITTEE SO
ESTABLISHED; AND

 

(XX)                            PERFORM SUCH OTHER FUNCTIONS AS THE PARTIES MAY
AGREE IN WRITING.

 

3.3                               AREAS OUTSIDE THE JSC’S AUTHORITY.  THE JSC
SHALL HAVE NO AUTHORITY OTHER THAN THAT EXPRESSLY SET FORTH IN SECTION 3.2, AND,
EXCEPT AS EXPRESSLY STATED THEREIN, SHALL HAVE NO AUTHORITY WITH RESPECT TO ANY
ACTION OR DECISION RELATING TO LILLY’S DOMAIN, OR THE MANUFACTURE OF

 

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the Product. In no event shall the JSC have the right to modify or amend, or
waive the terms of, or either Party’s compliance with, this Agreement.

 

3.4                               Operating Principles. The Parties hereby
acknowledge and agree that the deliberations and decision-making of the JSC, and
any subcommittee established by the JSC, shall be in accordance with the
following operating principles:

 

(a)                                  Chairpersons. The JSC shall have
co-chairpersons. Each of United Therapeutics and Lilly shall select from their
representatives a co-chairperson for the JSC. The co-chairpersons of the JSC
shall be responsible for calling meetings, preparing and circulating an agenda
in advance of each meeting of the JSC, and preparing and issuing minutes of each
meeting within thirty (30) days thereafter. The JSC co-chairperson of a Party
shall call a meeting of the JSC promptly upon the written request of the other
co-chairperson to convene such a meeting. Such minutes will not be finalized
until both chairpersons review and confirm the accuracy of such minutes in
writing.

 

(b)                                  Meetings. The JSC shall hold meetings at
such times as it elects to do so, but in no event shall such meetings be held
less frequently than twice per Calendar Year. The JSC shall meet alternately at
Lilly’s facilities in Indianapolis, Indiana, and United Therapeutics’ facilities
in Silver Spring, Maryland, or at such locations as the Parties may otherwise
mutually agree. Other employees of each Party (including the Alliance Managers,
as defined in Section 3.5(a)) involved in the Development, manufacture, or
Commercialization of the Product in the Field in the Territory may attend
meetings of the JSC as nonvoting participants, and, with the consent of each
Party, consultants, representatives, or advisors involved in the Development,
manufacture, or Commercialization of the Product may attend meetings of the JSC
as nonvoting observers; provided that such Third Party representatives are under
obligations of confidentiality and non-use applicable to the Confidential
Information of each Party and that are at least as stringent as those set forth
in ARTICLE 11; and provided that the term of such obligations may be reduced by
mutual agreement of the Parties so as to be commercially reasonable based on the
circumstances. Each Party shall be responsible for all of its own expenses
associated with participating in the JSC. Meetings of the JSC may be held by
audio or video teleconference with the mutual consent of the Parties; provided
that one (1) JSC meeting per Calendar Year shall be held in person.

 

(C)                  DECISION MAKING. THE JSC IS AN ADVISORY BODY ONLY, AND THE
RIGHTS AND AUTHORITIES OF THE PARTIES ARE SET FORTH IN THIS AGREEMENT, INCLUDING
SECTION 3.4(C)(II) AND 3.4(C)(III). THE PARTIES SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO CAUSE THEIR RESPECTIVE MEMBERS OF THE JSC TO ACT IN GOOD
FAITH AND COOPERATE WITH ONE ANOTHER. ANY DISAGREEMENT BETWEEN THE PARTIES SHALL
BE FIRST SUBMITTED TO THE ALLIANCE MANAGERS IN ORDER TO FACILITATE A RESOLUTION
AND THEN, IF NOT RESOLVED, AT THE ELECTION OF EITHER PARTY, BE REFERRED FOR
RESOLUTION PURSUANT TO ARTICLE 14.  NOTWITHSTANDING THE FOREGOING, EACH PARTY
HAS FINAL DECISION-MAKING AUTHORITY WITH RESPECT TO CERTAIN MATTERS PURSUANT TO
3.4(C)(II) AND 3.4(C)(III), AND NO DECISION MADE IN ACCORDANCE WITH SUCH FINAL
DECISION-MAKING AUTHORITY SHALL BE SUBJECT TO ANY DISPUTE RESOLUTION MECHANISM
OR PROCEDURE UNDER ARTICLE 14.  NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT
OR THE MANUFACTURING AND SUPPLY AGREEMENT, IN NO EVENT SHALL EITHER PARTY
EXERCISE ITS FINAL DECISION-MAKING AUTHORITY IN A MANNER THAT WOULD HAVE THE
EFFECT OF MODIFYING, OR WOULD

 

14

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OTHERWISE BE IN CONFLICT WITH, THE TERMS OF THIS AGREEMENT OR THE MANUFACTURING
AND SUPPLY AGREEMENT.

 

(ii)                                Lilly shall have final decision-making
authority regarding any and all matters relating to:

 

(1)                                 research, non-clinical development, and
Development, including all Regulatory Filings for submission to Regulatory
Authorities;

 

(2)                                 manufacture of the Product, subject to the
terms of the Manufacturing and Supply Agreement;

 

(3)                                 any product containing the Compound in
Lilly’s Domain;

 

(4)                                 any recall or withdrawal of the Product in
accordance with Section 5.6;

 

(5)                                 patent strategy in respect of all Lilly
Patents, subject to Section 8.2; and

 

(6)                                 any matter that would be reasonably likely
to materially adversely affect Cialis®;

 

provided that, if Lilly exercises its decision-making authority under this
Agreement, including under Section 3.4(c)(ii)(1), 3.4(c)(ii)(2), 3.4(c)(ii)(4),
3.4(c)(ii)(5), 3.4(c)(ii)(6), 5.2(i), 6.2, 8.2(c), 8.3, 8.6(d), 8.7 or 9.8,
Lilly will make a good faith effort to consult with United Therapeutics prior to
making any decision that is reasonably likely to be material to United
Therapeutics, and, if United Therapeutics requests, provide to United
Therapeutics a reasonably detailed written explanation of the basis for such
decision. If the Parties disagree on such decision, Lilly agrees, at United
Therapeutics’ request, to make available a member of Lilly’s Executive Committee
within ten (10) business days to discuss such matter; provided, however, that
such a discussion will not affect Lilly’s right to exercise its final
decision-making authority with respect to such decision.

 

(iii)                            Subject to Section 3.4(c)(ii) or as otherwise
expressly set forth in this Agreement, United Therapeutics shall have final
decision-making authority regarding any and all matters relating to
Commercialization of the Product in the Field in the Territory, subject to
ARTICLE 6.

 

(iv)                               When exercising its decision-making authority
under this Agreement, each Party shall:

 

(1)                                 keep the other Party closely informed about
its activities related to the decision;

 

(2)                                 closely consult with the other Party on such
activities and the possible decision(s) to be made and confer in good faith with
the other Party respecting same;

 

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(3)                                 with respect to Lilly, in evaluating any
decision, treat the Product in United Therapeutics’ Domain as if it is a
proprietary product solely of Lilly; and

 

(4)                                 exercise its decision-making authority in
accordance with the principles set forth in Section 4.1.

 

(d)                                  Meeting Agendas. Each Party shall disclose
to the other Party proposed agenda items along with appropriate information at
least ten (10) Business Days in advance of each meeting of the JSC; provided
that, under exigent circumstances requiring JSC input, a Party may provide its
agenda items to the other Party within a lesser period of time in advance of the
meeting, or may propose that there not be a specific agenda for a particular
meeting, so long as such other Party consents to such later addition of such
agenda items or the absence of a specific agenda for such JSC meeting.

 

3.5                               Alliance Managers.

 

(a)                                  Each of the Parties shall appoint a single
individual to act as that Party’s point of contact for communications between
the Parties relating to the activities conducted under this Agreement (each, an
“Alliance Manager”).  Each Party may change its designated Alliance Manager from
time to time upon written notice to the other Party. Any Alliance Manager may
designate a substitute to temporarily perform the functions of that Alliance
Manager by written notice to the other Party.

 

(b)                                  Each Alliance Manager shall be charged with
creating and maintaining a collaborative work environment between the Parties
and within the JSC. Each Alliance Manager will also:  (i) be the point of first
referral in all matters of conflict resolution; (ii) coordinate the relevant
functional representatives of the Parties in developing and executing strategies
and plans for the Product in the Field in the Territory; (iii) provide a single
point of communication for seeking consensus both internally within the
respective Parties’ organizations and between the Parties regarding key strategy
and plan issues; (iv) identify and bring disputes to the attention of the JSC in
a timely manner; (v) plan and coordinate cooperative efforts and internal and
external communications; and (vi) take responsibility for ensuring that
governance activities, such as the conduct of required JSC meetings and
production of meeting minutes occur as set forth in this Agreement, and that
relevant action items resulting from such meetings are appropriately carried out
or otherwise addressed.

 

(c)                                  The Alliance Managers shall use good faith
efforts to attend all JSC meetings and support the co-chairpersons of the JSC in
the discharge of their responsibilities. Alliance Managers shall be nonvoting
participants in JSC meetings, unless they are also appointed members of the JSC
pursuant to Section 3.2(a); provided, however, that an Alliance Manager may
bring any matter to the attention of the JSC in order to facilitate a resolution
of such matter.

 

3.6                               Independence. Subject to the terms of this
Agreement, the activities and resources of each Party shall be managed by such
Party, acting independently and in its individual capacity. The relationship
between the Parties is that of independent contractors, and

 

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neither Party shall have the power to bind or obligate the other Party in any
manner, other than as is expressly set forth in this Agreement.

 

ARTICLE 4

JOINT OBLIGATIONS AND DILIGENCE

 

4.1                               Conduct of the Parties. The Parties’ mutual
objective is to permit United Therapeutics, pursuant to and in accordance with
the terms of this Agreement, to Develop and Commercialize the Product in United
Therapeutics’ Domain while not taking any action that would be reasonably likely
to materially adversely affect development and commercialization of products
containing the Compound in Lilly’s Domain. Each Party shall conduct itself and
its activities hereunder consistent with that understanding, consistent with
sound and ethical business and scientific practices. Each Party intends, in
working with the other Party to Develop and Commercialize the Product in the
Field in the Territory and otherwise as set forth in this Agreement, to assign
responsibilities for the various operational aspects of the Development and
Commercialization of the Product in United Therapeutics’ Domain to those
portions of each Party’s organization that have the most appropriate resources,
expertise, and responsibility for such functions. In all matters related to such
activities, the Parties shall strive to balance, as best as reasonably possible,
their respective legitimate interests and concerns and to realize the economic
potential of the Product in United Therapeutics’ Domain and products containing
the Compound in Lilly’s Domain (taking into account the risks and costs of
further Development and Commercialization).

 

4.2                               Commercially Reasonable Efforts. Each Party
shall use Commercially Reasonable Efforts to conduct the Development to obtain
Regulatory Approval for the Product for use in the Field in the Territory and to
carry out those activities for which it is responsible as set forth in each
Commercialization Plan, it being understood that activities set forth in such
Commercialization Plan with respect to later years, when compared to the
then-present year, shall be of a less definitive nature than those set forth for
the then-present year.

 

4.3                               Initial Transfer of Know-How. After the
Effective Date, the Parties shall use Commercially Reasonable Efforts to
transfer any Lilly Know-How to United Therapeutics that United Therapeutics,
acting reasonably, may request.

 

4.4                               Sharing of Development and Commercialization
Information

 

(a)                  From time to time during the Term, United Therapeutics,
acting reasonably, may request access to any Lilly Know-How that is Useful to
United Therapeutics, and Lilly shall use Commercially Reasonable Efforts to
provide such access. From time to time during the Term, Lilly, acting
reasonably, may request access to any United Therapeutics Know-How that is
Useful to Lilly, and United Therapeutics shall use Commercially Reasonable
Efforts to provide such access.

 

(b)                  During the Term, each Party shall use Commercially
Reasonable Efforts to make available to the other Party information that is
Useful to the other Party relating to the Development or Commercialization of
the Product in the Field at no cost to such other Party.

 

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4.5                               Sharing of Market Research. Each Party may, at
its discretion and expense, undertake such market surveys, market research and
analyses thereof relating to the Product in the Field (whether inside or outside
of the Territory) as it deems fit, and such information shall be and remain the
Confidential Information of the Party undertaking same. During the Term, each
Party shall, to the extent it is capable of doing so, make any such information,
to the extent such information is Useful to the other Party, available to the
other Party at no cost to that other Party.

 

4.6                               Duty to Confer and Consult. The Parties shall
confer in good faith regarding their respective activities under this Agreement
and the strategies for pursuing same. Each Party shall closely consult with the
other Party on its activities under this Agreement, and shall keep the other
Party closely informed where such information is Useful to the other Party.

 

4.7                               Quality Agreement. The Parties will negotiate
the terms and conditions of an agreement regarding quality-related aspects of
the relationship between Lilly and United Therapeutics including quality
assurance procedures (the “Quality Agreement”).

 

ARTICLE 5

DEVELOPMENT AND REGULATORY ACTIVITIES

 

5.1                               Current Status of Development of Product. As
of the Effective Date, Lilly holds the Regulatory Approval for a product
containing the Compound in a certain finished form and formulation under the
Lilly brand name Cialis® for treatment of erectile dysfunction, has conducted
clinical trials for the Product in the Field, has submitted a New Drug
Application to the FDA for Regulatory Approval for the Product in PAH in the
Territory, and is conducting certain clinical trials for the Product as of the
Effective Date set forth in Exhibit 5.1 (the “Ongoing Lilly Trials”).

 

5.2                               Clinical Development Activities.

 

(a)                                  Lilly will use Commercially Reasonable
Efforts to complete the Ongoing Lilly Trials, and any follow-on analysis and
reporting and filing results with the FDA with respect thereto.

 

(b)                                  Subject to Sections 5.2(a), 5.2(c), 5.2(d),
5.2(e) and 5.2(f), United Therapeutics’ Development Activities shall include
conducting (or having conducted) all clinical trials (including Phase IV
studies) for the Product in the Field in the Territory other than the Ongoing
Lilly Trials. Each Party agrees and acknowledges that the other Party shall not
be in breach of this Agreement solely as a result of the failure of the Product
in any clinical trial.

 

(c)                                  If the Parties agree in advance in writing
that Lilly shall conduct any clinical development activities on behalf of United
Therapeutics in United Therapeutics’ Domain, other than with respect either to
the Ongoing Lilly Trials or as otherwise set forth in Section 5.2(e), then the
Parties, acting reasonably, shall agree upon a protocol for each such activity.

 

(d)                                  In the event that the FDA requires any
additional clinical study to be performed for the Product prior to obtaining
Regulatory Approval of the Product in PAH in the

 

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Territory, United Therapeutics shall be responsible for conducting such study;
provided that, prior to initiation of any such study, United Therapeutics shall
notify Lilly, and submit to Lilly the protocol for such study, including any and
all quality plans with respect thereto, including a plan for monitoring and
auditing such study, and shall implement any and all of Lilly’s comments and
suggestions regarding such study protocol and quality plans, which comments and
suggestions shall be made to United Therapeutics as soon as reasonably possible,
and in any event within sixty (60) days after Lilly’s receipt of the protocol
and quality plans. For clarity, United Therapeutics shall not conduct any such
study prior to obtaining Lilly’s approval, not to be unreasonably withheld, with
respect to such study and such study protocol and quality plans. If the FDA
requires any additional non-clinical study to be performed for the Product prior
to obtaining Regulatory Approval of the Product in PAH in the Territory, the
Parties will confer to determine what actions should be taken.

 

(e)                                  In the event that the FDA conditions
initial Regulatory Approval for Product in PAH in the Territory upon a
commitment to conduct following Regulatory Approval any additional non-clinical
study or any additional clinical study for the Product, Lilly and United
Therapeutics will use Commercially Reasonable Efforts to conduct such study.
Lilly, acting reasonably, shall establish the protocol for such study, including
any and all quality plans with respect thereto, including a plan for monitoring
and auditing such study.

 

(f)                                    The Parties acknowledge that United
Therapeutics intends to conduct certain Phase IV studies for the Product, as
further described on Exhibit 5.2(f); provided, however, that all such studies
shall be limited to PAH, and in the event that United Therapeutics pursues any
Secondary Indication with the approval of Lilly as described in Section 5.2(i),
such Secondary Indication. United Therapeutics, prior to initiating any such
Phase IV study, will provide the protocol for such Phase IV study to Lilly,
together with other information related to such Phase IV study requested by
Lilly, for review and approval, such approval not to be unreasonably withheld.

 

(g)                                 United Therapeutics will not support, either
directly or indirectly, any investigator initiated trial (“IIT”) with the
Product unless, prior to the initiation of such an IIT, United Therapeutics
provides the protocol for such IIT to Lilly, together with other information
related to such IIT requested by Lilly, for review and approval, such approval
not to be unreasonably withheld. The Parties will establish, as soon as
practicable after the Effective Date, a standard procedure for the review and,
where appropriate, approval by Lilly of the protocol, and other related
information, for an IIT.

 

(h)                                 In the event that United Therapeutics
desires to conduct any label enhancement study for the Product for PAH (other
than a study required by FDA as described in Section 5.2(e) or for a Secondary
Indication as described in Section 5.2(i)) after obtaining Regulatory Approval
for the Product in PAH in the Territory, United Therapeutics shall provide the
protocol for such study to Lilly, together with other information related to
such study requested by Lilly, for review and approval, such approval not to be
unreasonably withheld.

 

(i)                                    The Parties acknowledge and agree that,
under the terms of this Agreement, Lilly has granted rights to United
Therapeutics in the Field, which includes Secondary Indications, but that United
Therapeutics will not conduct any Development or

 

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Commercialization activities with respect to any Secondary Indication without
the prior consent of Lilly which may be given in Lilly’s sole discretion. In the
event that United Therapeutics desires to conduct any Development activities,
including any clinical study, with respect to the Product in a Secondary
Indication in the Territory, United Therapeutics will notify Lilly and submit to
Lilly the plan for such Development, and shall not conduct any such Development
without the prior written consent of Lilly, which may be withheld in Lilly’s
sole discretion. If Lilly consents to the conduct of such Development, United
Therapeutics shall submit to Lilly the protocol for any study that United
Therapeutics intends to conduct in connection with such Development, including
for example any and all quality plans with respect thereto and a plan for
monitoring and auditing such study. United Therapeutics shall not conduct any
such study prior to obtaining Lilly’s approval, which may be withheld in Lilly’s
sole discretion. In the event that Lilly approves such a plan for Development
for a Secondary Indication, and studies conducted under such plan for
Development achieve pre-specified primary endpoints, Lilly will not thereafter
object to the pursuit of Regulatory Approval for such Secondary Indication,
except based on valid safety, quality, or material regulatory concerns.

 

(j)                                    United Therapeutics shall from time to
time provide a list of Third Party contractors used in the conduct of
Development activities under this Agreement, and Lilly may object to the use of
same by providing notice of such objection to United Therapeutics. United
Therapeutics will not use such contractors without the prior written consent of
Lilly. United Therapeutics shall disclose any data to any Third Party only as
necessary for such Third Party to conduct the Development activities assigned to
such Third Party and under obligations of confidentiality and non-use applicable
to the Confidential Information of each Party that are at least as stringent as
those set forth in ARTICLE 11; provided that the term of such obligations may be
reduced so as to be commercially reasonable based on the circumstances. United
Therapeutics shall provide a full audit report and any requested supporting
documentation with respect to any and all audits performed by United
Therapeutics of any Third Party contractors and/or clinical trial sites used by
United Therapeutics to conduct Development activities under this Agreement.
Lilly shall have the right to audit together with United Therapeutics, any and
all source data produced by United Therapeutics and/or any Third Party
contractors, particularly those Third Party contractors whose activities would
be material to the conduct of a study with specific reference to the quality of
data to be obtained from such study, and/or clinical trial sites used by United
Therapeutics to conduct Development activities. United Therapeutics shall notify
the JSC of any serious and/or persistent site non-compliance issues, with
respect to clinical trials conducted by United Therapeutics under this
Agreement, along with a plan for correcting such issues. United Therapeutics
shall provide confirmation to the JSC upon completion of any such corrective
measures.

 

(k)                                Each Party will have the responsibility for
publication plans surrounding all studies, including authorship, abstract,
poster, slide, and manuscript content and submission plans, conducted by such
Party, subject to Section 11.6.

 

5.3                               Regulatory Matters.

 

(a)                                  Lilly Responsibilities in Lilly’s Domain.
As between Lilly and United Therapeutics, Lilly shall be solely responsible for
any and all regulatory activities with respect to the Compound and products
containing the Compound in Lilly’s Domain, including filing of all

 

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Regulatory Filings for the Compound and such products, maintenance of all
Regulatory Approvals, any reports or submissions required to be made to any
non-governmental Third Party payors, and any and all regulatory matters arising
after obtaining Regulatory Approval, including post-marketing inquiries and
safety surveillance activities.

 

(b)                                  Overview of Responsibilities in the Field
and in the Territory. As between Lilly and United Therapeutics, subject to the
terms of this Agreement, Lilly shall be responsible for regulatory activities
with respect to the Product in the Field in the Territory, as described in
Sections 5.3(c), 5.3(d), 5.4, 5.5 and 5.6, except with respect to preparation of
any and all Regulatory Filings for all indications in the Field (other than for
the Ongoing Lilly Trials), which shall be the responsibility of United
Therapeutics as described in Section 5.3(d).  United Therapeutics shall
cooperate with Lilly and take reasonable actions to assist Lilly in obtaining
Regulatory Approvals for the Product in the Field in the Territory, including in
the drafting and review of all Regulatory Filings for the Product in the Field
in the Territory.

 

(c)                                  Regulatory Activities by Lilly in the Field
and in the Territory.

 

(i)                                    Lilly shall cooperate with United
Therapeutics and be responsible for and shall use Commercially Reasonable
Efforts to conduct all regulatory activities with respect to seeking and
maintaining Regulatory Approval for the Product for use in the Field in the
Territory, including:

 

(1)                                 preparing, filing and prosecuting Regulatory
Filings and seeking and maintaining Regulatory Approvals for (i) the New Drug
Application Lilly filed with the FDA for Regulatory Approval for the Product for
the treatment of Pulmonary Arterial Hypertension, and (ii) the Ongoing Lilly
Trials;

 

(2)                                 subject to Section 5.2(i), reviewing, filing
and prosecuting Regulatory Filings and seeking and maintaining Regulatory
Approvals for Secondary Indications as prepared by United Therapeutics; and

 

(3)                                 addressing all regulatory matters arising
after obtaining Regulatory Approval, including, only for purposes of example but
not limitation, regulatory post-marketing inquiries.

 

(ii)                                United Therapeutics will control the NDC
number for the Product and, as holder of the NDC number, be responsible for all
obligations with respect to providing pricing reports to government authorities
having responsibility for pricing matters, including those Regulatory
Authorities overseeing matters relating to Medicare and Medicaid.

 

(iii)                            The Parties anticipate seeking Regulatory
Approval for registration of a separate Lilly Product Mark for the Product in
the Field in the Territory. Lilly shall make Commercially Reasonable Efforts to
apply for and secure registration of a Lilly Product Mark for the Product in the
Field in the Territory.

