**Exhibit 10.6**

 

A mark of [***] in the text of this Exhibit indicates that confidentialmaterial has been omitted.

 

This Exhibit, including theomitted portions, has been filed separately with the Secretary of theSecurities and Exchange Commission pursuant to an application requestingconfidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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# **AMENDEDAND RESTATED DISTRIBUTION AGREEMENT**

 

ThisAmended and Restated Distribution Agreement (**“AGREEMENT”**)is entered into as of February 23, 2005 (the **“EFFECTIVE DATE”**) by and between MedImmune, Inc., a Delawarecorporation, having its principal place of business at One MedImmune Way,Gaithersburg, MD 20878 (**“MEDIMMUNE”**),and Abbott International LLC, a Delaware limited liability corporation (**“ABBOTT”**), having its principal place ofbusiness at 100 Abbott Park Road, Abbott Park, IL 60064.

 

**Recitals****:**

 

A.                                   ABBOTTand MEDIMMUNE entered into a Distribution Agreement, dated December 1,1997 (as amended as of April 28, 1999, October 8, 1999 and July 1,2003, the**“ORIGINAL AGREEMENT”**),for the distribution of MEDI-493 (palivizumab), a humanized antibody directedagainst respiratory syncytial virus (**“RSV”**).

 

B.                                     MEDIMMUNEand ABBOTT desire to amend the ORIGINAL AGREEMENT to include the distributionof additional humanized antibody products directed against RSV and to furtheramend and restate the ORIGINAL AGREEMENT in its entirety as set forth in thisAGREEMENT.

 

Inconsideration of the mutual promises and other good and valuable consideration,the parties hereby amend and restate the ORIGINAL AGREEMENT as follows:

 

**Agreement****:**

 

**1.****                                     ****DEFINITIONS****.**

 

Inaddition to the terms defined above and other terms defined in other Sectionsof this AGREEMENT and Exhibit 3.2, the following terms when capitalizedshall have the meanings set forth below for purposes of this AGREEMENT.

 

**1.1****                              **“AFFILIATE” shall mean any corporation orother business entity that directly or indirectly controls, is controlled by,or is under common control with a PARTY. Control means ownership or other beneficial interest in fifty percent(50%) or more of the voting stock or other voting interest of a corporation orother business entity the term,provided however that, the term shallspecifically exclude TAP Pharmaceutical Products Inc., TAP Finance Inc., andTAP Pharmaceuticals Inc.

 

**1.2****                              **“cGMP” shall mean the quality systems andcurrent good manufacturing practices for the manufacture of the PRODUCTrequired by the REGULATORY AUTHORITIES in any country in the MAJOR MARKET, asamended from time to time.

 

**1.3****                              **“CALENDAR QUARTER” shall mean the period ofthree consecutive calendar months ending on March 31, June 30, September 30or December 31 of any CONTRACT YEAR, as the case may be; provided, however,that the first CALENDAR QUARTER shall commence on the EFFECTIVE DATE hereof andshall end on March 31, 2005, and the last CALENDAR QUARTER shall commenceon the date following the last day of the immediately prior CALENDAR QUARTERand end on the date of the expiration of the TERM.

 

**1.4****                              **“COMMERCIALLY REASONABLE EFFORTS” shall meanthose efforts of a PARTY which are consistent with those utilized by such PARTYto achieve the intent and

 

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objectives of the PARTIES under this AGREEMENT ingood faith, taking into account all factors that impact the manufacturing,development, marketing and sales of the PRODUCTS, as applicable, which arecommercially reasonable in the context of the PRODUCTS and the marketplace,unless the other PARTY can demonstrate that such PARTY’s efforts deviatemeaningfully from the industry norm.

 

**1.5****                              **“CONTRACT YEAR” shall mean July 1 of acalendar year through June 30 of the following calendar year, except that,solely for the purposes of calculating the amounts due under Section 3.8,the term “CONTRACT YEAR” shall mean the 12 month period commencing on December 1of each calendar year and ending on November 30 of the immediatelyfollowing calendar year; provided, however, that the first CONTRACT YEARshall start on the EFFECTIVE DATE and end on June 30, 2005 (or November 30,in the case of Section 3.8) and that the last CONTRACT YEAR shallend on the last day this AGREEMENT remains in effect.

 

**1.6****                              **“COST OF GOODS” shall mean the fullyallocated cost to manufacture each UNIT of the PRODUCTS, determined in areasonable manner consistent with MEDIMMUNE’s normal internal accountingpractices and in accordance with generally accepted accounting principles (“GAAP”),which includes but is not limited to: (a) direct labor (salaries, wages andemployee benefits); (b) direct materials; (c) operating costs of building andequipment used in connection with the manufacture of PRODUCT; (d) allocateddepreciation and repairs and maintenance; (e) quality and in-process control;(f) an allocation of overhead costs incurred in connection with themanufacturing of PRODUCT, including: raw material supply and manufacturingadministration and management, materials management, storage and handling; andmanufacturing and employee training; (g) any charges for obsolescence, out ofdate product, spoilage, scrap or rework costs; (h) insurance costs; and (i) thecost of packaging and labeling, if applicable. To the extent that themanufacturing of the PRODUCTS is performed for MEDIMMUNE by a THIRD PARTY,amounts paid to such THIRD PARTY shall be included in COST OF GOODS in lieu ofthe items specified in (a) through (i) above. No later than sixty (60) days following the start of each CONTRACT YEARduring the TERM of this AGREEMENT, MEDIMMUNE shall provide ABBOTT, in writing,with the COST OF GOODS for each presentation of the PRODUCT that will besupplied by MEDIMMUNE.

 

**1.7****                              **“DEVELOPMENT COMMITTEE” shall have themeaning set forth in Section 6.6.

 

**1.8****                              **“FDA” shall mean the United States Food andDrug Administration and any successor regulatory authority in the United Statesof America.

 

**1.9****                              **“FIRM ORDER” shall have the meaning set forthin Section 5.1.

 

**1.10****                       **“FTE RATE” shall mean the pro rata share ofthe fully burdened cost of a sales representative, per annum, based on timespent on the promotion of NUMAX in relation to the total time spent on allproducts promoted by such sales representative, comprising of the wages,bonuses, incentives, car expenses, other detailing costs typically associatedwith the promotion of a pharmaceutical product (including, but not limited to,expenses associated with training, promotional materials, travel andentertainment) and overhead costs reasonably allocable to such activities, asapplicable in the country in the TERRITORY in which NUMAX will be co-promotedby MEDIMMUNE.

 

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**1.11****                       **“LAUNCH” shall mean the date of the firstcommercial sale of a PRODUCT sold on arm’s length terms to a THIRD PARTY byABBOTT or any of its AFFILIATES in any country within the TERRITORY after theREGULATORY APPROVAL required for the marketing and sale of such PRODUCT in suchcountry within the TERRITORY has been obtained. Sales for clinical trial purposes shall not be considered a LAUNCH.  For clarity, a LAUNCH of a PRODUCT in theTERRITORY shall only be deemed to occur once upon the first commercial sale inthe TERRITORY regardless of the number of countries in the TERRITORY in whichsuch PRODUCT is approved and marketed.

 

**1.12****                       **“MAJOR MARKET” shall mean any of thefollowing countries: [***], and, collectively, the MAJOR MARKETS, subject toadjustment as set forth in Section 14.3.

 

**1.13****                       **“NET SALES” shall mean, with respect to anyPRODUCT, that sum determined