 

(iv)                               Lilly will provide United Therapeutics with
prompt detailed written notice of all updates and revisions of any kind or
nature to the Regulatory Filings for the Product in the Field in the Territory.
At United Therapeutics’ reasonable request, Lilly shall

 

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provide United Therapeutics with all Information and documentation relating to
any such regulatory activities. Lilly shall keep United Therapeutics informed
about all regulatory activities or developments with respect to Lilly’s Domain
that are reasonably likely to materially adversely affect United Therapeutics’
Domain.

 

(d)                                  Regulatory Activities by United
Therapeutics in the Field and in the Territory. With respect to the preparation
and filing of Regulatory Filings for the Product in the Field in the Territory
for all Secondary Indications, and for all post-marketing studies following the
Regulatory Approval of the Product in the Field in the Territory:

 

(i)                                    United Therapeutics shall be responsible
for and, if it opts to proceed with any such Regulatory Filing, shall use
Commercially Reasonable Efforts to prepare all such Regulatory Filings for
review and approval by Lilly.

 

(ii)                                Lilly shall provide upon United
Therapeutics’ request information regarding Lilly’s processes for filing
Regulatory Filings as necessary for United Therapeutics to prepare all such
Regulatory Filings in a form that is consistent with such processes, and United
Therapeutics shall prepare all such Regulatory Filings in a form that is
consistent with such processes.

 

(iii)                            United Therapeutics shall submit to Lilly each
such proposed Regulatory Filing prepared for Lilly’s comments and review, such
review and comments to be transmitted to United Therapeutics as soon as
reasonably possible, and in any event within the periods set forth in this
Section 5.3(d)(iii).  Unless Lilly notifies United Therapeutics in writing of
Lilly’s proposed modification of a Regulatory Filing prepared by United
Therapeutics hereunder within sixty (60) days of Lilly’s receipt thereof, such
Regulatory Filing shall be deemed approved by Lilly as to form and substance and
ready for filing with the relevant Regulatory Authority. If Lilly notifies
United Therapeutics, pursuant to Lilly’s exercise of its authority under
Section 3.4(c)(ii), that such proposed Regulatory Filing lacks necessary
information, is not in accordance with Lilly’s processes for preparing
Regulatory Filings, does not comply with Applicable Laws, or otherwise is not
appropriate for filing with the relevant Regulatory Authority, it shall so
notify United Therapeutics during such sixty (60) day period, and the Parties
shall meet and confer with respect to any changes or additions recommended by
Lilly. In addition, the JSC shall establish mechanisms or guidelines for the
interactions following such meeting of the Parties with respect to the
submission of Regulatory Filings for the Product in the Field in the Territory,
including the submission of information as a follow up to any such submitted
Regulatory Filing, which mechanisms or guidelines shall be consistent with the
Parties’ obligations described in this Section 5.3.

 

(iv)                               Following Lilly’s approval of a Regulatory
Filing under this Section 5.3 (either by express approval or by failure to
reject as provided in Section 5.3(d)(iii)), Lilly agrees to file promptly, in
its own name, such Regulatory Filing with the proper Regulatory Authority, with
a copy of each such Regulatory Filing to be simultaneously delivered to United
Therapeutics.

 

(e)                                  Ownership of Regulatory Filings. All
Regulatory Approvals and Regulatory Filings, including all global databases,
relating to the Product in the Field in the

 

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Territory shall be solely owned by Lilly and held in the name of Lilly or its
designated Affiliates. Lilly shall designate a representative to serve as the
designated regulatory official for the Product in the Field in the Territory for
purposes of receiving communications from the FDA.

 

5.4                               Interactions with Authorities; Regulatory
Inquiry, Inspection, and Audit.

 

(a)                                  Except with respect to marketing materials
or as may be required by Applicable Law, United Therapeutics shall not
communicate regarding the Product in the Field in the Territory with any
Regulatory Authority unless explicitly requested or permitted in writing to do
so by Lilly or unless so ordered by a Regulatory Authority, in which case United
Therapeutics shall provide notice of such order promptly to Lilly. United
Therapeutics may communicate with Regulatory Authorities regarding marketing
materials for the Product in the Field in the Territory in accordance with an
approach that ensures appropriate regulatory disclosure, which approach shall be
mutually agreed upon by the Parties prior to any such communication; provided,
however, that United Therapeutics, upon Lilly’s request, will deliver to Lilly a
copy of any and all such marketing materials prior to filing such marketing
materials with FDA. Each Party shall promptly provide the other Party with
copies of all written or electronic correspondence or communications received by
it from Regulatory Authorities to the extent such correspondence or
communications are Useful to the other Party; provided, however, that Lilly’s
obligation with respect to correspondence and communications relating to the
manufacture of Product will be governed by the terms of the Manufacturing and
Supply Agreement and not by this Section 5.4(a).  If such correspondence or
communication requires a response, the Parties shall collaborate to prepare a
draft response, which draft shall be subject to approval by Lilly (either by
express approval or by failure to reject as provided in Section 5.3(d)(iii)),
and where so approved by Lilly, filed by the Party from whom the FDA requested a
response.

 

(b)                                  To the extent possible, and as soon as
reasonably possible, Lilly shall provide to United Therapeutics reasonable
written notice of all meetings and conference telephone calls with any
Regulatory Authority in which matters that would be expected to relate to the
Product in the Field in the Territory will be discussed. United Therapeutics
shall have the right to have reasonable representation present at all such
meetings and have reasonable representation attend each such conference
telephone call with any Regulatory Authority in which matters that would be
expected to relate to the Product in the Field in the Territory will be
discussed, in each case as silent observers (except with respect to marketing
materials) and to the extent permitted by such relevant Regulatory Authority.
Notwithstanding anything to the contrary in this Agreement: United Therapeutics
will not have a right to have representation at any meeting or in any conference
telephone call that would be expected to relate to Cialis® or the manufacture of
Product; and, if United Therapeutics is represented at any meeting or conference
call in which matters relating to Cialis® or the manufacture of Product will be
discussed, United Therapeutics will excuse itself from those discussions. To the
extent possible, and as soon as reasonably possible, United Therapeutics shall
provide to Lilly reasonable written notice of all meetings and conference
telephone calls with any Regulatory Authority in the Territory in which matters
that would be expected to relate to the Compound or the Product will be
discussed. Lilly shall have the right to have reasonable representation present
at all such meetings and have reasonable representation attend each such
conference telephone call with any

 

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Regulatory Authority in the Territory relating to the Compound or the Product,
in each case, to the extent permitted by such relevant Regulatory Authority.

 

(c)           Each Party shall notify the other Party within one (1) Business
Day after it receives information about the initiation of any investigation or
inquiry by any Regulatory Authority concerning the Development, manufacture, use
or Commercialization of the Product in the Field to the extent such
investigation or inquiry would be reasonably likely to materially adversely
affect the other Party’s Domain.

 

(d)           If a Regulatory Authority desires to conduct an inspection or
audit with regard to the Product of a Party’s facility or a facility under
contract with a Party with respect to the activities of either Party relevant to
this Agreement, such Party shall permit and cooperate with such inspection or
audit, and shall cause the contract facility to permit and cooperate with such
Regulatory Authority during such inspection or audit.  Lilly shall have the
right to file all responses to any Regulatory Authority in connection with any
such inspection or audit of any facility, where permitted by Applicable Law, and
if it cannot do so under Applicable Law, then Lilly shall have the right to
approve any such response that may be prepared by United Therapeutics prior to
its submission to the relevant Regulatory Authority (either by express approval
or by failure to reject as provided in Section 5.3(d)(iii)).  The Party so
inspected or audited shall conform its activities under this Agreement to any
commitments made in such a response, except to the extent that such Party
believes in good faith that such commitments violate Applicable Law.

 

5.5          DRUG SAFETY.

 

(a)           Adverse Event Reporting.  Lilly shall be responsible for all
activities related to the processing, evaluation, and reporting of Adverse
Events to appropriate authorities, in accordance with local requirements, for
the Product for all indications (including the Field) in all Territories. 
United Therapeutics shall assist Lilly in the surveillance, receipt, evaluation,
and reporting of Adverse Events for the Product in the Field in the Territory. 
United Therapeutics and Lilly shall enter into a safety agreement setting forth
a process regarding compliance with all Applicable Laws and both Parties’
obligations related to such Adverse Event responsibilities for the Product (the
“Safety Agreement”).  In addition, the Safety Agreement will set forth
procedures for sharing information between the Parties regarding Adverse Events
specific to the Field.  The Parties shall commence negotiation of such safety
agreement within thirty (30) days after the Execution Date.  Notwithstanding the
forgoing, United Therapeutics shall notify the JSC of any serious and/or
persistent site non-compliance issues, with respect to Development and
Commercialization activities conducted by United Therapeutics under this
Agreement, that affect patient safety and/or data integrity along with a plan
for correcting such issues.  United Therapeutics shall provide written
confirmation to the JSC upon completion of any such corrective measures.  The
Safety Agreement will provide that Lilly shall provide United Therapeutics with
aggregated safety information related to Compound (excluding Adverse Events
resulting from Development activities conducted outside the Field), subject to
redaction by Lilly from such reports of proprietary information.

 

(b)           Right to Audit.  Each Party shall have the right to perform audits
of the other Party’s pharmacovigilance activities relating to the Parties’
activities under the terms of

 

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this Agreement including compliance by the other Party with Applicable Law.  The
frequency of such audits will be no more than once in any three (3) year period
during the Term; provided that such audits may be more frequent if, in the
auditing Party’s sole discretion, more frequent audits are necessary by a
risk-based approach, and except in ‘for cause’ situations where, in the event of
a serious or potentially serious issue, additional audits may be conducted.  The
notification of one party’s intent to conduct such an audit will be provided in
writing to the other Party within a reasonable time period in advance, based
upon the particular circumstances of the situation.

 

5.6          PRODUCT WITHDRAWALS AND RECALLS.  IN THE EVENT THAT (A) AN EVENT,
INCIDENT, OR CIRCUMSTANCE HAS OCCURRED WHICH MAY RESULT IN THE NEED FOR A RECALL
OR OTHER REMOVAL OF THE PRODUCT OR ANY LOT OR LOTS THEREOF FROM THE MARKET IN
THE FIELD IN THE TERRITORY; (B) ANY REGULATORY AUTHORITY IN THE TERRITORY
THREATENS OR INITIATES ANY ACTION TO REMOVE THE PRODUCT FROM THE MARKET IN THE
FIELD IN THE TERRITORY; OR (C) ANY REGULATORY AUTHORITY IN THE TERRITORY
REQUIRES DISTRIBUTION OF A “DEAR DOCTOR” LETTER OR ITS EQUIVALENT, REGARDING USE
OF THE PRODUCT IN THE FIELD IN THE TERRITORY, LILLY SHALL PROMPTLY ADVISE UNITED
THERAPEUTICS IN WRITING WITH RESPECT THERETO, AND SHALL PROVIDE TO UNITED
THERAPEUTICS COPIES OF ALL RELEVANT CORRESPONDENCE, NOTICES, AND ANY OTHER
RELATED DOCUMENTS.  UNLESS OTHERWISE AGREED BY THE PARTIES, LILLY SHALL BE
RESPONSIBLE FOR CONDUCTING THE RECALL.  NO RECALL SHALL BE COMMENCED IN THE
TERRITORY WITHOUT LILLY’S PRIOR WRITTEN CONSENT, SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD.  UNITED THERAPEUTICS SHALL, UPON REASONABLE REQUEST BY
LILLY ASSIST LILLY IN THE CONDUCT OF ANY SUCH RECALL OR WITHDRAWAL IN THE
TERRITORY, WHICH RECALL OR WITHDRAWAL SHALL BE CONTROLLED BY LILLY IN LILLY’S
SOLE DISCRETION.  EACH PARTY WILL COOPERATE WITH THE OTHER PARTY IN THE
PERFORMANCE OF ANY RECALL OR WITHDRAWAL. TO THE EXTENT ANY RECALL OF THE PRODUCT
IS IMPLEMENTED AS A RESULT OF LILLY’S FAULT OR NEGLIGENCE, IN ADDITION TO ANY
OBLIGATIONS UNDER ARTICLE 12, LILLY SHALL (I) BEAR ALL OF LILLY’S COSTS AND ALL
REASONABLE COSTS INCURRED BY UNITED THERAPEUTICS IN CONNECTION WITH SUCH RECALL
AND (II) EITHER, AT ITS SOLE OPTION, REPLACE OR CREDIT UNITED THERAPEUTICS FOR
THE COST OF THE RELEVANT LOTS OF THE PRODUCT SUBJECT TO THE RECALL.  FOR ANY AND
ALL RECALLS OF THE PRODUCT IN THE FIELD IN THE TERRITORY REQUIRED TO THE EXTENT
DUE TO ANY OTHER REASON, UNITED THERAPEUTICS SHALL BEAR ALL OF UNITED
THERAPEUTICS’ COSTS AND LILLY’S REASONABLE COSTS INCURRED IN CONNECTION WITH
SUCH RECALL.

 

5.7          DEVELOPMENT EXPENSES.  AS BETWEEN LILLY AND UNITED THERAPEUTICS:

 

(a)           Except as provided in Sections 5.7(b), 5.7(c), 5.7(d) and 5.7(f),
Lilly shall bear any and all of its costs and expenses incurred in connection
with its Development under this Agreement, and United Therapeutics shall bear
any and all its the costs and expenses incurred in connection with its
Development under this Agreement.

 

(b)           If the FDA requires any additional clinical study to be performed
for the Product prior to obtaining Regulatory Approval of the Product in PAH in
the Territory as described in Section 5.2(d), United Therapeutics, at its cost
and expense, shall be responsible for conducting such additional clinical
study(ies) and Lilly will bear the regulatory costs and expenses incurred in
connection with such additional clinical study(ies).

 

(c)           If the FDA conditions initial Regulatory Approval for Product in
PAH in the Territory upon a commitment to conduct, following Regulatory
Approval, any additional non-clinical study or any additional clinical study for
the Product as described in Section 5.2(e), the Parties shall bear equally the
Reasonable Costs of the Parties incurred in connection with

 

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such non-clinical study or such additional clinical study, as applicable in
accordance with a budget to be agreed upon by the Parties and Lilly will bear
the regulatory costs and expenses incurred in connection with such additional
clinical study(ies).

 

(d)           If United Therapeutics pursues clinical development in a Secondary
Indication pursuant to and in accordance with Section 5.2(i), United
Therapeutics shall bear: any and all costs and expenses incurred in connection
with such clinical development; and shall reimburse Lilly for Lilly’s Reasonable
Costs in connection with making Regulatory Filings and seeking Regulatory
Approval for such Secondary Indication in accordance with a budget to be agreed
upon by the Parties.

 

(e)           If Lilly uses any Information obtained in the conduct of the
Development referred to in one or more of Section 5.7(b) or 5.7(d) in filing for
a regulatory approval for the Product outside the Territory for any indication
for which a regulatory approval for the Product has not been obtained previously
outside the Territory (a “New Indication”), then Lilly shall reimburse United
Therapeutics an amount equal to fifty percent (50%) of the reasonable costs and
expenses (including full time equivalent costs and Third Party costs) as having
been calculated by United Therapeutics for its internal accounting purposes,
such calculation performed consistently with the practice across such United
Therapeutics’ organization, incurred by United Therapeutics in connection with
the conduct of the Development that gave rise to the Information.  The full time
equivalent rate shall be one that is appropriate for such circumstance. Payment
by Lilly of such amount shall be due upon obtaining regulatory approval for such
New Indication, and paid by Lilly within ten (10) days after the date of such
regulatory approval.

 

(f)            If Lilly conducts any clinical development activities on behalf
of United Therapeutics in United Therapeutics’ Domain pursuant to
Section 5.2(c), United Therapeutics shall reimburse Lilly for Lilly’s Reasonable
Costs for such activities.

 

ARTICLE 6

COMMERCIALIZATION

 

6.1          PRINCIPLES OF COMMERCIALIZATION.  THE PARTIES INTEND TO
COMMERCIALIZE THE PRODUCT IN THE FIELD IN THE TERRITORY AS SET FORTH IN THIS
ARTICLE 6.  INITIALLY, THE PARTIES INTEND TO DEVELOP AND COMMERCIALIZE THE
PRODUCT FOR PAH IN THE TERRITORY BUT, IF UNITED THERAPEUTICS REQUESTS THAT
DEVELOPMENT AND COMMERCIALIZATION BE PURSUED IN ANY SECONDARY INDICATION, AND
LILLY APPROVES SUCH DEVELOPMENT AND COMMERCIALIZATION AS DESCRIBED IN
SECTION 5.2(I), THE PARTIES MAY SEEK TO OBTAIN REGULATORY APPROVALS UNDER THIS
AGREEMENT FOR ONE OR MORE SECONDARY INDICATIONS WITHIN THE TERRITORY.  LILLY
SHALL MANUFACTURE AND SUPPLY THE PRODUCT FOR SUCH DEVELOPMENT AND
COMMERCIALIZATION PURSUANT TO THE MANUFACTURING AND SUPPLY AGREEMENT.  EACH
PARTY SHALL APPOINT A REPRESENTATIVE TO BE SUCH PARTY’S SINGLE POINT OF CONTACT
TO FACILITATE INFORMATION FLOW BETWEEN THE PARTIES RELATING TO EACH PARTY’S
EXPERIENCE AND RELATIONSHIPS IN SUCH PARTY’S DOMAIN TO ASSIST THE OTHER PARTY IN
THE OTHER PARTY’S DOMAIN.  EACH PARTY SHALL FIRST ADDRESS ANY COMMUNICATIONS
RELATING TO COMMERCIALIZATION TO SUCH REPRESENTATIVES UNLESS OTHERWISE AGREED TO
BY THE PARTIES ON A CASE-BY-CASE BASIS.   SUCH REPRESENTATIVES SHALL, WITHOUT
LIMITATION, COORDINATE DIRECT INVOLVEMENT OR MEETINGS WITH SUBJECT MATTER
EXPERTS WITHIN EACH PARTY’S INTERNAL ORGANIZATION AND/OR ITS FIELD ACCOUNT
MANAGEMENT

 

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ORGANIZATION.  NOTWITHSTANDING THE FOREGOING, LILLY’S REPRESENTATIVE SHALL NOT
BE REQUIRED TO PROVIDE DETAILS RELATING TO ANY CUSTOMER SPECIFIC TRANSACTION OR
AGREEMENT.

 

6.2          COMMERCIALIZATION PLAN.  ALL COMMERCIALIZATION OF THE PRODUCT IN
THE FIELD IN THE TERRITORY SHALL BE CONDUCTED PURSUANT TO A COMMERCIALIZATION
PLAN, WHICH SHALL SET FORTH THE PLAN FOR THE DETAILING AND PROMOTION OF THE
PRODUCT IN THE FIELD IN THE TERRITORY IN ACCORDANCE WITH APPLICABLE LAWS AND THE
ACTIVITIES TO BE CARRIED OUT RELATED THERETO (THE “COMMERCIALIZATION PLAN”). 
THE PARTIES HAVE AGREED UPON A HIGH-LEVEL OUTLINE OF THE COMMERCIALIZATION PLAN,
AS FURTHER DESCRIBED ON EXHIBIT 6.2.  NO LATER THAN NINETY (90) DAYS AFTER THE
EFFECTIVE DATE, AND PRIOR TO JANUARY 1 OF EACH AND EVERY CALENDAR YEAR AFTER THE
FIRST CALENDAR YEAR, UNITED THERAPEUTICS SHALL SUBMIT TO THE JSC FOR REVIEW AN
UPDATED COMMERCIALIZATION PLAN.  FOR PURPOSES OF CLARIFICATION, AFTER SUBMISSION
OF THE FIRST UPDATED COMMERCIALIZATION PLAN AND NOT LATER THAN NINETY (90) DAYS
AFTER THE EFFECTIVE DATE, UNITED THERAPEUTICS SHALL SUBMIT THE FIRST ANNUAL
UPDATED COMMERCIALIZATION PLAN TO THE JSC PRIOR TO THE START OF THE SECOND
CALENDAR YEAR (I.E., PRIOR TO JANUARY 1, 2010).  IF LILLY DETERMINES THAT SUCH
UPDATED COMMERCIALIZATION PLAN DOES NOT COMPLY WITH APPLICABLE LAWS, INCLUDING
LAWS RELATING TO PROMOTIONAL AND ADVERTISING MATERIALS AS WELL AS ACCEPTED
INDUSTRY STANDARDS AND LILLY’S ETHICAL POLICIES, IN EACH CASE WITH RESPECT TO
THE PRODUCT IN THE FIELD IN THE TERRITORY, OR THAT THE ACTIVITIES CONDUCTED
UNDER SUCH UPDATED COMMERCIALIZATION PLAN ARE REASONABLY LIKELY TO MATERIALLY
ADVERSELY AFFECT PRODUCTS IN LILLY’S DOMAIN, LILLY SHALL BE PERMITTED TO
PROPOSE, IN GOOD FAITH, REVISIONS TO SUCH UPDATED COMMERCIALIZATION PLAN, AND
UNITED THERAPEUTICS SHALL REVISE SUCH COMMERCIALIZATION PLAN. IN THE EVENT OF
ANY INCONSISTENCY BETWEEN THE COMMERCIALIZATION PLAN AND THIS AGREEMENT, THE
TERMS OF THIS AGREEMENT SHALL PREVAIL.

 

6.3          COMMERCIALIZATION ACTIVITIES.

 

(a)           United Therapeutics Obligations.  Except as otherwise provided
herein, United Therapeutics shall (i) use Commercially Reasonable Efforts to
Commercialize the Product in the Field in the Territory in accordance with the
Commercialization Plan and all Applicable Law, including adapting to market
dynamics and pursuing new opportunities; (ii) utilize Lilly’s call center in
coordination with United Therapeutics’ medical affairs department for providing
medical information services with respect to the Product in the Field in the
Territory to hospitals and/or customers and to respond to complaints, medical
questions, or other inquiries regarding the Product in the Field in the
Territory, at no cost to United Therapeutics; (iii) establish Phase IV
registries for patients receiving the Product for use in the Field in the
Territory, where such registries are required by Regulatory Authorities as a
condition for granting Regulatory Approval in the Field in the Territory; and
(iv) use Commercially Reasonable Efforts to perform other activities (other than
the Lilly Commercialization Activities described in Section 6.3(c)) not
otherwise accounted herein but which are required by Regulatory Authorities to
Commercialize the Product in any indication in the Field for which Regulatory
Approval has been obtained in the Territory (collectively, the “United
Therapeutics Commercialization Activities”).

 

(b)           Compensation for Sales Outside the Field.

 

(i)            If Lilly believes that there are material sales of the Product
outside the Field in the Territory, Lilly shall be permitted to implement and
conduct procedures under

 

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which material sales and purchases of the Product in the Territory and other
related market research data shall be audited and monitored, using for example
IMS Health and PDDA data and information, and United Therapeutics agrees to
cooperate with Lilly in the implementation and conduct of such procedures.  In
the event that such an audit and monitoring procedure determines that material
sales of the Product outside the Field in the Territory have been or are being
made by or for the benefit of United Therapeutics, the Parties will confer and,
in good faith, negotiate appropriate compensation to Lilly.  Notwithstanding
anything to the contrary, the remedy to Lilly set forth in the previous sentence
will not be the exclusive remedy available to Lilly under this
Section 6.3(b)(i).

 

(ii)           If United Therapeutics believes that there are material sales of
product containing the Compound in the Field in the Territory originating from
Lilly, United Therapeutics shall be permitted to implement and conduct
procedures under which material sales and purchases of the Product in the
Territory and other related market research data shall be audited and monitored,
using for example IMS Health and PDDA data and information, and Lilly agrees to
cooperate with United Therapeutics in the implementation and conduct of such
procedures.  In the event that such an audit and monitoring procedure determines
that material sales of product containing the Compound in the Field in the
Territory have been or are being made by or for the direct or indirect benefit
of Lilly, the Parties will confer and, in good faith, negotiate appropriate
compensation to United Therapeutics.  Notwithstanding anything to the contrary,
the remedy to United Therapeutics set forth in the previous sentence will not be
the exclusive remedy available to United Therapeutics under this
Section 6.3(b)(ii).

 

(c)           Lilly Obligations.  Lilly shall (i) supply the Product to United
Therapeutics pursuant to the Manufacturing and Supply Agreement; and (ii) use
Commercially Reasonable Efforts to provide the call center services referred to
in Section 6.3(a)(ii) (collectively, the “Lilly Commercialization Activities”).

 

6.4          COMMERCIALIZATION COSTS.  UNITED THERAPEUTICS SHALL BEAR ALL COSTS
AND EXPENSES INCURRED BY UNITED THERAPEUTICS IN CONNECTION WITH THE UNITED
THERAPEUTICS COMMERCIALIZATION ACTIVITIES.  LILLY HAS NO OBLIGATION TO CONDUCT
ANY COMMERCIALIZATION ACTIVITIES OTHER THAN THE LILLY COMMERCIALIZATION
ACTIVITIES SET FORTH IN SECTION 6.3(C).  IF LILLY AGREES TO CONDUCT ANY
COMMERCIALIZATION ACTIVITIES REQUESTED BY UNITED THERAPEUTICS OTHER THAN THE
LILLY COMMERCIALIZATION ACTIVITIES SET FORTH IN SECTION 6.3(C), UNITED
THERAPEUTICS SHALL REIMBURSE LILLY’S REASONABLE COSTS IN CONNECTION WITH SUCH
LILLY COMMERCIALIZATION ACTIVITIES IN ACCORDANCE WITH A BUDGET TO BE AGREED UPON
BY THE PARTIES.

 

6.5          ADVERTISING AND PROMOTIONAL MATERIALS.

 

(a)           United Therapeutics Promotional Materials.  United Therapeutics
will be responsible for development of all advertising and promotional
materials, programs and initiatives related to the use of the Product in the
Field in the Territory, including medical education, symposia, opinion leader
development, peer-to-peer development, publications, journal ads, and all other
written communications that describe the features or benefits of the Product, in
each case in the Field in the Territory (the “United Therapeutics Promotional
Materials”). All United Therapeutics Promotional Materials shall be prepared in
accordance with Applicable Law, United Therapeutics’ policies for compliance
with Applicable Law,

 

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industry guidelines relating to promotional and advertising materials, any
requirements of the FDA imposed as a condition of any Regulatory Approval,
industry marketing codes such as the PhRMA code, and implementation guidelines
to be mutually agreed upon by the Parties.  United Therapeutics shall implement
appropriate policies and procedures relating to safety reporting, approval of
United Therapeutics Promotional Materials, sales force training and similar
matters.  As a general principle, to the extent allowed by Applicable Law,
United Therapeutics shall have the right to include the Corporate Marks of
United Therapeutics in the United Therapeutics Promotional Materials, subject to
implementation guidelines to be agreed upon by the Parties.  As between Lilly
and United Therapeutics, United Therapeutics shall own all right, title, and
interest in and to any intellectual property in the United Therapeutics
Promotional Materials, excluding any Lilly Product Marks and any Lilly Corporate
Marks marked thereon.

 

(b)           United Therapeutics’ Compliance Policies.  United Therapeutics, on
Lilly’s request, shall provide Lilly copies of and access to United
Therapeutics’ policies for compliance with Applicable Law relating to
promotional and advertising materials, and United Therapeutics’ procedures
relating to the approval of promotional materials, sales force compliance
training, and related matters.  Lilly shall have the right to audit United
Therapeutics’ materials and procedures, no more than once per year, to ensure
that United Therapeutics has maintained and is maintaining appropriate policies
for compliance with Applicable Law relating to promotional and advertising
materials and implementation guidelines, and that United Therapeutics’
procedures relating to the approval of promotional materials, sales force
compliance training, and related matters comply with such policies.  In the
event that Lilly identifies any inconsistency or discrepancy between actual
practice and such policies and procedures, United Therapeutics, in good faith,
will act promptly to rectify any such inconsistency or discrepancy.  In the
event that United Therapeutics receives any material FDA warning letter or
similar regulatory action relating to its marketing of the Product, the Parties,
acting reasonably, shall institute a joint pre-approval process for United
Therapeutics Promotional Materials to ensure compliance with applicable
regulatory requirements.

 

(c)           Filing of Promotional Materials with Regulatory Authorities. 
United Therapeutics shall timely file with the relevant Regulatory Authority, in
accordance with all Applicable Law, all United Therapeutics Promotional
Materials required to be filed with such Regulatory Authority with respect to
use of the Product in the Field in the Territory.  Upon Lilly’s request, United
Therapeutics shall provide Lilly with copies of such filings and any material
correspondence with Regulatory Authorities.

 

6.6          UNITED THERAPEUTICS SALES REPRESENTATIVES.

 

(a)           United Therapeutics acknowledges and agrees that all United
Therapeutics Sales Representatives and other employees and agents are not, and
are not intended to be or be treated as, employees of Lilly or any of its
Affiliates, and that such individuals are not, and are not intended to be,
eligible to participate in any benefits programs or in any “employee benefit
plans”, as such term is defined in Section 1002(3) of the Employee Retirement
Income Security Act of 1974, as amended, that are sponsored by Lilly or any of
its Affiliates or that are offered from time to time by Lilly or its Affiliates
to their own employees.  United Therapeutics shall be solely responsible and
liable for the payment of all compensation and benefits under any such benefit
plans to such United Therapeutics Sales Representatives and other employees and
agents,

 

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even if it is subsequently determined by any court, the IRS or any other
governmental agency that such individual may be deemed a common law employee of
Lilly or any of its Affiliates.

 

(b)           Each Party agrees that neither it nor any of its Affiliates that
participates in or is responsible for the Development or Commercialization of
the Product pursuant to this Agreement, or, in the case of Lilly, for the
Development and Commercialization of products containing the Compound, shall
recruit, solicit, or induce any employee of the other Party to terminate his or
her employment with such other Party and become employed by or consult for such
Party or any of its Affiliates, whether or not such employee is a full-time
employee of the other Party, and whether or not such employment is pursuant to a
written agreement or is at-will.  For purposes of the foregoing, “recruit,”
“solicit” or “induce” shall not be deemed to include (i) circumstances where an
employee of a Party initiates contact with the other Party or any of its
Affiliates with regard to possible employment, or (ii) general solicitations of
employment not specifically targeted at employees of a Party or any of its
Affiliates, including responses to general advertisements.

 

6.7          COMPLAINTS AND INQUIRIES.  THE PARTIES SHALL MUTUALLY DEVELOP A
PROTOCOL, UNDER THE QUALITY AGREEMENT, FOR RESPONDING TO ANY AND ALL COMPLAINTS,
MEDICAL QUESTIONS, OR OTHER INQUIRIES RELATING TO THE PRODUCT IN THE FIELD IN
THE TERRITORY, WHICH ARE DIRECTED TO SUCH PARTIES’ RESPECTIVE SALES
REPRESENTATIVES.  ALL UNITED THERAPEUTICS SALES REPRESENTATIVES WILL BE
INSTRUCTED TO DIRECT COMPLAINTS, MEDICAL QUESTIONS, OR OTHER INQUIRIES REGARDING
APPROPRIATE USES OF THE PRODUCT IN THE FIELD IN THE TERRITORY TO THE CALL CENTER
ESTABLISHED PURSUANT TO SECTION 6.3(A)(II).  UNITED THERAPEUTICS SHALL BE
RESPONSIBLE FOR RESPONDING TO COMPLAINTS, MEDICAL QUESTIONS, OR OTHER INQUIRIES
RELATING TO THE UNITED THERAPEUTICS COMMERCIALIZATION ACTIVITIES AND LILLY SHALL
BE RESPONSIBLE FOR RESPONDING TO ALL OTHER COMPLAINTS, MEDICAL QUESTIONS, OR
OTHER INQUIRIES; PROVIDED, HOWEVER, THAT LILLY SHALL IN ANY EVENT INFORM UNITED
THERAPEUTICS OF ANY COMPLAINTS, MEDICAL QUESTIONS, OR OTHER INQUIRIES (OR ISSUES
RELATED THERETO) THAT WOULD MATERIALLY AFFECT UNITED THERAPEUTICS’ RIGHTS OR
OBLIGATIONS UNDER THIS AGREEMENT.  EACH PARTY SHALL NOTIFY THE OTHER PARTY OF,
AND PROVIDE ALL PERTINENT INFORMATION IN THE NOTIFYING PARTY’S POSSESSION
RELATING TO, ANY AND ALL SUSPECTED OR ACTUAL TAMPERING, COUNTERFEITING, OR
CONTAMINATION OR OTHER SIMILAR PROBLEMS WITH RESPECT TO THE PRODUCT IN THE FIELD
IN THE TERRITORY OR PRODUCTS CONTAINING THE COMPOUND IN THE  FIELD IN ANY
TERRITORY.

 

6.8          PRODUCT SELLING PRICES.  LILLY SHALL SET THE LIST PRICE FOR THE
PRODUCT FOR USE IN THE FIELD IN THE TERRITORY, AND SHALL BE RESPONSIBLE FOR ANY
CHANGES TO SUCH LIST PRICE; PROVIDED THAT THE LIST PRICE FOR THE [***] ([***])
MILLIGRAM DOSE OF THE PRODUCT WILL BE ON PARITY WITH, AND NOT, WHEN CONSIDERED
IN THE AGGREGATE, LESS THAN LILLY’S PRICING FOR THE [***] ([***]) MILLIGRAM DOSE
OF CIALIS® IN THE TERRITORY.  LILLY WILL PROVIDE UNITED THERAPEUTICS PRICING
PARAMETERS FOR THE  [***] ([***]) MILLIGRAM DOSE OF THE PRODUCT FOR USE IN THE
FIELD IN THE TERRITORY, INCLUDING A SCHEDULE OF PERMITTED DISCOUNTS AND REBATES,
AND NET EFFECTIVE SELLING PRICES, ALL OF WHICH SHALL BE ON PARITY WITH, AND NOT,
WHEN CONSIDERED IN THE AGGREGATE, LESS THAN LILLY’S PRICING PARAMETERS FOR THE
[***] ([***]) MILLIGRAM DOSE OF CIALIS® IN THE TERRITORY, AND SHALL UPDATE
AND/OR REVISE SUCH PARAMETERS AT LEAST ON AN ANNUAL BASIS, WHICH WILL REMAIN IN
EFFECT DURING THE PERIOD COVERED BY SUCH UPDATE AND/OR REVISION; PROVIDED THAT
UNITED THERAPEUTICS WILL CONTROL THE NDC NUMBER FOR THE PRODUCT AND SHALL BE
RESPONSIBLE FOR ANY AND ALL REPORTS REQUIRED TO BE SUBMITTED TO GOVERNMENT
AUTHORITIES UNDER APPLICABLE LAW.  LILLY SHALL CONSIDER IN GOOD FAITH ANY INPUT
PROVIDED BY UNITED THERAPEUTICS REGARDING THE LIST PRICE, AND SUCH PRICING
PARAMETERS, WITH

 

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RESPECT TO THE PRODUCT IN THE FIELD IN THE TERRITORY.  UNITED THERAPEUTICS SHALL
BE RESPONSIBLE FOR ADMINISTERING ITS OWN DISCOUNT AND REBATE SYSTEMS; PROVIDED
THAT SUCH SYSTEMS ARE CONSISTENT WITH THE SCHEDULE OF PERMITTED DISCOUNTS AND
REBATES PROVIDED TO UNITED THERAPEUTICS BY LILLY.  AT SUCH TIME THAT THERE
CEASES TO BE A VALID CLAIM COVERING THE COMMERCIALIZATION OF THE PRODUCT IN THE
FIELD IN THE TERRITORY AND THERE IS NO GOVERNMENT-CONFERRED EXCLUSIVITY
RESPECTING THE USE OF THE PRODUCT IN THE FIELD IN THE TERRITORY, THEN UNITED
THERAPEUTICS SHALL HAVE THE RIGHT TO SET THE PRICE AND PRICING PARAMETERS FOR A
GENERIC VERSION OF THE PRODUCT.

 

6.9          PRODUCT INTEGRITY.

 

(a)           The Parties acknowledge and agree that all Product supplied to
United Therapeutics under the Manufacturing and Supply Agreement is intended to
be sold to end-users under a separate Lilly brand name for use in the Field in
the Territory, and that Cialis® is intended to be sold to end-users under a
separate Lilly brand name for use outside the Field.

 

(b)           United Therapeutics agrees that it will Promote the Product to
healthcare professionals for use only in the Field in the Territory, and will
not promote the Product to urologists.  In the event that United Therapeutics
discovers that the Product is being distributed outside United Therapeutics’
Domain, United Therapeutics shall notify Lilly, and the provisions set forth in
Section 6.3(b)(i) shall apply.

 

(c)           Lilly agrees that it will not promote Cialis® to healthcare
professionals for use in the Field in the Territory.  In the event that Lilly
discovers that a product containing the Compound is being distributed outside
Lilly’s Domain, Lilly shall notify United Therapeutics, and the provisions set
forth in Section 6.3(b)(ii) shall apply.

 

(d)           United Therapeutics shall implement Lilly’s then-standard
anti-counterfeiting and field restriction practices, and cooperate fully with
Lilly by taking any and all reasonable steps recommended by Lilly, to protect
the safety of patients, maintain the loyalty of physician customers, preserve
value, and ensure that safe Product is available to patients seeking treatment
and appropriately handled for safe and effective treatment.  Lilly shall do the
same with respect to products containing the Compound in Lilly’s Domain.

 

6.10        LILLY COVENANT NOT TO COMPETE.  LILLY HEREBY COVENANTS AND AGREES,
AND SHALL CAUSE ITS AFFILIATES TO AGREE, NOT TO, IN WHOLE OR IN PART,
COMMERCIALIZE ANY COMPETITIVE PRODUCT IN THE FIELD IN THE TERRITORY DURING THE
TERM, DIRECTLY FOR THEMSELVES OR BY A THIRD PARTY, LICENSEE OR SUBLICENSEE.

 

ARTICLE 7

PAYMENT

 

7.1          UPFRONT PAYMENT.  IN CONSIDERATION FOR THE RIGHTS GRANTED TO UNITED
THERAPEUTICS UNDER THIS AGREEMENT, UNITED THERAPEUTICS, WITHIN TEN (10) DAYS
AFTER THE EFFECTIVE DATE, SHALL PAY TO LILLY A ONE-TIME-ONLY, NONREFUNDABLE,
NON-CREDITABLE PAYMENT OF TWENTY-FIVE MILLION DOLLARS ($25,000,000).

 

7.2          ROYALTY PAYMENTS.  IN CONSIDERATION FOR THE RIGHTS GRANTED TO
UNITED THERAPEUTICS UNDER THIS AGREEMENT AND THE SUPPLY OF THE PRODUCT UNDER THE
MANUFACTURING AND

 

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SUPPLY AGREEMENT, UNITED THERAPEUTICS SHALL PAY LILLY A ROYALTY IN AN AMOUNT
EQUAL TO FIVE PERCENT (5%) OF NET SALES.  IN THE EVENT UNITED THERAPEUTICS
RECEIVES ANY NON-MONETARY CONSIDERATION IN CONNECTION WITH THE SALE OF THE
PRODUCT, UNITED THERAPEUTICS’ PAYMENT OBLIGATION UNDER THIS SECTION 7.2 SHALL BE
BASED ON THE FAIR MARKET VALUE OF SUCH OTHER CONSIDERATION.  IN SUCH CASE,
UNITED THERAPEUTICS SHALL DISCLOSE TO LILLY THE TERMS OF ANY SUCH ARRANGEMENT,
AND THE PARTIES SHALL ENDEAVOR IN GOOD FAITH TO AGREE ON THE FAIR MARKET VALUE
OF THE CONSIDERATION RECEIVED BY UNITED THERAPEUTICS UNDER SUCH ARRANGEMENT. IF
LILLY’S OBLIGATION TO PAY ROYALTIES UNDER THE GLAXO ICOS LICENSE TERMINATES OR
IS REDUCED, THE OBLIGATION TO PAY ROYALTIES UNDER THIS AGREEMENT SHALL LIKEWISE
TERMINATE OR BE SO REDUCED.

 

7.3          PAYMENTS AND REPORTS.

 

(a)           United Therapeutics shall keep (and shall cause its Affiliates and
shall require its sublicensees to keep) complete and accurate books and records
that are necessary for Lilly to ascertain and verify the payments owed
hereunder.

 

(b)           United Therapeutics shall provide a report to Lilly within thirty
(30) days after the end of each Calendar Quarter that summarizes all Net Sales,
including, if applicable, the fair market value of all non-monetary
consideration received by United Therapeutics in exchange for the Product,
during such Calendar Quarter and contains detailed information regarding the
calculation of amounts due to Lilly pursuant to Section 7.2, including allowable
deductions in the calculation of Net Sales, in a manner sufficient to enable
Lilly to determine amounts due to Lilly under Section 7.2 (“Net Sales Report”). 
United Therapeutics will mail the Net Sales Report to the attention of:      . 
Contemporaneously with the delivery of each Net Sales Report, United
Therapeutics shall make all payments due to Lilly pursuant to Section 7.2 with
respect to the Calendar Quarter corresponding to such Net Sales Report by wire
transfer in immediately available funds in accordance with the terms of
Section 7.5.

 

(c)           Any payment required under this Agreement to be made to Lilly by
United Therapeutics shall be made to an Affiliate of Lilly if designated in
writing by Lilly as the appropriate recipient.  Any report required under this
Agreement to be made to Lilly by United Therapeutics shall be made by an
Affiliate of United Therapeutics if designated in writing by United Therapeutics
as the appropriate reporting entity.

 

7.4          TAXES.  THE PARTIES ACKNOWLEDGE AND AGREE THAT IT IS THEIR MUTUAL
OBJECTIVE AND INTENT TO MINIMIZE, TO THE EXTENT FEASIBLE, TAXES PAYABLE WITH
RESPECT TO THE PAYMENT UNDER SECTION 7.1 AND THAT THEY SHALL USE THEIR BEST
EFFORTS TO COOPERATE AND COORDINATE WITH EACH OTHER TO ACHIEVE SUCH OBJECTIVE. 
IF APPLICABLE LAW REQUIRES THAT TAXES BE DEDUCTED AND WITHHELD FROM SUCH
PAYMENT, INCLUDING TAXES IMPOSED ON UNITED THERAPEUTICS AS A RESULT OF MAKING
ANY PAYMENT TO AN AFFILIATE OF LILLY INSTEAD OF TO LILLY, UNITED THERAPEUTICS
SHALL (A) DEDUCT THOSE TAXES FROM THE PAYMENT; (B) PAY THE TAXES TO THE PROPER
TAXING AUTHORITY; AND (C) SEND EVIDENCE OF THE OBLIGATION TOGETHER WITH PROOF OF
PAYMENT TO LILLY WITHIN SIXTY (60) DAYS FOLLOWING THAT PAYMENT.

 

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7.5          WIRE TRANSFERS.  ALL PAYMENTS HEREUNDER SHALL BE MADE TO LILLY BY
BANK WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO LILLY IN ACCORDANCE WITH
THE WIRE INSTRUCTIONS SET FORTH IN EXHIBIT 7.5, WHICH MAY BE CHANGED BY WRITTEN
NOTICE TO UNITED THERAPEUTICS IN ACCORDANCE WITH SECTION 15.7.

 

7.6          AUDIT RIGHTS.

 

(a)           Royalty Reports and Royalties.  Lilly shall have the right to have
an independent certified public accountant selected by Lilly and approved by
United Therapeutics, such approval not to be unreasonably withheld, inspect the
books and records of United Therapeutics and Affiliates of United Therapeutics
for the purpose of determining the accuracy of (i) Net Sales Reports provided by
United Therapeutics to Lilly pursuant to Section 7.3(b), and (ii) royalties due
and paid by United Therapeutics to Lilly pursuant to Sections 7.2 and 7.3(b). 
Lilly may exercise such right (A) within the Term and during a period of one
(1) year after expiration or termination of this Agreement, but not more
frequently than once in any three (3) Calendar Year period, for any period up to
three (3) Calendar Years prior to such inspection, or (B) at any other time and
with respect to any period to the extent permitted under the Glaxo ICOS
License.  Notwithstanding the foregoing, in the event that Lilly is audited by
GlaxoSmithKline, Lilly shall have the right to audit United Therapeutics.  The
independent certified public accountants shall keep confidential any information
obtained during such inspection and shall report to United Therapeutics and
Lilly only the amounts of Net Sales and the amounts due and payable under the
terms of this Agreement.  If it is determined that additional amounts are owed
to Lilly during any period, United Therapeutics will pay Lilly the additional
amounts within thirty (30) days after the date the independent certified public
accountant’s written report is received by United Therapeutics, together with
any additional amount owed pursuant to Section 7.7.  If it is determined that
United Therapeutics has overpaid any amount during any period, the overpayment
shall be credited toward future royalty payments to be paid by United
Therapeutics pursuant hereto; provided, however, that, in the event no further
royalty payment shall become due, said overpayment shall be paid to United
Therapeutics within thirty (30) days after the date the independent certified
public accountant’s written report is received by United Therapeutics.  The fees
charged by such independent certified public accountant will be paid by Lilly
unless any additional amount owed to Lilly (excluding any amount owed pursuant
to Section 7.7) exceeds five percent (5%) of the amount paid for the annual
period subject to the audit, in which case United Therapeutics will pay the
reasonable fees of such independent certified public accountant.

 

(b)           Pricing Parameters and Reports.  Within the Term, Lilly shall have
a right, but not more frequently than once in any one (1) Calendar Year period,
to have an independent certified public accountant selected by Lilly and
approved by United Therapeutics, such approval not to be unreasonably withheld,
inspect the books and records of United Therapeutics and Affiliates of United
Therapeutics for the purpose of determining compliance with (i) the pricing
parameters provided by Lilly to United Therapeutics pursuant to Section 6.8, and
(ii) United Therapeutics’ obligations with respect to the submission of pricing
reports to Regulatory Authorities having responsibility for pricing matters,
including those Regulatory Authorities overseeing matters relating to Medicare
and Medicaid, pursuant to Section 5.3(c)(ii).  The independent certified public
accountants shall keep confidential any information obtained during such
inspection and shall report to United Therapeutics and Lilly only any

 

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non-compliance with such pricing parameters or United Therapeutics’ obligations
with respect to the submission of pricing reports to Regulatory Authorities
having responsibility for pricing matters.

 

(c)                                  Limitation.  In the event that Lilly has
conducted an inspection of the books and records of United Therapeutics or
Affiliates of United Therapeutics regarding royalty reports and royalties
pursuant to Section 7.6(a) and such inspection determines that additional
amounts were owed to Lilly in excess of five percent (5%) of the amount paid for
the (at least annual) period subject to inspection, Lilly, thereafter, may
inspect the books and records of United Therapeutics or Affiliates of United
Therapeutics annually, but not more frequently than once in any one (1) Calendar
Year period.  Notwithstanding anything to the contrary, once Lilly has conducted
an inspection with respect to any particular Calendar Year, whether pursuant to
Section 7.6(a) or to Section 7.6(b), Lilly may not re-inspect the books and
records of United Therapeutics or Affiliates of United Therapeutics regarding
such same particular Calendar Year.

 

7.7                               LATE PAYMENTS.  SUBJECT TO THE TERMS OF THIS
AGREEMENT, PAYMENTS NOT MADE TO LILLY WITHIN THE TIME PERIOD SET FORTH IN THIS
ARTICLE 7 SHALL BEAR INTEREST AT A RATE OF TWO PERCENT (2%) PER MONTH OR THE
HIGHEST RATE ALLOWED UNDER APPLICABLE LAW, WHICHEVER IS LOWER, UNTIL PAID IN
FULL.  THE PAYMENT OF SUCH INTEREST SHALL NOT LIMIT LILLY FROM EXERCISING ANY
OTHER RIGHTS IT MAY HAVE AS A CONSEQUENCE OF THE LATENESS OF ANY PAYMENT.

 

7.8                               PAYMENTS TO UNITED THERAPEUTICS.  PURSUANT TO
THE TERMS AND CONDITIONS OF SECTIONS 5.7(C) AND 5.7(E), LILLY WILL HAVE PAYMENT
OBLIGATIONS TO UNITED THERAPEUTICS RELATING TO THE SHARING AND REIMBURSEMENT OF
CERTAIN COSTS AND EXPENSES OF UNITED THERAPEUTICS.  AS A CONSEQUENCE, THE
PARTIES INTEND FOR UNITED THERAPEUTICS TO HAVE THE SAME RIGHTS WITH RESPECT OF
THE PAYMENTS OWED BY LILLY TO UNITED THERAPEUTICS AS LILLY HAS WITH RESPECT TO
THE PAYMENTS OWED BY UNITED THERAPEUTICS TO LILLY UNDER SECTIONS 7.3(A), 7.4,
7.5 AND 7.7, MUTATIS MUTANDIS, EXCEPT THAT THE WIRE INSTRUCTIONS TO UNITED
THERAPEUTICS SHALL BE AS SET FORTH IN EXHIBIT 7.8.

 

ARTICLE 8

INVENTIONS AND PATENTS

 

8.1                               INVENTIONS.

 

(a)                                  As between the Parties, Lilly shall own any
and all Inventions made solely by employees, agents, or independent contractors
of a Party, and any and all Inventions made jointly by employees, agents, or
independent contractors of each of Lilly and United Therapeutics, and United
Therapeutics shall, and hereby does, assign its interest therein to Lilly. 
United Therapeutics agrees to execute and deliver all documents reasonably
required to evidence or record such assignment, and appoints Lilly as its
attorney-in-fact to execute and deliver such documents if Lilly is unable, after
making reasonable inquiry, to obtain United Therapeutics’ assistance with
respect to any such document.  United Therapeutics shall, and shall cause its
Affiliates, sublicensees, independent contractors, employees, and agents to,
cooperate with Lilly and take all reasonable additional actions and execute such
agreements, instruments and documents as may be reasonably required to perfect
Lilly’s right, title and interest in and to Inventions.  United Therapeutics
shall also include provisions in its relevant agreements with Third Parties that
effect the intent of this Section 8.1.  Any and all such Inventions shall be
Lilly Know-How, and any Patents claiming such Inventions shall be Lilly Patents,
all subject to the

 

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terms of the licenses granted in this Agreement, and with respect to any
Inventions made solely or jointly by United Therapeutics, United Therapeutics
shall have a non-exclusive, perpetual, paid-up, worldwide, sublicenseable
(without regard to the other sublicensing terms of this Agreement),
non-exclusive right to use and exploit such Inventions for any purpose.

 

(b)                                  Disclosure of Inventions, and Information.
Each Party shall, at its own expense, promptly disclose to the JSC all
Inventions and Information generated or made or Controlled by such Party
relating to an Invention or to the Compound and/or the Product that are Useful
to the other Party in the other Party’s Domain, in each case in the manner
directed by the JSC.

 

8.2                               PATENT PROSECUTION.

 

(a)                                  New Patents.  As between the Parties, Lilly
shall be solely responsible for and shall use Commercially Reasonable Efforts to
prepare, file, prosecute, and maintain Patents for all Inventions in the Field
(including, for clarity, any assigned by United Therapeutics to Lilly pursuant
to Section 8.1(a)) (together, the “New Patents”), and all related interference
and opposition proceedings; provided, however, that Lilly may at any time
decline to undertake such preparation or filing, or to continue such prosecution
or maintenance, of a given Patent relating to an Invention.

 

(b)                                  Patent Expenses.  Lilly shall select
counsel (which may include Lilly’s in house counsel) for filing, prosecuting,
and maintaining Patents under this Section 8.2 and shall bear all expenses
incurred under this Section 8.2 in connection with Lilly Patents.

 

(c)                                  Existing Patents.  Lilly shall confer in
good faith with United Therapeutics regarding Lilly’s patent strategy for all
Patents that are included in the Lilly Patents in existence as of the Execution
Date (the “Existing Patents”).  Notwithstanding the foregoing, subject to
Section 8.2(e), as between the Parties, Lilly shall be solely responsible for
and shall use Commercially Reasonable Efforts to prepare, file, prosecute, and
maintain the Existing Patents and all related interference and opposition
proceedings (subject to any limitations imposed under any written agreements
with Third Parties existing as of the Execution Date relating to the Lilly
Patents), using counsel of Lilly’s choice; provided, however, that Lilly may at
any time decline to undertake or continue such prosecution or maintenance of a
given Existing Patent where undertaking such preparation or filing, or
continuing such prosecution or maintenance, is reasonably likely to materially
adversely affect Lilly’s Domain.

 

(d)                                  Communications Regarding Strategy for New
Patents.  Lilly shall confer in good faith with United Therapeutics regarding
Lilly’s patent strategy for the New Patents in the Territory.  With respect to
the prosecution of New Patents, Lilly’s patent counsel shall provide a copy of
official communications with any patent authority in the Territory regarding
such New Patents to United Therapeutics in sufficient time for United
Therapeutics to comment.  Any comments made by United Therapeutics shall be made
in good faith and shall be directed to protect optimally the Products from
generic competition in the Field in the Territory.  Lilly will act reasonably
and in good faith in considering the comments of United Therapeutics.

 

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(e)                                  Opt-In Right.  In the event Lilly declines
to undertake such preparation or filing, or to continue such prosecution or
maintenance, of a given New Patent in the Territory, Lilly shall promptly notify
United Therapeutics of such decision and United Therapeutics shall have the
right to take over and file, prosecute, and maintain such Lilly Patent at its
sole expense and discretion.  Lilly shall cooperate in any such transfer of
responsibilities and rights as necessary or prudent for the benefit of United
Therapeutics to prosecute and maintain the foregoing rights. Thereafter, United
Therapeutics shall have the right but not the obligation to prosecute or
maintain any such Lilly Patent, as the case may be, at its expense; provided
that United Therapeutics shall keep Lilly reasonably informed of the progress of
any such prosecution. Lilly shall have the right to review all such pending
applications and other proceedings and make recommendations to United
Therapeutics concerning them and their conduct, but the final decision with
respect thereto shall rest with United Therapeutics, provided that United
Therapeutics acts reasonably.  United Therapeutics shall grant Lilly a license
under such patent application or Patent issuing therefrom to the extent such a
license is Useful to Lilly in Lilly’s Domain.

 

(f)                                    Nondisclosure.  Lilly shall use
Commercially Reasonable Efforts to file New Patents pursuant to
Section 8.2(a) as soon as reasonably possible, and in any event before any oral,
written or electronic disclosure of the Inventions claimed therein by Lilly to
maintain the validity of patent applications filed outside of the Territory. 
United Therapeutics shall not make any disclosure of an Invention until Lilly
has filed a Patent covering such Invention.

 

8.3                               PEDIATRIC EXCLUSIVITY IN THE TERRITORY.  LILLY
SHALL HAVE THE RIGHT, BUT NOT AN OBLIGATION, TO APPLY FOR, OBTAIN AND MAINTAIN
ANY PEDIATRIC EXCLUSIVITY OR ANY OTHER GOVERNMENT-CONFERRED EXCLUSIVITY
AVAILABLE WITH RESPECT TO THE PRODUCT IN THE FIELD IN THE TERRITORY AND, AT ITS
DISCRETION, SHALL ACT WITH REASONABLE PROMPTNESS IN LIGHT OF THE STAGE OF
DEVELOPMENT OF THE PRODUCT TO APPLY FOR ANY SUCH GOVERNMENT-CONFERRED
EXCLUSIVITY SO LONG AS SUCH APPLICATION IS NOT REASONABLY LIKELY TO MATERIALLY
ADVERSELY AFFECT LILLY’S DOMAIN.  UNITED THERAPEUTICS SHALL COOPERATE REASONABLY
WITH LILLY IN MAKING SUCH FILINGS OR ACTIONS.  FOR THE PURPOSES OF THIS
SECTION 8.3, “PEDIATRIC EXCLUSIVITY” MEANS THE ADDITIONAL SIX (6) MONTHS OF
EXCLUSIVITY EXTENSION PROVIDED UNDER THE FOOD AND DRUG ADMINISTRATION
MODERNIZATION ACT OF 1997, SECTION 505A OF THE FEDERAL FOOD, DRUG AND COSMETIC
ACT (21 U.S.C. § 355(A)), OR ANY REPLACEMENT THERETO.  FOR PURPOSES OF
CLARIFICATION, HOWEVER, LILLY, IN ITS SOLE DISCRETION, SHALL HAVE THE RIGHT TO
SEEK ANY GOVERNMENT-CONFERRED EXCLUSIVITY AVAILABLE WITH RESPECT TO PRODUCTS
CONTAINING THE COMPOUND, WHETHER OR NOT SUCH EXCLUSIVITY IS BASED ON PAH.

 

8.4                               OTC RIGHTS; AUTHORIZED GENERIC IN THE
TERRITORY.

 

(a)                                  United Therapeutics will have no right
under the terms of this Agreement with respect to over-the-counter
Commercialization of Product.

 

(b)                                  Upon expiration of the Term, but not
earlier termination, at United Therapeutics’ request provided in writing to
Lilly not later than two (2) years prior to such time as the Product will be
available for generic manufacture and sale in the Field in the Territory under
Applicable Laws, United Therapeutics will have a right to be the exclusive
authorized branded generic manufacturer and/or seller of the Product in the
Field in the Territory and Lilly will grant, and hereby grants, to United
Therapeutics and United Therapeutics’ Affiliates an

 

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exclusive license to use and display the Lilly Product Marks in the Field in the
Territory, solely in connection with the Commercialization of the Product in the
Field in the Territory, subject to Sections 9.1, 9.4, 9.5, 9.6, 9.7 and 9.8. 
The effective date of such grant will be the date the Product is available for
generic manufacture and sale in the Field in the Territory under Applicable
Law.  During the Term or while United Therapeutics is the exclusive authorized
branded generic manufacturer and/or seller of the Product in the Field in the
Territory, United Therapeutics shall not have the right to sell any non-branded
generic version of the Product or Compound in the Field in the Territory.

 

8.5                               INFRINGEMENT DEFENSE.

 

(a)                                  Defense of Third Party Claims for Product
in the Territory.  If a Third Party asserts that a Patent owned or otherwise
controlled by it is infringed by the Development, manufacture, use or
Commercialization of the Product in the Territory, the Party first obtaining
knowledge of such a claim shall immediately provide the other Party notice of
such claim, along with the related facts in reasonable detail.  Lilly shall have
the right, but not the obligation, to control such defense with respect to the
Product, and United Therapeutics, at Lilly’s reasonable request and expense,
shall cooperate with Lilly with respect to any such defense.

 

(b)                                  Settlement of Third Party Claims for
Product.  Lilly shall control settlement of each and every defense of Third
Party claims with respect to the Product. Lilly shall keep United Therapeutics
advised of the status of such claim and the defense thereof.  If Lilly settles
the claim identified in Exhibit 10.2(k), Lilly will include exploitation of the
Product under the terms of this Agreement in such settlement on the same terms
that Lilly settles such claim in respect of the exploitation of the Product
outside the Territory, or if there are no such express terms, on the same terms
as applicable to products containing Compound in Lilly’s Domain.  United
Therapeutics shall bear the cost of such settlement payable to the
plaintiff(s) identified in Exhibit 10.2(k) as such cost applies to exploitation
of the Product in United Therapeutics’ Domain after the date of settlement. 
United Therapeutics shall have no right to be advised of the status of such
claim or the defense thereof and Lilly shall have no duty to consider any
comments of United Therapeutics with respect thereto.

 

8.6                               ENFORCEMENT OF PATENT RIGHTS.

 

(a)                                  If any Patent in the Lilly Patents is
allegedly or actually infringed by a Third Party by the Development,
manufacture, use or Commercialization of a product competitive with the Product
in the Territory, or if there are any allegations of alleged invalidity,
unenforceability, or non-infringement of any Patent in the Lilly Patents
pursuant to a Paragraph IV Patent Certification by a Third Party filing an
Abbreviated New Drug Application, an application under §505(b)(2), or other
similar patent certification by a Third Party, in either event in the Territory,
the Party first having knowledge of such infringement or allegation shall
promptly notify the other Party in writing.  The notice shall set forth the
facts known of such infringement or allegation in reasonable detail. The Parties
shall confer with each other in good faith regarding any such alleged or actual
infringement or application in the Territory.

 

(b)                                  Subject to Section 8.6(d), Lilly shall have
the exclusive right, but not the obligation, to institute, prosecute, and
control any action or proceeding with respect to such

 

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infringement or allegation anywhere in the world, including settlement of any
such action or proceeding, by counsel of its own choice.  United Therapeutics
agrees to be joined as a party plaintiff, if necessary or appropriate, and to
give Lilly reasonable assistance and authority to file and prosecute any such
action or proceeding.

 

(c)                                  If Lilly determines that it does not intend
to institute, prosecute, and control any action or proceeding with respect to
such infringement or allegation respecting a New Patent in the Territory, then
it shall promptly given written notice of such determination to United
Therapeutics with sufficient time for United Therapeutics to do so, including
settlement of any such action or proceeding, by counsel of its own choice. 
Lilly agrees to be joined as a party plaintiff, if necessary or appropriate, and
to give United Therapeutics commercially reasonable assistance and authority to
file and prosecute any such action or proceeding.

 

(d)                                  Neither Party shall agree to any settlement
of such action or proceeding with respect to such infringement or allegation of
a New Patent that would have a materially adverse effect on the other Party’s
Domain without the prior written consent of the other Party, which consent shall
not be unreasonably withheld.

 

(e)                                  Any damages or monetary award recovered
shall be applied first to reimburse the Reasonable Costs of the Party bringing
such action in connection with such litigation, with the balance being allocated
to the Parties in proportion that Party’s share of such costs.

 

(f)                                    Notwithstanding the foregoing, to the
extent any agreement existing as of the Execution Date between Lilly and a Third
Party regarding the licensing to Lilly of any Existing Patents provides for
enforcement rights in a manner inconsistent with or different from this
Section 8.6, such rights shall be enforced in the manner required by such
agreement to the extent they are inconsistent with or different from this
Section 8.6.

 

8.7                               ENFORCEMENT OF OTHER GOVERNMENT-CONFERRED
RIGHTS.  IF EITHER PARTY BECOMES AWARE OF ANY THIRD PARTY ACTIVITY IN THE
TERRITORY THAT IS IN VIOLATION OF GOVERNMENT-CONFERRED EXCLUSIVITY (E.G., AN
ORPHAN DRUG DESIGNATION, PATENT TERM EXTENSION AND/OR PEDIATRIC EXCLUSIVITY)
WITH RESPECT TO THE PRODUCT, THEN THAT PARTY SHALL GIVE PROMPT WRITTEN NOTICE TO
THE OTHER PARTY WITHIN FIVE (5) BUSINESS DAYS AFTER GAINING KNOWLEDGE OF SUCH
INFRINGEMENT OR VIOLATION.  LILLY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
INSTITUTE, PROSECUTE, AND CONTROL ANY ACTION OR PROCEEDING WITH RESPECT TO SUCH
GOVERNMENT-CONFERRED EXCLUSIVITY, INCLUDING SETTLEMENT OF ANY SUCH ACTION OR
PROCEEDING, BY COUNSEL OF ITS OWN CHOICE, UNLESS INSTITUTING SUCH ACTION OR
PROCEEDING IS REASONABLY LIKELY TO MATERIALLY ADVERSELY AFFECT LILLY’S DOMAIN. 
UNITED THERAPEUTICS AGREES TO BE JOINED AS A PARTY PLAINTIFF, IF NECESSARY OR
APPROPRIATE, AND TO GIVE LILLY REASONABLE ASSISTANCE AND AUTHORITY TO FILE AND
PROSECUTE ANY SUCH ACTION OR PROCEEDING. IF LILLY FAILS TO INSTITUTE, PROSECUTE,
AND CONTROL ANY ACTION OR PROCEEDING OR SETTLES ANY SUCH ACTION OR PROCEEDING
AND SUCH FAILURE OR SETTLEMENT HAS A MATERIALLY ADVERSE EFFECT ON UNITED
THERAPEUTICS’ DOMAIN, UNITED THERAPEUTICS SHALL HAVE THE OPTION REFERRED TO IN
SECTION 3.5.

 

8.8                               INFORMATION AND UPDATES.  LILLY RECOGNIZES
THAT UNITED THERAPEUTICS WILL HAVE A LEGITIMATE BUSINESS INTEREST IN OBTAINING
AND MAINTAINING PATENT PROTECTION WITH RESPECT TO THE PRODUCT IN THE FIELD IN
THE TERRITORY.  AS A RESULT, LILLY WILL TIMELY KEEP THE JSC INFORMED AS TO

 

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SUCH PATENT PROTECTION.  IN ADDITION, ON UNITED THERAPEUTICS REQUEST, LILLY WILL
PROVIDE UPDATES TO THE JSC REGARDING THE STATUS OF LILLY’S EFFORTS TO OBTAIN AND
MAINTAIN PATENT PROTECTION, AND OTHER PATENT-RELATED ACTIVITIES, WITH RESPECT TO
THE PRODUCT IN THE FIELD IN THE TERRITORY.

 

8.9                               NO CHALLENGES TO THE LILLY PATENTS.  UNITED
THERAPEUTICS SHALL NOT AND SHALL CAUSE ITS AFFILIATES NOT TO CHALLENGE IN A
COURT OF COMPETENT JURISDICTION OR IN ANY INTERFERENCE OR OPPOSITION PROCEEDING,
THE VALIDITY, SCOPE OR ENFORCEABILITY OF ANY PATENT INCLUDED IN THE LILLY
PATENTS.  IF A SUBLICENSEE OF UNITED THERAPEUTICS OR ITS AFFILIATE CHALLENGES IN
A COURT OF COMPETENT JURISDICTION OR IN ANY INTERFERENCE OR OPPOSITION
PROCEEDING, THE VALIDITY, SCOPE OR ENFORCEABILITY OF ANY PATENT INCLUDED IN THE
LILLY PATENTS, THEN UNITED THERAPEUTICS OR ITS AFFILIATE, AS APPLICABLE, SHALL,
UPON WRITTEN NOTICE FROM LILLY, TERMINATE SUCH SUBLICENSE.  UNITED THERAPEUTICS
AND EACH OF ITS AFFILIATES SHALL INCLUDE PROVISIONS IN ALL AGREEMENTS UNDER
WHICH A THIRD PARTY OBTAINS A LICENSE UNDER ANY PATENT INCLUDED IN THE LILLY
PATENTS PROVIDING THAT, IF THE SUBLICENSEE CHALLENGES IN A COURT OF COMPETENT
JURISDICTION OR IN ANY INTERFERENCE OR OPPOSITION PROCEEDING, THE VALIDITY,
SCOPE OR ENFORCEABILITY OF ANY PATENT INCLUDED IN THE LILLY PATENTS UNDER WHICH
THE SUBLICENSEE IS SUBLICENSED, THEN UNITED THERAPEUTICS MAY TERMINATE SUCH
SUBLICENSE AGREEMENT WITH SUCH SUBLICENSEE, AND UNITED THERAPEUTICS SHALL, UPON
REQUEST BY LILLY, ENFORCE SUCH RIGHT IF SUCH SUBLICENSEE BREACHES SUCH
RESTRICTION.

 

ARTICLE 9

TRADEMARK USAGE AND MAINTENANCE

 

9.1                               OWNERSHIP OF TRADEMARKS.  LILLY OR ITS
AFFILIATES SHALL EXCLUSIVELY OWN ALL LILLY PRODUCT MARKS AND SHALL BE
RESPONSIBLE FOR THE PROCUREMENT AND MAINTENANCE OF TRADEMARK REGISTRATIONS
THEREFOR AND SHALL BEAR ALL EXPENSES ATTRIBUTABLE THERETO.  EXCEPT FOR THE
LICENSE GRANTED IN SECTION 9.2, NOTHING HEREIN SHALL CREATE ANY RIGHTS OF UNITED
THERAPEUTICS IN AND TO THE LILLY PRODUCT MARKS OR THE LILLY CORPORATE MARKS. 
LILLY AGREES TO EXECUTE ANY REQUIRED DOCUMENTS, TO PROVIDE UPON UNITED
THERAPEUTICS’ REQUEST ANY REQUIRED RECORDS, AND OTHERWISE TO COOPERATE FULLY
WITH UNITED THERAPEUTICS AS MAY BE NECESSARY TO ACCOMPLISH THE RECORDATION OF
SUCH LICENSE FOR ANY JURISDICTION IN WHICH UNITED THERAPEUTICS SEEKS SUCH
RECORDATION, AND THE EXPENSES FOR RECORDATION WILL BE BORNE BY UNITED
THERAPEUTICS.  NOTHING HEREIN SHALL CREATE ANY RIGHTS OF LILLY IN AND TO THE
UNITED THERAPEUTICS CORPORATE MARKS. LILLY WILL NOT CHANGE THE SEPARATE LILLY
BRAND NAME FOR THE PRODUCT IN THE TERRITORY WITHOUT THE CONSENT OF UNITED
THERAPEUTICS, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD.

 

9.2                               LILLY PRODUCT MARKS LICENSE GRANT.  SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT, LILLY HEREBY GRANTS TO UNITED
THERAPEUTICS AND UNITED THERAPEUTICS’ AFFILIATES AN EXCLUSIVE LICENSE TO USE AND
DISPLAY THE LILLY PRODUCT MARKS DURING THE TERM IN THE FIELD IN THE TERRITORY,
SOLELY IN CONNECTION WITH THE COMMERCIALIZATION OF THE PRODUCT IN THE FIELD IN
THE TERRITORY, AS PROVIDED UNDER AND IN ACCORDANCE WITH THIS ARTICLE 9.  SOLELY
TO THE EXTENT REQUIRED BY APPLICABLE LAW, UNITED THERAPEUTICS SHALL HAVE THE
NON-EXCLUSIVE RIGHT USE AND DISPLAY THE LILLY CORPORATE MARKS.

 

9.3                               USE OF THE TRADEMARKS.  UNITED THERAPEUTICS
SHALL USE THE LILLY PRODUCT MARKS AND LILLY CORPORATE MARKS SOLELY AS PERMITTED
IN SECTION 9.2 AS PROVIDED IN THIS ARTICLE 9.

 

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9.4                               QUALITY CONTROL.

 

(a)                                  Each Party shall conduct its activities in
such a way so as not to jeopardize or compromise in any way the Lilly Product
Marks.  Neither Party shall use the Lilly Product Marks as all or part of any
corporate name, trade name, trademark, service mark, certification mark,
collective membership mark, domain name, or any other designation confusingly
similar to any other mark in any way that damages the Lilly Product Marks;
provided, however, that United Therapeutics shall be free to use the separate
Lilly brand name for the Product in the Territory in connection with its
exercise of the rights granted to it under this Agreement.

 

(b)                                  United Therapeutics acknowledges Lilly’s
sole ownership of the Lilly Product Marks and shall not take any action
inconsistent with such ownership.  If United Therapeutics or any of its
Affiliates challenges or, directly or indirectly, asserts any right, title or
interest in or to any of the Lilly Product Marks, or any registrations or
applications for registration thereof, or seeks to register any Lilly Product
Mark, then Lilly shall have the right to give written notice to United
Therapeutics of such conduct, and United Therapeutics shall immediately cease
such conduct.  United Therapeutics shall comply with Lilly’s reasonable
guidelines of general application regarding the manner of use of the Lilly
Product Marks and the Lilly Corporate Marks provided by Lilly from time to time
to maintain the goodwill and value of the Lilly Product Marks and the Lilly
Corporate Marks, to the extent that such guidelines are in line with Applicable
Law.

 

(c)                                  Upon Lilly’s request, United Therapeutics
shall provide Lilly with exemplars or representative samples of primary (as
reasonably agreed by the Parties) promotional materials and product labeling
containing any Lilly Product Mark, the Corporate Marks of Lilly (if and to the
extent, such materials are used in connection with the Product in the Field in
the Territory) prior to using or disseminating such materials, if such materials
are substantially different from the form and presentation already used with the
Product in the Field in the Territory.  Lilly shall have the right to make
reasonable objections to any such materials within five (5) Business Days after
Lilly’s receipt of such exemplars or samples on the grounds that the manner of
use of the Lilly Product Marks and the Lilly Corporate Marks therein will damage
the reputation for quality associated with the Lilly Product Marks or the Lilly
Corporate Marks.  United Therapeutic shall modify such promotional materials and
product labeling in accordance with such objections of Lilly.  This
Section 9.4(c) shall not apply to the Product, its packaging and labeling while
the Manufacturing and Supply Agreement is in effect.

 

9.5                               USE OF TRADEMARK DESIGNATIONS.  THE ™
DESIGNATION SHALL BE USED IN CONJUNCTION WITH EACH LILLY PRODUCT MARK AND EACH
LILLY CORPORATE MARK WITHIN THE TERRITORY UNTIL SUCH TIME AS REGISTRATIONS
ISSUE.  ONCE REGISTRATIONS ISSUE, THE ® DESIGNATION SHALL BE USED IN CONNECTION
WITH THE LILLY PRODUCT MARK AND EACH LILLY CORPORATE MARK.  AN APPROPRIATE
STATUTORY NOTICE OF TRADEMARK OWNERSHIP SHALL BE AFFIXED TO OR IMPRINTED ON ANY
MATERIAL WHEREVER THE LILLY PRODUCT MARKS OR LILLY CORPORATE MARKS ARE USED
(SUBJECT TO REASONABLE SIZE AND ARTISTIC CONSTRAINTS) IN SUBSTANTIALLY THE
FOLLOWING FORM (TAILORED TO REFLECT WHICH TRADEMARK IS BEING USED):
“{TRADEMARK}™” IS A TRADEMARK OWNED BY ELI LILLY AND COMPANY.”  LILLY’S
OWNERSHIP OF SUCH MARKS SHALL BE IDENTIFIED ON ALL MATERIALS ON WHICH THEY
APPEAR.  THE EXACT LANGUAGE FOR IDENTIFICATION OF OWNERSHIP SHALL BE IN
ACCORDANCE WITH IMPLEMENTATION GUIDELINES TO BE AGREED UPON BY THE PARTIES.

 

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9.6                               INFRINGEMENT OF LILLY PRODUCT MARKS.  IN THE
EVENT THAT EITHER PARTY BECOMES AWARE OF (A) ACTUAL INFRINGEMENT OF A LILLY
PRODUCT MARK IN THE TERRITORY; (B) A MARK OR NAME CONFUSINGLY SIMILAR TO A LILLY
PRODUCT MARK IN THE TERRITORY; OR (C) ANY UNFAIR TRADE PRACTICES, TRADE DRESS
IMITATION, PASSING OFF, OR LIKE OFFENSES IN THE TERRITORY THAT RELATE TO THE
LILLY PRODUCT MARKS IN THE TERRITORY, SUCH PARTY SHALL PROMPTLY SO NOTIFY THE
OTHER PARTY IN WRITING.  LILLY SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT
ITS SOLE COST AND EXPENSE, TO INITIATE, PROSECUTE, AND CONTROL AN INFRINGEMENT
ACTION OR FILE ANY OTHER APPROPRIATE ACTION OR CLAIM RELATED TO INFRINGEMENT OF
THE LILLY PRODUCT MARK OR ANY LILLY CORPORATE MARK AGAINST ANY THIRD PARTY IN
THE TERRITORY.  IF LILLY FAILS TO BRING AN SUCH INFRINGEMENT ACTION WITHIN A
PERIOD OF NINETY (90) DAYS AFTER DELIVERY OF THE NOTICE SET FORTH ABOVE, THEN
UNITED THERAPEUTICS SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE
COST AND EXPENSE, TO INITIATE, PROSECUTE, AND CONTROL AN INFRINGEMENT ACTION OR
FILE ANY OTHER APPROPRIATE ACTION OR CLAIM RELATED TO INFRINGEMENT OF THE LILLY
PRODUCT MARK AGAINST ANY THIRD PARTY.  IN EITHER EVENT, THE PARTY NOT BRINGING
ANY SUCH ACTION (I) SHALL HAVE THE RIGHT (AT ITS OWN EXPENSE) TO PARTICIPATE IN
SUCH ACTION AND TO BE REPRESENTED BY COUNSEL OF ITS OWN CHOICE, AND (II) AGREES,
AT THE REQUEST AND EXPENSE OF THE PARTY BRINGING SUCH ACTION, TO BE JOINED AS A
PARTY TO THE SUIT AND TO PROVIDE REASONABLE ASSISTANCE IN ANY SUCH ACTION.  THE
PARTY CONTROLLING SUCH ACTION SHALL TAKE ALL REASONABLE AND APPROPRIATE STEPS TO
PROTECT, DEFEND, AND MAINTAIN THE LILLY PRODUCT MARKS FOR USE BY THE PARTIES AND
SHALL HAVE THE RIGHT TO CONTROL SETTLEMENT OF SUCH ACTION; PROVIDED, HOWEVER,
THAT NO SETTLEMENT SHALL BE ENTERED INTO WITHOUT THE WRITTEN CONSENT OF THE
OTHER PARTY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

 

9.7                               COSTS.  ANY DAMAGES OR MONETARY AWARD
RECOVERED SHALL BE APPLIED FIRST TO REIMBURSE THE REASONABLE COSTS OF THE PARTY
BRINGING SUCH ACTION IN CONNECTION WITH SUCH LITIGATION, WITH THE BALANCE BEING
ALLOCATED TO THE PARTIES IN PROPORTION THAT PARTY’S SHARE OF SUCH COSTS.

 

9.8                               THIRD-PARTY TRADEMARK CLAIMS.  IF A CLAIM IS
BROUGHT BY A THIRD PARTY THAT USE OF ANY LILLY PRODUCT MARK OR LILLY CORPORATE
MARK INFRINGES SUCH THIRD PARTY’S TRADEMARKS, THE PARTY AGAINST WHICH THE ACTION
IS BROUGHT WILL GIVE PROMPT WRITTEN NOTICE TO THE OTHER PARTY OF SUCH CLAIM. 
LILLY SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO DEFEND OR SETTLE SUCH
CLAIM AND ANY RESULTING SUIT AT ITS EXPENSE AND SHALL INDEMNIFY UNITED
THERAPEUTICS AGAINST ANY RESULTING FINAL JUDGMENTS AND SETTLEMENTS; PROVIDED
THAT LILLY SHALL NOT SETTLE ANY CLAIM OR SUIT IN A MANNER THAT WOULD HAVE A
MATERIALLY ADVERSE EFFECT ON UNITED THERAPEUTICS’ DOMAIN WITHOUT OBTAINING
UNITED THERAPEUTICS’ PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD.

 

ARTICLE 10

REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

10.1                        REPRESENTATIONS, WARRANTIES AND COVENANTS.  EACH
PARTY REPRESENTS, WARRANTS AND COVENANTS TO THE OTHER PARTY THE FOLLOWING:

 

(a)                                  it is duly organized and validly existing
under the laws of its jurisdiction of incorporation or formation, and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof;

 

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(b)                                  it is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder, and the person
or persons executing this Agreement on its behalf has been duly authorized to do
so by all requisite corporate action;

 

(c)                                  this Agreement is legally binding upon it
and enforceable in accordance with its terms.  The execution, delivery, and
performance of this Agreement by it does not conflict with any agreement,
instrument, or understanding, oral or written, to which it is a Party or by
which it is bound, nor violate any material law or regulation of any court,
governmental body, or administrative or other agency having jurisdiction over
it;

 

(d)                                  it has not granted and will not during the
Term grant any right to any Third Party that would conflict with the rights
granted to the other Party hereunder.  It has (or will have at the time
performance is due) maintained and will maintain and keep in full force and
effect all agreements (including license agreements) and filings (including
patent filings) necessary to perform its obligations hereunder;

 

(e)                                  it shall comply and cause its employees and
consultants who will be undertaking any activities related to this Agreement or
the Product to comply, with all Applicable Laws respecting such activities; and

 

(f)                                    neither its name nor the name of any of
its employees or consultants who will be undertaking any activities related to
this Agreement or the Product are listed on the debarment list maintained by the
FDA pursuant to 21 U.S.C. Sections 335(a)  and Section 335(b) and published on
the internet at the following address (or any successor address):
http://www.fda.gov/ora/compliance_ref/debar/default.htm.  In the course of the
research, non-clinical development, Development of the Product prior to or
pursuant to this Agreement, it has not used, and during the Term will not use,
any employee or consultant that is debarred by any Regulatory Authority or, to
the best of its knowledge, is the subject of debarment proceedings by any
Regulatory Authority.  If it learns that its employee or consultant performing
on its behalf under this Agreement has been debarred by any Regulatory
Authority, or has become the subject of debarment proceedings by any Regulatory
Authority, it shall so promptly notify the other Party and shall prohibit such
employee or consultant from performing on its behalf under this Agreement.

 

10.2                        REPRESENTATIONS AND WARRANTIES OF LILLY.  LILLY
HEREBY REPRESENTS AND WARRANTS TO UNITED THERAPEUTICS THAT, AS OF THE EFFECTIVE
DATE:

 

(a)                                  Lilly has received no communication from a
Regulatory Authority to cause Lilly, acting reasonably, to expect the denial of
a Regulatory Approval for PAH for the Product in the Territory;

 

(b)                                  to Lilly’s knowledge, there are no FDA
“field alerts” (or the equivalent in countries outside the United States)
pending with respect to the Product;

 

(c)                                  Lilly is and was, at all times prior to the
Effective Date, the lawful holder of all rights under the Regulatory Approvals
and the Regulatory Filings for the Product in the Field in the Territory in
existence as of the Effective Date;

 

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(d)                                  to Lilly’s knowledge, Lilly has complied in
all material respects with all Applicable Laws in connection with the
preparation and submission to the relevant Regulatory Authorities of the
Regulatory Approvals and the Regulatory Filings for the Product in the Field in
the Territory in existence as of the Effective Date;

 

(e)                                  nothing has come to the attention of Lilly
which has, or reasonably should have, led Lilly to believe that either of the
Regulatory Approvals or the Regulatory Filings for the Product in the Field in
the Territory in existence as of the Effective Date are not in good standing
with relevant Regulatory Authorities;

 

(f)                                    to Lilly’s knowledge, Lilly has filed
with the relevant Regulatory Authorities all required notices, amendments and
annual or other reports, including Adverse Event reports, with respect to the
Regulatory Approvals and the Regulatory Filings for the Product in the Field in
the Territory in existence as of the Effective Date;

 

(g)                                 to Lilly’s knowledge, there is no pending
action by relevant Regulatory Authorities in respect of the Regulatory Approvals
or the Regulatory Filings for the Product in the Field in the Territory in
existence as of the Effective Date;

 

(h)                                 neither Lilly nor any of its Affiliates has
granted any licenses to, agreed not to sue, or otherwise authorized, any person
or entity, under the Lilly Patents, Lilly Know-How or Lilly Product Marks to
Develop or Commercialize the Product in the Field in the Territory;

 

(i)                                    Lilly has granted United Therapeutics a
license as of the Effective Date, and a covenant not to sue thereafter, to all
intellectual property rights that Lilly Controls that are necessary to Develop
or Commercialize the Product in the Field in the Territory, each subject to and
in accordance with the terms and conditions of this Agreement;

 

(j)                                  except as set forth in Exhibit 10.2(j),
Lilly and/or its Affiliates own all right, title and interest in and to the
Lilly Patents, Lilly Know-How and Lilly Trademarks free and clear of all
encumbrances, security interests, options and licenses, and to the extent that
the same is owned by one or more of such Affiliates, Lilly shall cause such
Affiliates to grant a license and a covenant not to sue to United Therapeutics
and its Affiliates and Sublicensees on the terms set out in this Agreement as if
such Affiliates were Lilly hereunder;

 

(k)                                except as set forth in Exhibit 10.2(k), Lilly
is not aware of any claims, actions, suits or proceedings that are pending or
threatened, challenging Lilly’s rights to the Product in the Field in the
Territory in the Lilly Patents, Lilly Know-How or Lilly Product Marks;

 

(l)                                    except in connection with Lilly’s
anti-counterfeiting efforts, Lilly has not given any notice to any Third Party
asserting infringement by such Third Party with respect to the Product in the
Field in the Territory of any of the Lilly Patents, the Lilly Know-How or the
Lilly Product Marks, and Lilly is not aware of any such infringements;

 

(m)                            to Lilly’s knowledge, there is no claim, action,
suit, or proceeding, pending or threatened by a Third Party alleging that the
Development or Commercialization of

 

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the Product in the Field in the Territory infringes or misappropriates any
patents or other intellectual property rights of any Third Party;

 

(n)                                 to Lilly’s knowledge, the manufacture of the
Product in the Territory and the Development, Commercialization and use of the
Product in the Field in the Territory does not infringe or misappropriate any
patents or other intellectual property rights of any Third Party;

 

(o)                                  Lilly is not aware of any inventors of
Lilly Patents other than those listed as inventors on applications filed for
such Lilly Patents, and, to Lilly’s knowledge, all inventors listed on Lilly
Patents have assigned all their rights and interest therein to Lilly or, with
respect to any Lilly Patents licensed by Lilly from any Third Party, to such
Third Party;

 

(p)                                  Lilly is not aware of:

 

(I)                                    ANY FACTS THAT LILLY BELIEVES WOULD
RESULT IN INVALIDITY OR UNENFORCEABILITY OF THE LILLY PATENTS OR LILLY
TRADEMARKS;

 

(ii)                                except as set forth on Exhibit 10.2(p)(ii),
any person (other than persons identified as inventors of inventions disclosed
in the Lilly Patents) who claims to be an inventor of an invention disclosed in
the Lilly Patents;

 

(III)                            ANY CLAIM, ACTION, SUIT, OR PROCEEDING, PENDING
OR, TO LILLY’S KNOWLEDGE, THREATENED, THAT ANY OF THE LILLY PATENTS IS INVALID
OR UNENFORCEABLE; AND

 

(IV)                               THE ABANDONMENT, DISCLAIMER (OTHER THAN WITH
RESPECT TO TERMINAL DISCLAIMERS) OR EXPIRATION OF ANY OF THE LILLY PATENTS DUE
TO FAILURE TO TIMELY PAY APPLICABLE MAINTENANCE AND RENEWAL FEES;

 

(q)                                  no patent application within the Lilly
Patents is the subject of any pending interference, opposition, cancellation,
protest, or other challenge or adversarial proceeding in the Territory;

 

(r)                                  to Lilly’s knowledge, Lilly has responded
in good faith to all inquiries of United Therapeutics for information relating
to all toxicology studies, clinical data, manufacturing process data and other
information in its possession or control with respect to the Product in the
Field in the Territory that is material and would be reportable to the FDA under
21 C.F.R. 200 et. seq., and has not withheld any such information that would
have a materially adverse effect on the Development or Commercialization of the
Product in the Field in the Territory; and

 

(s)                                  Lilly or an Affiliate of Lilly is the
assignee by express assignment or operation of law of the Glaxo ICOS License.
The Glaxo ICOS License is in full force and effect as of the Effective Date and
that to the best of Lilly’s knowledge, no party thereto is in material breach or
default of the Glaxo ICOS License.  Lilly has not received any notice of
termination from Glaxo Group Limited or SmithKline Beecham Corporation under the
Glaxo ICOS License.  Lilly shall take all reasonable steps to comply with all
material terms and provisions contained in the Glaxo ICOS License.  Lilly shall
continue to be responsible for its financial obligations to Glaxo Group Limited
and SmithKline Beecham Corporation as set forth in the Glaxo ICOS

 

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License.  In the event Lilly receives notice of an alleged material breach or
default by Lilly of the Glaxo ICOS License, Lilly shall promptly so notify
United Therapeutics.  If United Therapeutics has caused such material breach or
default, United Therapeutics shall cure any such material breach or default.  If
Lilly has caused such material breach or default, Lilly fails to cure such
material breach or default reasonably in advance of the expiration of the cure
period thereunder, and such material breach or default is capable of being cured
by United Therapeutics, United Therapeutics may cure such material breach or
default, and United Therapeutics shall be entitled to recover the cost of such
cure from Lilly.

 

10.3                        COVENANT OF UNITED THERAPEUTICS.  UNITED
THERAPEUTICS COVENANTS THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT
WILL NOT CONDUCT, EITHER DIRECTLY OR INDIRECTLY, ANY RESEARCH, NON-CLINICAL OR
CLINICAL DEVELOPMENT ACTIVITIES WITH RESPECT TO THE PRODUCT.

 

10.4                        DISCLAIMER.  UNITED THERAPEUTICS UNDERSTANDS THAT
THE PRODUCT FOR USE IN THE FIELD IN THE TERRITORY IS THE SUBJECT OF ONGOING
CLINICAL RESEARCH AND DEVELOPMENT AND THAT LILLY CANNOT ENSURE THE SAFETY OR
USEFULNESS OF PRODUCT FOR USE IN THE FIELD IN THE TERRITORY.  LILLY MAKES NO
REPRESENTATION OR WARRANTY EXCEPT AS SET FORTH IN THIS ARTICLE 10 CONCERNING ITS
PATENTS OR INFORMATION, INCLUDING THE VALIDITY OR SCOPE OF ITS PATENTS OR THAT
THE MANUFACTURE, USE, SALE, OFFER FOR SALE, OR IMPORTATION OF PRODUCT WILL NOT
INFRINGE THE PATENTS OF THIRD PARTIES.  LILLY MAKES NO WARRANTY OF ANY PRODUCT’S
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

ARTICLE 11
CONFIDENTIALITY

 

11.1                        TREATMENT OF CONFIDENTIAL INFORMATION.  EXCEPT AS
PROVIDED BELOW, THE PARTIES AGREE THAT DURING THE TERM, AND FOR A PERIOD OF
EIGHT (8) YEARS THEREAFTER, EACH PARTY (THE “RECEIVING PARTY”) SHALL
(A) MAINTAIN CONFIDENTIAL INFORMATION OF THE OTHER PARTY (THE “DISCLOSING
PARTY”) IN CONFIDENCE TO THE SAME EXTENT AND WITH THE SAME DEGREE OF CARE AS THE
RECEIVING PARTY MAINTAINS ITS OWN PROPRIETARY INDUSTRIAL INFORMATION OF SIMILAR
KIND AND VALUE (BUT AT A MINIMUM EACH PARTY SHALL USE COMMERCIALLY REASONABLE
EFFORTS), (B) NOT DISCLOSE SUCH CONFIDENTIAL INFORMATION TO ANY THIRD PARTY
WITHOUT PRIOR WRITTEN CONSENT OF THE DISCLOSING PARTY, EXCEPT FOR DISCLOSURES
MADE IN CONFIDENCE TO ANY THIRD PARTY THAT ARE EXPLICITLY PERMITTED BY THE
COMMERCIALIZATION PLAN OR APPROVED BY THE JSC, AND (C) NOT USE SUCH CONFIDENTIAL
INFORMATION FOR ANY PURPOSE EXCEPT THOSE PERMITTED BY THIS AGREEMENT OR THE
MANUFACTURING AND SUPPLY AGREEMENT.

 

11.2                        EXCEPTIONS.  NOTWITHSTANDING THE FOREGOING, THE
RECEIVING PARTY SHALL HAVE NO SUCH CONFIDENTIALITY OBLIGATIONS WITH RESPECT TO
ANY PORTION OF THE CONFIDENTIAL INFORMATION OF THE DISCLOSING PARTY THAT:

 

(a)                                  at the time of disclosure by the Disclosing
Party to the Receiving Party, was generally available to the public, or after
such disclosure, becomes generally available to the public through no fault
attributable to the Receiving Party; or

 

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(b)                                  was known to the Receiving Party, without
obligation to keep it confidential, prior to when it was received from the
Disclosing Party; or

 

(c)                                  is subsequently disclosed to the Receiving
Party, without obligation to keep it confidential, by a Third Party lawfully in
possession thereof and having the right to so disclose; or

 

(d)                                  has been independently developed by
employees of the Receiving Party, as demonstrated by the Receiving Party by
competent written proof, who do not have access to or knowledge of such
Confidential Information.

 

11.3                        AUTHORIZED DISCLOSURES.  NOTHING IN THIS AGREEMENT
SHALL PROHIBIT THE RECEIVING PARTY FROM DISCLOSING CONFIDENTIAL INFORMATION OF
THE OTHER PARTY, AS WELL AS THE TERMS AND CONDITIONS OF THIS AGREEMENT:

 

(a)                                  to the Receiving Party’s Affiliates,
employees, agents, consultants, contractors, and distributors, and to the
employees, agents, consultants, contractors, and distributors of the receiving
Party’s Affiliates, who have a need to know such Confidential Information to
assist the receiving Party with the activities contemplated or required of it by
this Agreement and who are subject to obligations of confidentiality and non-use
with respect to such Confidential Information substantially similar to the
obligations of confidentiality and non-use of the receiving Party pursuant to
Section 11.1; provided that the term of such obligations may be reduced so as to
be commercially reasonable based on the circumstances; and provided further that
each Party shall each remain responsible for any failure by its Affiliates, and
its and its Affiliates’ employees, agents, consultants, contractors, and
distributors, to treat such Confidential Information as required under this
Section 11.3;

 

(b)                                  to professional advisors bound by a duty of
confidentiality;

 

(c)                                  to Receiving Party’s investors and
potential investors, acquirers, or merger candidates bound by a duty of
confidentiality;

 

(d)                                  to Receiving Party’s clinical investigators
and sublicensees and potential clinical investigators and potential sublicensees
bound by a duty of confidentiality; or

 

(e)                                  to the extent required by court order or
Applicable Law, provided that the Receiving Party provides the other Party prior
written notice of the required disclosure and takes reasonable steps to limit
such disclosure to the minimum required amount and to obtain, or cooperate with
the other Party in obtaining, a protective order or other similar order
requiring that such Confidential Information be used only for the purposes
required by such court order, law, or regulation.

 

Notwithstanding the foregoing, either Party may disclose without any limitation
such Party’s U.S. federal income tax treatment and the U.S. federal income tax
structure of the transactions relating to such Party that are based on or
derived from this Agreement, as well as all materials of any kind (including
opinions or other tax analyses) relating to such tax treatment or tax structure,
except to the extent that nondisclosure of such matters is reasonably necessary
in order for a Party to comply with Applicable Law.

 

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11.4                        SECURITIES FILINGS.  SUBJECT TO THE SECURITIES ACT
OF 1933, AS AMENDED, THE EXCHANGE ACT, OR ANY OTHER APPLICABLE SECURITIES LAW:
(A) IF EITHER PARTY PROPOSES TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES REGULATORS OF ANY STATE OR OTHER JURISDICTION A REGISTRATION
STATEMENT OR ANY OTHER DISCLOSURE DOCUMENT WHICH DESCRIBES THIS AGREEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, THE EXCHANGE ACT, OR ANY OTHER
APPLICABLE SECURITIES LAW, SUCH PARTY SHALL NOTIFY THE OTHER PARTY OF SUCH
INTENTION AND SHALL PROVIDE, TO THE EXTENT PRACTICABLE, SUCH OTHER PARTY WITH A
COPY OF RELEVANT PORTIONS OF THE PROPOSED FILING REASONABLY PRIOR TO SUCH FILING
(AND ANY REVISIONS TO SUCH PORTIONS OF THE PROPOSED FILING A REASONABLE TIME
PRIOR TO THE FILING THEREOF), INCLUDING ANY EXHIBITS THERETO; AND (B) EACH PARTY
SHALL HAVE A RIGHT TO PROVIDE COMMENTS IN A TIMELY MANNER ON ANY PORTION OF ANY
SUCH PROPOSED FILING OF THE OTHER PARTY THAT DESCRIBES THIS AGREEMENT PRIOR TO
THE FILING THEREOF.

 

11.5                        PUBLICITY.  THE PARTIES AGREE THAT THE JOINT PUBLIC
ANNOUNCEMENT OF THE EXECUTION OF THIS AGREEMENT SHALL BE SUBSTANTIALLY IN THE
FORM OF THE PRESS RELEASE ATTACHED AS EXHIBIT 11.5 AND THEY SHALL COOPERATE IN
THE ISSUANCE THEREOF AS SOON AS PRACTICABLE AFTER THE EXECUTION OF THIS
AGREEMENT UNLESS THEY AGREE OTHERWISE.  IN ADDITION, THE PARTIES RECOGNIZE THAT
EACH PARTY MAY FROM TIME TO TIME DESIRE TO ISSUE ADDITIONAL PRESS RELEASES AND
MAKE OTHER PUBLIC STATEMENTS OR DISCLOSURES REGARDING THE SUBJECT MATTER OF THIS
AGREEMENT. SUCH PUBLICATION SHALL BE PERMITTED WITHOUT THE OTHER PARTY’S CONSENT
TO THE EXTENT THAT SUCH ADDITIONAL RELEASES OR STATEMENTS THAT DO NOT CONTAIN
INFORMATION BEYOND THAT WHICH IS INCLUDED IN THE PRESS RELEASE ATTACHED AS
EXHIBIT 11.5 OR IN SUBSEQUENT PRESS RELEASES APPROVED BY BOTH PARTIES, OR ARE
NOT REASONABLY LIKELY TO HAVE A MATERIALLY ADVERSE EFFECT ON THE OTHER PARTY’S
REPUTATION OR DOMAIN.  ANY OTHER PUBLICATION, NEWS RELEASE OR OTHER PUBLIC
ANNOUNCEMENT RELATING TO THIS AGREEMENT OR TO THE PERFORMANCE HEREUNDER SHALL
FIRST BE REVIEWED AND APPROVED BY BOTH PARTIES, WHICH APPROVAL SHALL NOT BE
UNREASONABLY WITHHELD.  NOTWITHSTANDING ANYTHING ELSE IN THIS ARTICLE 11, ANY
DISCLOSURE WHICH IS REQUIRED BY LAW OR THE RULES OF A SECURITIES EXCHANGE, AS
ADVISED BY THE DISCLOSING PARTY’S COUNSEL, MAY BE MADE WITHOUT THE PRIOR CONSENT
OF THE OTHER PARTY, ALTHOUGH THE OTHER PARTY SHALL BE GIVEN PROMPT WRITTEN
NOTICE OF ANY SUCH LEGALLY REQUIRED DISCLOSURE AND TO THE EXTENT PRACTICABLE
SHALL PROVIDE THE OTHER PARTY AN OPPORTUNITY TO COMMENT ON THE PROPOSED
DISCLOSURE.

 

11.6                        PUBLICATION.

 

(a)                                  Each Party agrees that it shall not publish
or present to the public the results of any non-clinical scientific studies or
clinical trials related to the Product in the Field without the opportunity for
prior review by the other Party.  If a Party (the “Publishing Party”) wishes to
publish or to present to the public such results, then it shall provide the
other Party (the “Non-Publishing Party”) the opportunity to review any of the
Publishing Party’s proposed abstracts, manuscripts or presentations (including
verbal presentations) regarding the Product at least thirty (30) days prior to
the intended date of submission for publication. United Therapeutics agrees,
upon Lilly’s request, not to submit any such abstract or manuscript for
publication until Lilly is given a reasonable period of time to secure patent
protection for any material in such publication which Lilly believes to be
patentable.  Both Parties understand that a reasonable commercial or regulatory
strategy may require delay of publication of information.  Neither Party shall
have the right to publish or present to the public Confidential Information of
the other Party, except as permitted under Sections 11.2 and 11.3.

 

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(b)                                  It is understood that a Detail of the
Product in the Field in the Territory shall not be considered to be publication
or presentation to the public and shall therefore not be subject to the
requirements of Section 11.6(a).

 

11.7                        PATIENT INFORMATION.  THE PARTIES SHALL ABIDE BY
APPLICABLE LAWS CONCERNING THE CONFIDENTIALITY OR PROTECTION OF PATIENT
IDENTIFIABLE INFORMATION AND/OR PATIENTS’ PROTECTED HEALTH INFORMATION, AS
DEFINED BY U.S. C.F.R. PART 160 OR PERSONAL DATA AS DEFINED BY EU DIRECTIVE
95/46/EC OR ANY OTHER APPLICABLE LEGISLATION, IN THE COURSE OF THEIR PERFORMANCE
UNDER THIS AGREEMENT.

 

11.8                        CONFIDENTIALITY AGREEMENT.  DISCLOSURES OF
INFORMATION MADE BY THE PARTIES PURSUANT TO THE CONFIDENTIALITY AGREEMENT ARE
DEEMED TO HAVE BEEN MADE PURSUANT TO THIS AGREEMENT AND SUBJECT TO THIS ARTICLE
11.  THE CONFIDENTIALITY AGREEMENT IS HEREBY TERMINATED AS OF THE EFFECTIVE DATE
AND OF NO FURTHER FORCE OR EFFECT, EXCEPT WITH RESPECT TO ANY BREACH OF THE
CONFIDENTIALITY AGREEMENT PRIOR TO THE EFFECTIVE DATE.

 

ARTICLE 12
INDEMNIFICATION

 

12.1                        INDEMNIFICATION BY UNITED THERAPEUTICS.  SUBJECT TO
SECTION 12.3, UNITED THERAPEUTICS AGREES TO DEFEND ANY AND ALL LILLY INDEMNITEES
AT UNITED THERAPEUTICS’ COST AND EXPENSE, AND SHALL INDEMNIFY AND HOLD HARMLESS
THE LILLY INDEMNITEES FROM AND AGAINST ANY LIABILITIES, LOSSES, COSTS, DAMAGES,
FEES, OR EXPENSES (INCLUDING REASONABLE LEGAL EXPENSES AND ATTORNEYS’ FEES
INCURRED BY THE LILLY INDEMNITEES UNTIL SUCH TIME AS UNITED THERAPEUTICS HAS
ACKNOWLEDGED AND ASSUMED ITS INDEMNIFICATION OBLIGATION HEREUNDER WITH RESPECT
TO A CLAIM) PAYABLE TO A THIRD PARTY (COLLECTIVELY, “LOSSES”) ARISING OUT OF ANY
CLAIM, ACTION, LAWSUIT, OR OTHER PROCEEDING (COLLECTIVELY, “CLAIMS”) BROUGHT
AGAINST ANY LILLY INDEMNITEE BY A THIRD PARTY TO THE EXTENT RESULTING DIRECTLY
OR INDIRECTLY FROM:

 

(A)                                  THE DEVELOPMENT, MANUFACTURE, USE, OR
COMMERCIALIZATION OF THE PRODUCT BY ANY AND ALL UNITED THERAPEUTICS INDEMNITEES;

 

(B)                                  ANY AND ALL RECALLS OF THE PRODUCT IN THE
FIELD IN THE TERRITORY REQUIRED DUE TO THE ACTIVITIES OF THE UNITED THERAPEUTICS
INDEMNITEES WITH RESPECT TO UNITED THERAPEUTICS’ DEVELOPMENT, MANUFACTURE, USE,
OR COMMERCIALIZATION OF THE PRODUCT;

 

(C)                                  THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
UNITED THERAPEUTICS INDEMNITEES;

 

(D)                                  ANY MATERIAL BREACH BY UNITED THERAPEUTICS
OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS PURSUANT TO
THIS AGREEMENT OR THE MANUFACTURING AND SUPPLY AGREEMENT; OR

 

(E)                                  ANY VIOLATION OF APPLICABLE LAW BY THE
UNITED THERAPEUTICS INDEMNITEES;

 

EXCEPT TO THE EXTENT SUCH LOSSES RESULT FROM ACTIVITIES FOR WHICH LILLY MUST
INDEMNIFY THE UNITED THERAPEUTICS INDEMNITEES PURSUANT TO SECTION 12.2.

 

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12.2                        INDEMNIFICATION BY LILLY.  SUBJECT TO SECTION 12.3,
LILLY AGREES TO DEFEND THE UNITED THERAPEUTICS INDEMNITEES, AT LILLY’S COST AND
EXPENSE, AND SHALL INDEMNIFY AND HOLD HARMLESS THE UNITED THERAPEUTICS
INDEMNITEES FROM AND AGAINST ANY LOSSES ARISING OUT OF ANY CLAIMS BROUGHT
AGAINST ANY UNITED THERAPEUTICS INDEMNITEE BY A THIRD PARTY TO THE EXTENT
RESULTING DIRECTLY OR INDIRECTLY FROM:

 

(A)                                  THE RESEARCH, NON-CLINICAL DEVELOPMENT,
DEVELOPMENT, MANUFACTURE, USE OR COMMERCIALIZATION OF THE PRODUCT OR THE
COMPOUND BY THE LILLY INDEMNITEES,

 

(B)                                  ANY AND ALL RECALLS OF THE PRODUCT IN THE
FIELD IN THE TERRITORY REQUIRED DUE TO THE ACTIVITIES OF THE LILLY INDEMNITEES
WITH RESPECT TO LILLY’S RESEARCH, NON-CLINICAL DEVELOPMENT, DEVELOPMENT,
MANUFACTURE, USE OR COMMERCIALIZATION OF THE PRODUCT OR THE COMPOUND;

 

(C)                                  THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
LILLY INDEMNITEES;

 

(D)                                  ANY MATERIAL BREACH BY LILLY OF ANY OF ITS
REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS PURSUANT TO THIS AGREEMENT
OR THE MANUFACTURING AND SUPPLY AGREEMENT; OR

 

(E)                                  ANY VIOLATION OF APPLICABLE LAW BY THE
LILLY INDEMNITEES;

 

except to the extent such Losses result from activities for which United
Therapeutics must indemnify Lilly pursuant to Section 12.1.

 

12.3                        PROCEDURE.

 

(a)                                  A Party believing that it is entitled to
indemnification under Section 12.1 or Section 12.2 (an “Indemnified Party”)
shall give prompt written notification to the other Party (the “Indemnifying
Party”) of the commencement of any Claim for which indemnification may be sought
or, if earlier, upon the assertion of any such Claim by a Third Party (it being
understood and agreed, however, that the failure by an Indemnified Party to give
notice of a Third-Party Claim as provided in this Section 12.3 shall not relieve
the Indemnifying Party of its indemnification obligation under this Agreement
except and only to the extent that such Indemnifying Party is actually
prejudiced as a result of such failure to give notice).  Within thirty (30) days
after delivery of such notification, the Indemnifying Party shall, upon written
notice thereof to the Indemnified Party, assume control of the defense of such
Claim with counsel reasonably satisfactory to the Indemnified Party.  If a Party
believes that a Claim presented to it for indemnification is one as to which the
Party seeking indemnification is not entitled to indemnification under
Section 12.1 or Section 12.2, it shall so notify the Party seeking
indemnification.

 

(b)                                  The Indemnified Party may participate in
such defense at its own expense.

 

(c)                                  The Indemnified Party shall cooperate fully
with the Indemnifying Party and its counsel in the defense against any such
Claim, including making available to the Indemnifying Party any books, records
or other documents within its control that are necessary

 

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for such defense.  All Reasonable Costs incurred in connection with the
Indemnified Party’s cooperation will be borne by the Indemnifying Party.

 

(d)                                  The Indemnifying Party shall keep the other
Party advised of the status of such Claim and the defense thereof and shall
consider recommendations made by the Indemnified Party with respect thereto.

 

(e)                                  The Indemnified Party shall not agree to
any settlement of such Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.  The
Indemnifying Party shall not agree to any settlement of such Claim or consent to
any judgment in respect thereof that does not include a complete and
unconditional release of the Indemnified Party from all liability with respect
thereto or that imposes any liability or obligation on the Indemnified Party or
adversely affects the Indemnified Party without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld.

 

12.4                        INSURANCE.  DURING THE TERM AND FOR SEVEN (7) YEARS
THEREAFTER, UNITED THERAPEUTICS SHALL MAINTAIN, AT ITS SOLE EXPENSE, SUCH TYPES
AND AMOUNTS OF INSURANCE COVERAGE AS ARE APPROPRIATE AND CUSTOMARY IN THE
PHARMACEUTICAL INDUSTRY IN LIGHT OF THE NATURE OF THE ACTIVITIES TO BE PERFORMED
BY UNITED THERAPEUTICS HEREUNDER.  DURING THE TERM AND FOR SEVEN (7) YEARS
THEREAFTER, LILLY SHALL (A) MAINTAIN, AT ITS SOLE EXPENSE, SUCH TYPES AND
AMOUNTS OF INSURANCE COVERAGE AS ARE APPROPRIATE AND CUSTOMARY IN THE
PHARMACEUTICAL INDUSTRY IN LIGHT OF THE NATURE OF THE ACTIVITIES TO BE PERFORMED
BY LILLY HEREUNDER, OR (B) SELF INSURE FOR SUCH RISKS.  THE PARTIES ACKNOWLEDGE
AND AGREE THAT SUCH INSURANCE SHALL NOT BE CONSTRUED TO CREATE A LIMIT OF EITHER
PARTY’S LIABILITY WITH RESPECT TO ITS INDEMNIFICATION OBLIGATIONS UNDER THIS
ARTICLE 12.  EACH PARTY SHALL PROVIDE THE OTHER WITH WRITTEN EVIDENCE OF SUCH
INSURANCE UPON REQUEST.  EACH PARTY SHALL PROVIDE THE OTHER WITH WRITTEN NOTICE
AT LEAST THIRTY (30) DAYS PRIOR TO THE CANCELLATION, NON-RENEWAL OR MATERIAL
CHANGE IN SUCH INSURANCE OR SELF-INSURANCE WHICH MATERIALLY ADVERSELY AFFECTS
THE RIGHTS OF THE OTHER PARTY HEREUNDER.

 

12.5                        NO CONSEQUENTIAL OR PUNITIVE DAMAGES.  NEITHER PARTY
WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS
HEREUNDER, OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS
AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES, EXCEPT WHERE ATTRIBUTABLE
TO A WILLFUL BREACH OF THIS AGREEMENT.  NOTHING IN THIS SECTION 12.5 IS INTENDED
TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY
WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTION 12.1 OR SECTION 12.2, OR
DAMAGES AVAILABLE FOR ANY BREACH OF CONFIDENTIALITY OBLIGATIONS SET FORTH IN
ARTICLE 11.

 

ARTICLE 13
TERM AND TERMINATION

 

13.1                        TERM.  UNLESS EARLIER TERMINATED IN ACCORDANCE WITH
THE TERMS OF THIS ARTICLE 13, THE TERM OF THIS AGREEMENT SHALL BEGIN ON THE
EFFECTIVE DATE AND WILL CONTINUE UNTIL THE LATER

 

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OF:  (A) THE EXPIRATION, LAPSE, CANCELLATION, ABANDONMENT OR INVALIDATION OF THE
LAST VALID CLAIM COVERING THE COMMERCIALIZATION OF THE PRODUCT IN THE FIELD IN
THE TERRITORY OR (B) EXPIRATION OF ANY GOVERNMENT-CONFERRED EXCLUSIVITY
RESPECTING THE USE OF THE PRODUCT IN THE FIELD IN THE TERRITORY (THE “TERM”).

 

13.2                        UNILATERAL TERMINATION BY UNITED THERAPEUTICS.
 UNITED THERAPEUTICS SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AT ANY
TIME DURING THE TERM UPON SIX (6) MONTHS WRITTEN NOTICE TO LILLY, WHICH RIGHT
MAY BE EXERCISED IN UNITED THERAPEUTICS’ DISCRETION.

 

13.3                        MATERIAL BREACH.

 

(a)                                  If a Party believes that the other Party is
in material breach of this Agreement or the Manufacturing and Supply Agreement,
then such Party may deliver notice of such breach to the allegedly breaching
Party.  In such notice, the nonbreaching Party shall identify the actions or
conduct that it wishes the allegedly breaching Party to take for an acceptable
and prompt cure of such breach; provided that such identified actions shall not
be binding upon the allegedly breaching Party with respect to the actions that
it may need to take to cure such breach.  The allegedly breaching Party shall
have ninety (90) days either to cure such breach or, if the cure cannot be
reasonably effected within such ninety (90) day period, to deliver to the
nonbreaching Party a plan for curing such breach which is reasonably sufficient
to effect a cure.  Following delivery of such plan, the breaching Party shall
use Commercially Reasonable Efforts to carry out the plan and cure the breach.

 

(b)                                  If the Party receiving notice of breach
fails to cure such breach within the ninety (90) day period, or if the proposed
corrective plan or the actions being taken to carry it out are not commercially
practicable, the nonbreaching Party may give notice of termination of this
Agreement upon thirty (30) days advance written notice.  Such notice shall
effectively terminate this Agreement upon expiration of such thirty (30) day
period, subject to Section 13.3(c).

 

(c)                                  If a Party gives notice of termination
under this Section 13.3, and the other Party disputes whether such notice was
proper, or the Parties disagree as to whether the breaching Party has cured such
breach within the applicable time period under Section 13.3(a), or if the
proposed corrective plan or the actions being taken to carry it out are not
commercially practicable, then the issue of whether this Agreement has been
terminated shall be resolved in accordance with ARTICLE 14.  If, as a result of
such dispute resolution process, it is determined that the notice of termination
was proper and that the breaching Party failed to cure such breach within the
applicable time period under Section 13.3(a), then such termination shall be
deemed to have been effective upon expiration of the time period provided in
Section 13.3(b).  If, as a result of such dispute resolution process, it is
determined that the notice of termination was improper, or the proposed
corrective plan or the actions being taken to carry it out are commercially
practicable, then no termination shall have occurred and this Agreement shall be
deemed to have remained in effect.

 

13.4                        UNILATERAL TERMINATION BY LILLY.  LILLY SHALL HAVE
THE RIGHT TO TERMINATE THIS AGREEMENT AT ANY TIME UPON:

 

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(a)                                  notice of a final rejection by FDA of
Lilly’s application for registration of a separate Lilly brand name for the
Product in the Field in the Territory; or

 

(b)                                  a Change of Control of United Therapeutics
other than a Change of Control in which Lilly or an Affiliate of Lilly is an
acquiring party or is a member of a group that, when acting in concert, is an
acquiring party.

 

13.5                        CONSEQUENCES OF EXPIRATION OR TERMINATION.

 

(a)                                  Upon Expiry of the Term Pursuant to
Section 13.1.  Upon expiry of this Agreement pursuant to Section 13.1:

 

(i)                                    if United Therapeutics elects to sell a
branded generic version of Product for use in the Field in the Territory as set
forth in Section 8.4(b):

 

(1)                                 the licenses granted to United Therapeutics
in ARTICLE 2 shall remain in effect, but shall convert to fully paid,
non-exclusive licenses solely for the purpose of the sale of a branded generic
version of the Product in the Field in the Territory;

 

(2)                                 IF LILLY IS CONTINUING TO MANUFACTURE THE
COMPOUND OR THE PRODUCT FOR EXPLOITATION IN LILLY’S DOMAIN, THE PARTIES WILL
DISCUSS THE POSSIBILITY OF LILLY CONTINUING TO SUPPLY UNITED THERAPEUTICS WITH
THE COMPOUND OR THE PRODUCT UNDER THE MANUFACTURING AND SUPPLY AGREEMENT OR A
REPLACEMENT THEREFOR;

 

(3)                                 in the absence of an agreement between the
Parties to the contrary, Lilly, commencing upon United Therapeutics election
under Section 8.4(b) and prior to the expiration of this Agreement, shall
transfer to a mutually acceptable designee of United Therapeutics the
information and technology that Lilly reasonably believes is necessary to
manufacture the Compound and the Product, together, if requested by United
Therapeutics, with reasonable assistance to answer questions regarding such
information and technology.  If United Therapeutics believes that additional
information and technology is materially useful for manufacture of the Compound
or the Product, upon United Therapeutics’ request, Lilly will make such
additional information and technology available to United Therapeutics.  Lilly
shall provide such reasonable assistance at United Therapeutics’ cost and
expense, not to exceed four hundred (400) hours.  Beyond the allotted four
hundred (400) hours of assistance, Lilly may, but shall not be obligated to,
provide advice, assistance and support at United Therapeutics’ expense, as
United Therapeutics reasonably requests, to facilitate the manufacture of the
Compound or the Product.  Lilly shall provide advice, assistance and support
services under this Section 13.5(a)(i), at Reasonable Cost;

 

(4)                                 LILLY SHALL TRANSFER TO UNITED THERAPEUTICS
ALL REGULATORY APPROVALS FOR THE PRODUCT IN THE FIELD IN THE TERRITORY; PROVIDED
THAT UNITED THERAPEUTICS HEREBY GRANTS AND SHALL GRANT TO LILLY A RIGHT TO
REFERENCE TO ANY AND ALL SUCH REGULATORY APPROVALS FOR THE PURPOSE OF SEEKING
REGULATORY APPROVALS FOR THE COMPOUND IN LILLY’S DOMAIN;

 

(5)                                 TO THE EXTENT NOT ALREADY PROVIDED TO UNITED
THERAPEUTICS, LILLY SHALL PROVIDE UNITED THERAPEUTICS WITH A COPY OF ALL
REGULATORY FILINGS RELATING TO SUCH REGULATORY APPROVALS; AND

 

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(ii)                                all United Therapeutics Confidential
Information shall be subject to Section 13.5(e).

 

Notwithstanding anything to the contrary, as a condition to the transfer of
Lilly information and technology pursuant to Section 13.5(a)(i), United
Therapeutics agrees that such information and technology will be used only in
the manufacture of a branded generic version of the Product and not for the
manufacture of any other product for any Third Party.

 

(b)                                  Upon Termination of this Agreement by
United Therapeutics Pursuant to Section 13.2, or by Lilly Pursuant to
Section 13.3 or Section 13.4(b).  Upon termination of this Agreement by United
Therapeutics pursuant to Section 13.2 or by Lilly for material breach by United
Therapeutics pursuant to Section 13.3 or by Lilly pursuant to
Section 13.4(b) upon a Change of Control of United Therapeutics:

 

(I)                                    THE LICENSES GRANTED TO UNITED
THERAPEUTICS UNDER THIS AGREEMENT SHALL TERMINATE, AND, AFTER A WIND-DOWN PERIOD
TO BE MUTUALLY AGREED BY THE PARTIES, UNITED THERAPEUTICS SHALL CEASE ALL
DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES;

 

(II)                                UNITED THERAPEUTICS SHALL DELIVER TO LILLY
OR DESTROY THE UNITED THERAPEUTICS PROMOTIONAL MATERIALS AND ANY AND ALL
PROMOTIONAL MATERIALS FOR THE PRODUCT THEN IN POSSESSION OF UNITED THERAPEUTICS
AND/OR ITS AFFILIATES.  LILLY SHALL HAVE THE RIGHT TO USE ALL ASPECTS OF THE
UNITED THERAPEUTICS PROMOTIONAL MATERIALS SOLELY IN CONNECTION WITH THE
COMMERCIALIZATION OF THE PRODUCT IN THE FIELD IN THE TERRITORY, OTHER THAN THE
CORPORATE MARKS OF UNITED THERAPEUTICS;

 

(iii)                            the license granted to Lilly in Section 2.2
shall remain in effect, but shall convert to a fully paid, non-exclusive
license; the license in Section 2.2(b) will apply in connection with Lilly’s
Development, manufacture, and Commercialization of the Product in the Field in
all territories; the license in Section 2.2(c) will apply in connection with
Lilly’s Development, manufacture, and Commercialization of the Product in all
fields in the Territory, and Lilly may conduct any clinical study of the Product
in the Field in the Territory;

 

(IV)                               TO THE EXTENT THAT UNITED THERAPEUTICS OWNS
OR OTHERWISE CONTROLS ANY PATENTS COVERING ANY ASPECT OF THE DEVELOPMENT OR
COMMERCIALIZATION OF THE PRODUCT, UNITED THERAPEUTICS HEREBY GRANTS AND SHALL
GRANT TO LILLY, EFFECTIVE UPON THE EFFECTIVE DATE OF TERMINATION OF THIS
AGREEMENT, A PERPETUAL, NON-EXCLUSIVE, FULLY-PAID, SUBLICENSEABLE, ASSIGNABLE
LICENSE UNDER SUCH PATENTS TO MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE AND
IMPORT THE PRODUCT IN THE FIELD IN THE TERRITORY; PROVIDED THAT, IF UNITED
THERAPEUTICS WOULD INCUR ANY EXPENSE TO A THIRD PARTY BY GRANTING TO LILLY SUCH
LICENSE THAT INCLUDED SUCH THIRD PARTY PATENTS, LILLY, AT LILLY’S OPTION,
EXERCISABLE AT LILLY’S SOLE DISCRETION, MAY ELECT TO INCLUDE SUCH THIRD PARTY
PATENTS IN THE LICENSE FROM UNITED THERAPEUTICS AND REIMBURSE UNITED
THERAPEUTICS FOR COSTS AND EXPENSES ACTUALLY INCURRED BY UNITED THERAPEUTICS IN
GRANTING SUCH RIGHTS TO LILLY UNDER SUCH THIRD PARTY PATENTS;

 

(v)                                   if United Therapeutics is then a party to
any agreements with Third Party independent contractors for the Product, it
shall cooperate with Lilly to enable Lilly to obtain the benefit of such
agreements as necessary to enable Lilly to exercise its rights under this

 

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ARTICLE 13, including by assigning such agreements to Lilly where reasonably
practicable. Lilly shall use Commercially Reasonable Efforts to accept the
benefit of such agreements, including by way of assignment;

 

(vi)                               all Lilly Confidential Information shall be
subject to Section 13.5(e); and

 

(VII)                           NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT OR THE MANUFACTURING AND SUPPLY AGREEMENT, UNITED THERAPEUTICS SHALL
NOT HAVE THE RIGHT, FOR A PERIOD OF TWO (2) YEARS AFTER SUCH TERMINATION, TO
DEVELOP, MANUFACTURE, USE, OR COMMERCIALIZE THE PRODUCT IN THE FIELD IN THE
TERRITORY.

 

(c)                                  Upon Termination of this Agreement by Lilly
Pursuant to Section 13.4(a).  Upon termination of this Agreement by Lilly due to
final rejection by FDA of Lilly’s application for registration of a Lilly
Product Mark pursuant to Section 13.4(a):

 

(I)                                    THE LICENSES GRANTED TO UNITED
THERAPEUTICS UNDER THIS AGREEMENT SHALL TERMINATE, AND, AFTER A WIND-DOWN PERIOD
TO BE MUTUALLY AGREED BY THE PARTIES, UNITED THERAPEUTICS SHALL CEASE ALL
DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES;

 

(II)                                UNITED THERAPEUTICS SHALL DELIVER TO LILLY
OR DESTROY THE UNITED THERAPEUTICS PROMOTIONAL MATERIALS, ANY AND ALL
PROMOTIONAL MATERIALS FOR THE PRODUCT THEN IN CONTROL OF UNITED THERAPEUTICS
AND/OR ITS AFFILIATES;

 

(iii)                            the license granted to Lilly in Section 2.2
shall remain in effect, but shall convert to a fully paid, non-exclusive
license; the license in Section 2.2(b) will apply in connection with Lilly’s
Development, manufacture, and Commercialization of the Product in the Field in
all territories; the license in Section 2.2(c) will apply in connection with
Lilly’s Development, manufacture, and Commercialization of the Product in all
fields in the Territory, and Lilly may conduct any clinical study of the Product
in the Field in the Territory;

 

(IV)                               TO THE EXTENT THAT UNITED THERAPEUTICS OWNS
OR OTHERWISE CONTROLS ANY PATENTS COVERING ANY ASPECT OF THE DEVELOPMENT OR
COMMERCIALIZATION OF THE PRODUCT, UNITED THERAPEUTICS HEREBY GRANTS AND SHALL
GRANT TO LILLY, EFFECTIVE UPON THE EFFECTIVE DATE OF TERMINATION OF THIS
AGREEMENT, A PERPETUAL, NON-EXCLUSIVE, FULLY-PAID, SUBLICENSEABLE, ASSIGNABLE
LICENSE UNDER SUCH PATENTS TO MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE AND
IMPORT THE PRODUCT IN THE FIELD IN THE TERRITORY; PROVIDED THAT, IF UNITED
THERAPEUTICS WOULD INCUR ANY EXPENSE TO A THIRD PARTY BY GRANTING TO LILLY SUCH
LICENSE THAT INCLUDED SUCH THIRD PARTY PATENTS, LILLY, AT LILLY’S OPTION,
EXERCISABLE AT LILLY’S SOLE DISCRETION, MAY ELECT TO INCLUDE SUCH THIRD PARTY
PATENTS IN THE LICENSE FROM UNITED THERAPEUTICS AND REIMBURSE UNITED
THERAPEUTICS FOR COSTS AND EXPENSES ACTUALLY INCURRED BY UNITED THERAPEUTICS IN
GRANTING SUCH RIGHTS TO LILLY UNDER SUCH THIRD PARTY PATENTS;

 

(v)                                   if United Therapeutics is then a party to
any agreements with Third Party independent contractors for the Product, it
shall cooperate with Lilly to enable Lilly to obtain the benefit of such
agreements as necessary to enable Lilly to exercise its rights under this
ARTICLE 13, including by assigning such agreements to Lilly where reasonably
practicable. Lilly shall use Commercially Reasonable Efforts to accept the
benefit of such agreements,

 

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including by way of assignment, and indemnify United Therapeutics for any
liabilities arising under such agreements after the date of the notice referred
to in Section 13.4(a);

 

(vi)          all Lilly Confidential Information shall be subject to
Section 13.5(e); and

 

(vii)         within thirty (30) days after the effective date of termination of
this Agreement, Lilly shall reimburse United Therapeutics any and all amounts
paid to Lilly by United Therapeutics pursuant to Section 7.1 and any prepayment
made by United Therapeutics pursuant to the Manufacturing and Supply Agreement. 
For purposes of clarification, Lilly will have no obligation to reimburse United
Therapeutics any amount paid to Lilly by United Therapeutics pursuant to
Section 7.1 if Regulatory Approval for the Product in the Field in the Territory
is not obtained, unless such failure was due to a material breach of this
Agreement by Lilly.

 

(d)           Upon Termination of this Agreement by United Therapeutics Pursuant
to Section 13.3.  Upon Termination of this Agreement by United Therapeutics for
material breach by Lilly pursuant to Section 13.3:

 

(i)            if requested by United Therapeutics, Lilly shall: (a) transfer to
United Therapeutics all Regulatory Approvals for the Product in the Field in the
Territory; (b) to the extent not already provided to United Therapeutics,
provide United Therapeutics with a copy of all Regulatory Filings relating to
such Regulatory Approvals; (c) transfer to United Therapeutics or its designee
the information and technology necessary or materially useful to manufacture the
Product, together, if requested by United Therapeutics, with reasonable
assistance to answer questions regarding such information and technology, such
reasonable assistance to be provided at United Therapeutics’ cost and expense,
not to exceed four hundred (400) hours; provided that Lilly may, but shall not
be obligated to, provide advice, assistance and support beyond the allotted four
hundred (400) hours of assistance at United Therapeutics’ expense as United
Therapeutics reasonably requests to facilitate the manufacture of the Product;
and (d) grant and does hereby grant United Therapeutics a perpetual, fully-paid,
sublicenseable, assignable license to make and have made the Product.  Lilly
shall provide advice, assistance and support services under this
Section 13.5(d)(i), at its Reasonable Cost;

 

(ii)           for a reasonable period after the expiry of this Agreement, and
in any event for so long as United Therapeutics or its designee is diligently
acquiring the ability to manufacture and supply the Product pursuant to
Section 13.5(a)(i)(3) or otherwise acquire a source of the Product, Lilly shall
continue, or shall cause its Affiliates to continue, to supply the Product to
United Therapeutics pursuant to the Manufacturing and Supply Agreement on the
same terms as such Product was supplied immediately prior to such expiry;

 

(iii)         the licenses granted to Lilly under this Agreement shall survive;
and

 

(iv)          subject to the terms of ARTICLE 7, the licenses granted to United
Therapeutics in ARTICLE 2 shall remain in effect, but shall convert to perpetual
licenses.  After

 

55

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the expiry of the original Term, had the earlier termination not occurred, such
licenses shall become non-exclusive and United Therapeutics shall have the
rights set out in Section 13.5(a)(i).

 

(e)           Return of Confidential Information.  Upon the early termination of
this Agreement, upon the request of the non-defaulting Party, the other Party
will promptly return to the non-defaulting Party or destroy all material
embodying Confidential Information in its possession or under its control,
including all copies thereof, except for a single copy retained solely for the
purpose of ensuring compliance with the terms of this Agreement.

 

(f)            Limitation.  Notwithstanding anything to the contrary in this
Agreement or the Manufacturing and Supply Agreement, United Therapeutics shall
not have the right, after expiration or termination, to Develop, manufacture,
use, or Commercialize the Product outside the Field or outside the Territory at
any time.

 

13.6        SURVIVAL.

 

(a)           The rights and obligations of the Parties under the following
provisions of this Agreement shall survive any expiration or termination of this
Agreement:  ARTICLE 1, Sections 2.7 and 5.3(e), ARTICLE 7 (to the extent that
any amounts payable remain unpaid, and provided that Section 7.6 shall survive
only for the period set forth therein) but not including Section 7.1, Sections
8.1, 9.1 and 10.4, ARTICLE 11 (for the period set forth in Section 11.1),
Sections 12.1, 12.2, 12.3, 12.4 (for the period set forth in Section 12.4),
12.5, 13.5 (as applicable), 13.6 and 13.7, ARTICLE 14 and ARTICLE 15.

 

(b)           In the event of (i) expiration of this Agreement, but not
termination, and (ii) the election by United Therapeutics to be the exclusive
authorized branded generic manufacturer and/or seller of the Product in the
Field in the Territory in accordance with Section 8.4(b), the obligations of the
Parties under Sections 9.4, 9.5, 9.6, 9.7 and 9.8 will survive.

 

13.7        NO WAIVER OF REMEDIES.  EXPIRATION OR TERMINATION OF THIS AGREEMENT
SHALL NOT PRECLUDE EITHER PARTY FROM (A) CLAIMING ANY OTHER DAMAGES,
COMPENSATION OR RELIEF THAT IT MAY BE ENTITLED TO UPON SUCH EXPIRATION OR
TERMINATION, (B) ANY RIGHT TO RECEIVE ANY AMOUNTS ACCRUED UNDER THIS AGREEMENT
PRIOR TO THE EXPIRATION OR TERMINATION DATE BUT WHICH ARE UNPAID OR BECOME
PAYABLE THEREAFTER AND (C) ANY RIGHT TO OBTAIN PERFORMANCE OF ANY OBLIGATION
PROVIDED FOR IN THIS AGREEMENT WHICH SHALL SURVIVE EXPIRATION OR TERMINATION.

 

ARTICLE 14

DISPUTE RESOLUTION

 

14.1        DISPUTES.  THE PARTIES RECOGNIZE THAT DISPUTES AS TO CERTAIN MATTERS
MAY FROM TIME TO TIME ARISE DURING THE TERM THAT RELATE TO EITHER PARTY’S RIGHTS
AND/OR OBLIGATIONS HEREUNDER.  IT IS THE DESIRE OF THE PARTIES TO ESTABLISH
PROCEDURES TO FACILITATE THE RESOLUTION OF DISPUTES ARISING UNDER THIS AGREEMENT
IN AN EXPEDIENT MANNER BY MUTUAL COOPERATION AND WITHOUT RESORT TO ARBITRATION
OR

LITIGATION.  TO ACCOMPLISH THIS OBJECTIVE, THE PARTIES AGREE TO FOLLOW THE
PROCEDURES SET FORTH IN THIS ARTICLE 14 IF AND WHEN A DISPUTE

ARISES UNDER THIS AGREEMENT.  EITHER PARTY MAY REFER A DISPUTE UNDER THIS
AGREEMENT TO THE PARTIES’ ALLIANCE MANAGERS. IF THE ALLIANCE MANAGERS ARE UNABLE
TO RESOLVE ANY SUCH DISPUTE WITHIN NINETY (90) DAYS AFTER SUCH DISPUTE IS
SUBMITTED TO IT, EITHER PARTY MAY, BY WRITTEN NOTICE TO THE OTHER PARTY, HAVE
SUCH DISPUTE REFERRED

 

56

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TO THEIR RESPECTIVE EXECUTIVE OFFICERS DESIGNATED BELOW OR THEIR SUCCESSORS, FOR
ATTEMPTED RESOLUTION BY GOOD FAITH NEGOTIATIONS WITHIN FORTY-FIVE (45) DAYS
AFTER SUCH NOTICE IS RECEIVED.  SUCH DESIGNATED OFFICERS ARE AS FOLLOWS:

 

 

For Lilly:

A member of Lilly’s Executive Committee, or his/her direct report

 

 

 

 

 

For United Therapeutics:

Roger Jeffs, Ph.D., or his direct report

 

In the event the designated officers are not able to resolve such dispute within
such forty-five (45) day period after receipt of written notice, then such
dispute (other than a matter within the final decision-making authority of a
Party as set forth in Section 3.4(c)) shall, at the election of either Party, be
decided in accordance with the provisions of Section 14.2.

 

14.2        GOVERNING LAW; DISPUTE RESOLUTION.

 

(a)           This Agreement shall be construed and interpreted in accordance
with the laws of the State of New York, without regard to any conflicts of law
principles that would provide for the application of the laws of another
jurisdiction.

 

(b)           Unless otherwise agreed by the Parties, all actions and
proceedings relating to Patents and non-disclosure, non-use and maintenance of
Confidential Information shall be heard and determined in any New York State or
federal court sitting in the City of New York, County of Manhattan, and the
Parties hereby irrevocably submit to the exclusive jurisdiction of such courts
in any such action or proceeding and irrevocably waive any defense of an
inconvenient forum to the maintenance of any such action or proceeding.

 

(c)           Subject to Section 14.2(b), if the Parties are unable resolve a
given dispute pursuant to Section 14.1, either Party may have the given dispute
settled by binding arbitration in the manner described below.

 

(d)           If a Party intends to begin an arbitration to resolve a dispute
arising under this Agreement, such Party shall provide written notice (the
“Arbitration Request”) to the other Party of such intention and the issues for
resolution.  From the date of the Arbitration Request and until such time as the
dispute has become finally settled, the running of the time periods as to which
Party must cure a breach of this Agreement becomes suspended as to the subject
matter of the dispute.

 

(e)           Within ten (10) business days after the receipt of the Arbitration
Request, the other Party may, by written notice, add additional issues for
resolution.

 

(f)            Discovery shall be under the U.S. Federal Rules of Civil
Procedure then in effect in the District Court for the Southern District of New
York.  The Arbitration shall be held in the City of New York, under the rules of
the American Arbitration Association (“AAA”).  The arbitration shall be
conducted by three (3) arbitrators who are knowledgeable in the subject matter
at issue in the dispute.  One (1) arbitrator will be selected by United
Therapeutics, one (1) arbitrator will be selected by Lilly, and the third
arbitrator will be selected by mutual agreement of the two (2) arbitrators
selected by the Parties.  The arbitrators may proceed to an award,

 

57

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notwithstanding the failure of either Party to participate in the proceedings. 
The arbitrators shall, within fifteen (15) calendar days after the conclusion of
the arbitration hearing, issue a written award and statement of decision
describing the essential findings and conclusions on which the award is based,
including the calculation of any damages awarded.  The arbitrators shall be
authorized to grant any temporary, preliminary or permanent equitable remedy or
relief the arbitrators deem just and equitable and within the scope of this
Agreement, including an injunction or order for specific performance.  The award
of the arbitrators shall be the sole and exclusive remedy of the Parties. 
Judgment on the award rendered by the arbitrators may be enforced in any court
having competent jurisdiction thereof, subject only to revocation on grounds of
fraud or clear bias on the part of the arbitrators.  Notwithstanding anything
contained in this Section 14.2 to the contrary, each Party shall have the right
to institute judicial proceedings against the other Party or anyone acting by,
through or under such other Party, in order to enforce the instituting Party’s
rights hereunder through specific performance, injunction or similar equitable
relief.

 

(g)           Each Party shall bear its own attorneys’ fees, costs, and
disbursements arising out of the arbitration, and shall pay an equal share of
the fees and costs of the arbitrators; provided, however, that the arbitrators
shall be authorized to determine whether a Party is the prevailing Party, and if
so, to award to that prevailing Party reimbursement for its reasonable
attorneys’ fees, costs and disbursements (including, for example, expert witness
fees and expenses, photocopy charges and travel expenses), and/or the fees and
costs of the arbitrators.  Absent the filing of an application to correct or
vacate the arbitration award as permitted by applicable law, each Party shall
fully perform and satisfy the arbitration award within fifteen (15) days of the
service of the award.

 

(h)           By agreeing to this binding arbitration provision, the Parties
understand that they are waiving certain rights and protections which may
otherwise be available if a dispute between the Parties were determined by
litigation in court, including the right to seek or obtain certain types of
damages precluded by this provision, the right to a jury trial, certain rights
of appeal, and a right to invoke formal rules of procedure and evidence.

 

ARTICLE 15

MISCELLANEOUS

 

15.1        ENTIRE AGREEMENT.  THIS AGREEMENT, THE MANUFACTURING AND SUPPLY
AGREEMENT AND THE STOCK PURCHASE AGREEMENT, INCLUDING THE EXHIBITS HERETO AND
THERETO, CONSTITUTE THE ENTIRE UNDERSTANDING BETWEEN THE PARTIES WITH RESPECT TO
THE SUBJECT MATTER CONTAINED HEREIN AND SUPERSEDES ANY AND ALL PRIOR AND
CONTEMPORANEOUS AGREEMENTS, UNDERSTANDINGS AND ARRANGEMENTS WHETHER ORAL OR
WRITTEN BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF, INCLUDING THE
CONFIDENTIALITY AGREEMENT.  THIS AGREEMENT WILL CONTROL IN THE EVENT OF ANY
CONFLICT BETWEEN THIS AGREEMENT AND THE COMMERCIALIZATION PLAN.

 

15.2        ASSIGNMENT.  A PARTY MAY NOT ASSIGN THIS AGREEMENT OR ANY RIGHTS OR
OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE NON-ASSIGNING
PARTY, AND ANY ATTEMPTED ASSIGNMENT WITHOUT SUCH CONSENT SHALL BE NULL AND VOID.
NOTWITHSTANDING THE FOREGOING, LILLY MAY ASSIGN THIS AGREEMENT TO ANY OF ITS
AFFILIATES, OR IN CONNECTION WITH A MERGER OR ACQUISITION OF OR BY LILLY, OR A
SALE OF LILLY’S ASSETS TO WHICH THIS AGREEMENT RELATES. THIS AGREEMENT SHALL

 

58

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BE BINDING UPON AND, SUBJECT TO THE TERMS OF THIS SECTION 15.2, INURE TO THE
BENEFIT OF A PARTY’S SUCCESSORS AND PERMITTED ASSIGNS.

 

15.3        AMENDMENTS.  NO AMENDMENT, CHANGE, MODIFICATION OR ALTERATION OF THE
TERMS AND CONDITIONS OF THIS AGREEMENT SHALL BE BINDING UPON EITHER PARTY UNLESS
IN WRITING AND SIGNED BY THE PARTY TO BE CHARGED.

 

15.4        BANKRUPTCY.  ALL RIGHTS AND LICENSES GRANTED UNDER OR PURSUANT TO
THIS AGREEMENT BY LILLY OR UNITED THERAPEUTICS ARE, AND WILL OTHERWISE BE DEEMED
TO BE, FOR PURPOSES OF SECTION 365(N) OF THE U.S. BANKRUPTCY CODE, LICENSES OF
RIGHT TO “INTELLECTUAL PROPERTY” AS DEFINED UNDER SECTION 101 OF THE U.S.
BANKRUPTCY CODE.  THE PARTIES AGREE THAT THE PARTIES, AS LICENSEES OF SUCH
RIGHTS UNDER THIS AGREEMENT, WILL RETAIN AND MAY FULLY EXERCISE ALL OF THEIR
RIGHTS AND ELECTIONS UNDER THE U.S. BANKRUPTCY CODE.  THE PARTIES FURTHER AGREE
THAT, IN THE EVENT OF THE COMMENCEMENT OF A BANKRUPTCY PROCEEDING BY OR AGAINST
EITHER PARTY UNDER THE U.S. BANKRUPTCY CODE, THE PARTY HERETO THAT IS NOT A
PARTY TO SUCH PROCEEDING WILL BE ENTITLED TO A COMPLETE DUPLICATE OF (OR
COMPLETE ACCESS TO, AS APPROPRIATE) ANY SUCH INTELLECTUAL PROPERTY AND ALL
EMBODIMENTS OF SUCH INTELLECTUAL PROPERTY, AND SAME, IF NOT ALREADY IN THEIR
POSSESSION, WILL BE PROMPTLY DELIVERED TO THEM (A) UPON ANY SUCH COMMENCEMENT OF
A BANKRUPTCY PROCEEDING UPON THEIR WRITTEN REQUEST THEREFOR, UNLESS THE PARTY
SUBJECT TO SUCH PROCEEDING ELECTS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS
UNDER THIS AGREEMENT, OR (B) IF NOT DELIVERED UNDER (A) ABOVE, FOLLOWING THE
REJECTION OF THIS AGREEMENT BY OR ON BEHALF OF THE PARTY SUBJECT TO SUCH
PROCEEDING UPON WRITTEN REQUEST THEREFOR BY THE NON-SUBJECT PARTY.

 

15.5        NON-WAIVER.  THE WAIVER BY EITHER OF THE PARTIES OF ANY BREACH OF
ANY PROVISION HEREOF BY THE OTHER PARTY SHALL NOT BE CONSTRUED TO BE A WAIVER OF
ANY SUCCEEDING BREACH OF SUCH PROVISION OR A WAIVER OF THE PROVISION ITSELF.

 

15.6        SEVERABILITY.  IF AND TO THE EXTENT THAT ANY COURT OR TRIBUNAL OF
COMPETENT JURISDICTION HOLDS ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT,
OR THE APPLICATION THEREOF TO ANY CIRCUMSTANCES, TO BE INVALID OR UNENFORCEABLE
IN A FINAL NONAPPEALABLE ORDER, THE PARTIES SHALL USE THEIR BEST EFFORTS TO
REFORM THE PORTIONS OF THIS AGREEMENT DECLARED INVALID TO REALIZE THE INTENT OF
THE PARTIES AS FULLY AS PRACTICAL, AND THE REMAINDER OF THIS AGREEMENT AND THE
APPLICATION OF SUCH INVALID TERM OR PROVISION TO CIRCUMSTANCES OTHER THAN THOSE
AS TO WHICH IT IS HELD INVALID OR UNENFORCEABLE SHALL NOT BE AFFECTED THEREBY,
AND EACH OF THE REMAINING TERMS AND PROVISIONS OF THIS AGREEMENT SHALL REMAIN
VALID AND ENFORCEABLE TO THE FULLEST EXTENT OF THE LAW.

 

15.7        NOTICE.  ANY NOTICE TO BE GIVEN UNDER THIS AGREEMENT MUST BE IN
WRITING AND DELIVERED EITHER IN PERSON, BY ANY METHOD OF MAIL (POSTAGE PREPAID)
REQUIRING RETURN RECEIPT, OR BY INTERNATIONAL COURIER OR FACSIMILE CONFIRMED
THEREAFTER BY ANY OF THE FOREGOING, TO THE PARTY TO BE NOTIFIED AT ITS
ADDRESS(ES) GIVEN BELOW, OR AT ANY ADDRESS SUCH PARTY HAS PREVIOUSLY DESIGNATED
BY PRIOR WRITTEN NOTICE TO THE OTHER.  NOTICE SHALL BE DEEMED SUFFICIENTLY GIVEN
FOR ALL PURPOSES UPON THE EARLIER OF:  (A) THE DATE OF ACTUAL RECEIPT; (B) IF
MAILED, FIVE (5) CALENDAR DAYS AFTER THE DATE OF POSTMARK; OR (C) IF DELIVERED
BY INTERNATIONAL COURIER, THE NEXT BUSINESS DAY THE OVERNIGHT COURIER REGULARLY
MAKES DELIVERIES IN THE COUNTRY OF THE RECIPIENT:

 

59

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If to Lilly, as follows:

 

Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285
Facsimile:
Attn:  President, U.S. Affiliate

 

With a copy to:

 

Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285
Facsimile: 
Attn:  General Counsel

 

If to United Therapeutics, as follows:

 

United Therapeutics Corporation
1110 Spring Street
Silver Spring, Maryland  20910
Attention: Martine Rothblatt, Ph.D.
Facsimile: 

 

With copies to:

 

United Therapeutics Corporation
1110 Spring Street
Silver Spring, Maryland  20910
Attention: John Ferrari, CFO
Facsimile: 

 

United Therapeutics Corporation
1735 Connecticut Avenue, N.W.
Washington, D.C.  20009
Attention: Paul A. Mahon, General Counsel
Fax Number: 

 

or to such other address as to which the Party has given written notice
thereof.  Such notices shall be deemed given upon receipt.

 

15.8        FURTHER ASSURANCES.  EACH PARTY SHALL, AT ITS OWN EXPENSE, FURNISH,
EXECUTE, AND DELIVER ALL DOCUMENTS AND TAKE ALL ACTIONS AS MAY REASONABLY BE
REQUIRED TO EFFECT THE TERMS AND PURPOSES OF THIS AGREEMENT.

 

15.9        FORCE MAJEURE.  EXCEPT WITH RESPECT TO UNITED THERAPEUTICS’
OBLIGATION TO MAKE PAYMENTS TO LILLY, NO FAILURE OR OMISSION BY THE PARTIES IN
THE PERFORMANCE OF ANY OBLIGATION OF THIS AGREEMENT SHALL BE DEEMED A BREACH OF
THIS AGREEMENT NOR SHALL IT CREATE ANY LIABILITY IF THE SAME SHALL ARISE FROM
ANY CAUSE OR CAUSES BEYOND THE REASONABLE CONTROL OF THE AFFECTED PARTY,
INCLUDING THE FOLLOWING, WHICH FOR PURPOSES OF THIS AGREEMENT SHALL BE REGARDED
AS BEYOND THE CONTROL OF THE PARTY IN QUESTION: ACTS OF NATURE; ACTS OR
OMISSIONS OF ANY GOVERNMENT; ANY RULES,

 

60

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REGULATIONS, OR ORDERS ISSUED BY ANY GOVERNMENTAL AUTHORITY OR BY ANY OFFICER,
DEPARTMENT, AGENCY OR INSTRUMENTALITY THEREOF; FIRE; STORM; FLOOD; EARTHQUAKE;
ACCIDENT; WAR; REBELLION; INSURRECTION; RIOT; INVASION; STRIKES; AND LOCKOUTS OR
THE LIKE; PROVIDED THAT THE PARTY SO AFFECTED SHALL USE ITS BEST EFFORTS TO
AVOID OR REMOVE SUCH CAUSES OR NONPERFORMANCE AND SHALL CONTINUE PERFORMANCE
HEREUNDER WITH THE UTMOST DISPATCH WHENEVER SUCH CAUSES ARE REMOVED.

 

15.10      INDEPENDENT CONTRACTORS.  IT IS UNDERSTOOD THAT BOTH PARTIES ARE
INDEPENDENT CONTRACTORS AND ENGAGE IN THE OPERATION OF THEIR OWN RESPECTIVE
BUSINESSES, AND NEITHER PARTY IS TO BE CONSIDERED THE AGENT OR PARTNER OF THE
OTHER PARTY FOR ANY PURPOSE WHATSOEVER, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT.  NEITHER PARTY HAS ANY AUTHORITY TO ENTER INTO ANY CONTRACTS
OR ASSUME ANY OBLIGATIONS FOR THE OTHER PARTY OR MAKE ANY WARRANTIES OR
REPRESENTATIONS ON BEHALF OF THE OTHER PARTY.  FURTHERMORE, NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS CREATING A PARTNERSHIP OR JOINT VENTURE AMONG
THE PARTIES.

 

15.11      PERFORMANCE BY AFFILIATES.  THE PARTIES RECOGNIZE THAT EACH PARTY MAY
PERFORM SOME OR ALL OF ITS OBLIGATIONS, OR EXERCISE SOME OR ALL OF ITS RIGHTS,
UNDER THIS AGREEMENT OR THE MANUFACTURING AND SUPPLY AGREEMENT THROUGH ONE OR
MORE AFFILIATES OF SUCH PARTY. IN EACH SUCH CASE, THE PARTY PERMITTING SUCH
DELEGATION OR EXERCISE BY SUCH AFFILIATE SHALL REMAIN RESPONSIBLE FOR AND BE
GUARANTOR OF THE PERFORMANCE BY SUCH AFFILIATE. LILLY AND UNITED THERAPEUTICS
SHALL EACH CAUSE ITS RESPECTIVE AFFILIATES TO COMPLY WITH THE PROVISIONS OF THIS
AGREEMENT IN CONNECTION WITH SUCH PERFORMANCE OR EXERCISE.  IN SUCH EVENT, EACH
REFERENCE TO A PARTY IN THIS AGREEMENT SHALL BE DEEMED TO INCLUDE A REFERENCE TO
EACH AFFILIATE ENGAGED IN SUCH PERFORMANCE OR EXERCISE. LILLY SHALL CAUSE EACH
OF ITS AFFILIATES TO COMPLY WITH THE TERMS OF SECTIONS 2.1 AND 2.4 AS IF SUCH
AFFILIATE WERE LILLY HEREUNDER.

 

15.12      NO THIRD PARTY BENEFICIARIES.  THIS AGREEMENT IS NEITHER EXPRESSLY
NOR IMPLIEDLY MADE FOR THE BENEFIT OF ANY PARTY OTHER THAN THOSE EXECUTING IT.

 

15.13      INTERPRETATION.

 

(a)           Captions & Headings.  The captions and headings of clauses
contained in this Agreement preceding the text of the articles, sections,
subsections and paragraphs hereof are inserted solely for convenience and ease
of reference only and shall not constitute any part of this Agreement, or have
any effect on its interpretation or construction.

 

(b)           Singular & Plural.  All references in this Agreement to the
singular shall include the plural where applicable, and all references to gender
shall include both genders and the neuter.

 

(c)           Articles, Sections & Subsections.  Unless otherwise specified,
references in this Agreement to any article shall include all sections,
subsections, and paragraphs in such article; references in this Agreement to any
section shall include all subsections and paragraphs in such sections; and
references in this Agreement to any subsection shall include all paragraphs in
such subsection.

 

(d)           Days.  All references to days in this Agreement shall mean
calendar days, unless otherwise specified.

 

61

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(e)           Clarification.  The word “including” shall be deemed to mean
“including without limitation” and “including, but not limited to”.  A consent
that is identified in this Agreement as not “to be unreasonably withheld” shall
not be unreasonably withheld, delayed or conditioned.

 

(f)            Ambiguities.  Ambiguities and uncertainties in this Agreement, if
any, shall not be interpreted against either Party, irrespective of which Party
may be deemed to have caused the ambiguity or uncertainty to exist.

 

(g)           Priority.  In the event of any inconsistency between the
provisions of this Agreement and the Manufacturing and Supply Agreement, the
provisions of this Agreement shall control.

 

15.14      COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL AND BOTH OF WHICH TOGETHER SHALL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

[Signature Page Follows]

 

62

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IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have executed
this License Agreement by their duly authorized representatives as of the
Execution Date.

 

ELI LILLY AND COMPANY

UNITED THERAPEUTICS

CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ John C. Lechleiter

 

By:

/s/ Roger A. Jeffs

 

 

Name: John C. Lechleiter

Name: Roger A. Jeffs

 

 

Title: President & Chief Executive Officer

Title: President & Chief Operating Officer

 

 

[Signature Page to License Agreement]

 

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

 

Exhibit 1.13

Compound

 

[g309401ki15i001.gif]

 

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

 

Exhibit 1.37

Lilly Patents

 

5,859,006, Granted January, 12, 1999

 

6,821,975, Granted November 23, 2004

 

7, 182, 958, Granted February 27, 2007

 

US Application 10/521,393

 

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

 

Exhibit 1.44

Proposed(1) Specifications for Product ([***] Tablets)

 

Test

 

Analytical
Procedure

 

Acceptance Criteria

Identification Test

 

 

 

 

Identification

 

IR

 

The infrared spectrum must [***] with that of the reference sample obtained
under the same conditions.

Potency Tests

 

 

 

 

Assay

 

LC

 

NLT [***]% and NMT [***]% of label claim as determined by liquid chromatography

Uniformity of Dosage Units

 

USP

 

Meets USP requirements

Purity Tests

 

 

 

 

Total Degradation Products

 

LC

 

NMT [***]% as determined by liquid chromatography

Any Unspecified Degradation Product

 

LC

 

NMT [***]% as determined by liquid chromatography

Other Tests

 

 

 

 

Physical Appearance(2)

 

Visual

 

[***], [***]-shaped tablet debossed with “[***]”

Dissolution

 

USP

 

Meets USP requirements;
Q = [***]% at [***] and
Q = [***]% at [***]

 

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

NLT = Not less than; NMT = Not more than

 

(1)  Pending regulatory agency approval

 

(2)  Physical Appearance is equivalent to the ICH term “Description.”

 

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

 

Exhibit 1.52

Safety Agreement Table of Contents

 

A.            Background

 

B.            General Considerations

 

Management of a Single Global Safety Database

 

Adherence to Standard Operating Procedures

 

European Qualified Person for Pharmacovigilance (QPPV)

 

Rights of Pharmacovigilance Audit

 

Records Retention

 

Data Reconciliation

 

C.            Adverse Event Reporting and Exchange

 

Clock Start Date for Expedited Reporting

 

Regulatory Reporting Responsibilities

 

Language, Format and Mode for Information Exchange

 

Timing Requirements

 

Assessing Listedness

 

Responsibilities for Obtaining Follow-Up Information

 

Literature Review

 

Collection of Lot Numbers

 

Data Required for Internal Committees

 

D.            Risk Management

 

Risk Management Plan Development and Maintenance

 

Safety Signal Detection and Surveillance

 

E.             Periodic Reports

 

F.             Regulatory Inquiry from Health Authorities

 

G.            Regulatory Inspections

 

H.            Dispute Resolution

 

I.              Safety Agreement Termination

 

Attachment 1: Contacts

 

Attachment 2:  Adverse Event Reporting Contacts

 

Attachment 3:  Territories

 

Attachment 4:  AE Process Flow and Case Receipt Reconciliation

 

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

 

Exhibit 5.1

Ongoing Lilly Trials

 

Protocol H6D-MC-LVGX(f):  An Extension Study to Evaluate the Long-Term Safety
and Efficacy of the Phosphodiesterase Type 5 (PDE5) Inhibitor Tadalafil in the
Treatment of Patients with Pulmonary Arterial Hypertension

 

Following is a summary of the ongoing extension portion of the LVGX (amendment
F) trial.

 

·      The LVGX trial has two parts:

 

·      A blinded 52-week phase (Part 1)

 

·      The primary objective of Part 1 was to evaluate the long-term safety of
tadalafil 20 mg and 40 mg once daily in the treatment of patients with PAH. A
secondary objective was to determine the durability of efficacy.

 

·      An open-label phase (Part 2).

 

·      The primary objective of Part 2 is to evaluate long-term safety while
providing continued access to tadalafil for patients completing Part 1. 
Subjects receive tadalafil 40 mg once daily.

 

·      The blinded 52-week phase (Part 1) of trial LVGX had Last Patient Visit
on May 20, 2008.  There are still patients active in the open-label phase (246
patients).

 

·      Part 2 is the open-label phase of a study of tadalafil administered
orally to subjects with PAH following completion of Part 1 (52-week,
double-blind, extension phase). Treatment will be provided until tadalafil
becomes commercially available for the treatment of PAH, or the Sponsor
concludes the study.

 

·      Patient office visits take place every 12 Weeks (+7 days) during the
open-label phase.  During these visit, the following activities take place:

 

·      Collect any unused study drug dispensed at the previous visit, including

·      Empty study drug packaging.

·      Dispense a 13-week supply of study drug.

·      Collect adverse event information (including SAEs).

·      Collect concomitant medication information.

·      Collect reason for discontinuation.

 

·      During the open-label phase, subjects and study personnel (including
Investigator), and the Sponsor will know which treatment is being administered. 
Patients may begin treatment with a new, chronic therapy for PAH (for example,
prostacyclin or analogue, endothelin receptor antagonist) without being
discontinued from the extension study. However, subjects who receive a PDE5
inhibitor must be discontinued from the study.

 

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

 

Exhibit 5.2(f)

[***]™ Phase IV Clinical Plan*

 

Study Title

 

Study Description

[***]

 

[***]

[***]

 

[***]

[***]

 

[***]

 

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

*      In no event shall any study or other activity under this [***]™ Phase IV
Clinical Plan relate to any Secondary Indication, unless otherwise approved by
Lilly.

 

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

 

Exhibit 6.2

Commercialization Plan

 

The Commercialization Plan delivered by Mark Miller to Paul Mahon on November 5,
2008.

 

UT Brand Plan Outline

 

I.      Business Objectives

 

II.    Situation Analysis

 

III.   Strategies

 

IV.   Tactics

 

V.    Medical Plan

 

VI.   Budgets

 

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

 

Exhibit 7.5

Wire Instructions for Payments to Lilly

 

Swift code for

 

ABA#: 

For account of:  Eli Lilly & Company

Account No.: 

Ref:                                                    (Key words to identify
payment)

 

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Exhibit 7.8

Wire Instructions for Payments to United Therapeutics

 

Bank:

 

ABA/Routing #:

Account name: United Therapeutics Corporation

Account number:

 

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Exhibit 10.2(j)

Encumbrances, Security Interests, Options and Licenses

 

Collaboration Agreement dated October 3, 1991 and amended January 24, 1997 by
and among: Glaxo Group Limited, SmithKline Beecham Corporation, doing business
as GlaxoSmithKline, successor in interest to Glaxo Wellcome Inc. and ICOS

 

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Exhibit 10.2(k)

Claims, Actions, Suits or Proceedings

 

Vanderbilt v. ICOS (Case No. 05-506-SLR in the United States District Court for
the District of Delaware)

 

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Exhibit 10.2(p)(ii)

Other Claims, Actions, Suits or Proceedings

 

Vanderbilt v. ICOS (Case No. 05-506-SLR in the United States District Court for
the District of Delaware)

 

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Exhibit 11.5

Press Release

 

(SEE ATTACHED)

 

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[g309401ki15i002.jpg]

 

Eli Lilly and Company

Lilly Corporate Center

Indianapolis, Indiana 46285

U.S.A.

www.lilly.com

 

Date: November 17, 2008

 

For Release:

 

Immediately

Refer to:

 

Mark E. Taylor (317) 276-5795 (Lilly)

 

 

Andrew Fisher (202) 483-7000 (United Therapeutics)

 

Lilly Licenses U.S. Rights for Tadalafil PAH Indication to United Therapeutics

Lilly Takes $150 Million Equity Stake in United Therapeutics

Companies Also Sign Manufacturing and Supply Agreement

 

INDIANAPOLIS., IN and SILVER SPRING, MD – Eli Lilly and Company (NYSE :LLY) and
United Therapeutics Corporation (NASDAQ:UTHR) today announced that the two
companies have entered into a license and a supply agreement related to the U.S.
commercialization rights for the pulmonary arterial hypertension (PAH)
indication of Lilly’s molecule, tadalafil. The PAH indication is currently under
regulatory review in the United States, Canada, Mexico, Japan and the European
Union.

 

Under the terms of the agreements, United Therapeutics will make an upfront
payment of $150 million to Lilly for the exclusive rights to commercialize
tadalafil for PAH in the United States, as well as for a product manufacturing
and supply arrangement. Lilly will manufacture and supply tadalafil to United
Therapeutics and will retain authority globally for all regulatory, development,
intellectual property and manufacturing aspects of the tadalafil molecule for
all potential indications. Lilly will also retain commercialization rights to
tadalafil for PAH outside of the U.S. In addition, Lilly will purchase $150
million of common stock from United Therapeutics. The transaction is subject to
clearance of the stock purchase under the Hart-Scott-Rodino Antitrust
Improvements Act and other customary closing conditions.

 

“United Therapeutics brings substantial expertise and passion to the treatment
of patients with PAH and will be an excellent partner for this product,”
commented Dr. Gwen G. Krivi, Ph.D., vice president of Lilly Research Labs and
global brand development platform leader for Lilly. “Their experience in this
field will greatly enhance the ability to provide tadalafil for PAH, if

 

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approved, as a new therapeutic option for this very serious disease.  We are
also pleased to make a financial investment in a promising and profitable
biotechnology company. The collaboration with United Therapeutics adds to the
success of Lilly’s networking strategy.”

 

“The addition of tadalafil for PAH expands our portfolio and strengthens United
Therapeutics’ position in the area of cardiovascular disease,” said Martine
Rothblatt, Ph.D, chairman and chief executive officer of United Therapeutics.
“Building upon the success of Remodulin, we are committed to addressing the
unmet medical needs of patients. We also welcome the support and confidence
expressed by Lilly through their financial investment in our company.”

 

About Pulmonary Arterial Hypertension

 

Pulmonary arterial hypertension (PAH) is a rare blood vessel disorder of the
lung in which the pressure in the pulmonary artery (the blood vessel that leads
from the heart to the lungs) rises above normal levels. It is a severe, chronic
and life threatening disease.

 

About United Therapeutics

 

United Therapeutics is a biotechnology company focused on the development and
commercialization of unique products to address the unmet medical needs of
patients with chronic and life-threatening cardiovascular and infectious
diseases and cancer. [uthr-g]

 

About Lilly

 

Lilly, a leading innovation-driven corporation, is developing a growing
portfolio of first-in-class and best-in-class pharmaceutical products by
applying the latest research from its own worldwide laboratories and from
collaborations with eminent scientific organizations. Headquartered in
Indianapolis, Ind., Lilly provides answers – through medicines and information –
for some of the world’s most urgent medical needs. Additional information about
Lilly is available at www.lilly.com. C-LLY

 

This news release contains forward-looking statements. These statements are
subject to known and unknown risks and uncertainties that may cause actual
future experience and results to differ materially from the statements made.
Factors that might cause such a difference include, among others, the completion
of clinical trials, the FDA review processes and other governmental regulation.
United Therapeutics’ ability to successfully develop and commercialize drug
candidates, competition from other pharmaceutical companies, the ability to
effectively market

 

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products, and other factors described in Lilly’s and United Therapeutics’ most
recent filings with the Securities and Exchange Commission.  Neither Lilly nor
United Therapeutics undertakes any duty to update forward looking statements.

 

#           #          #

 

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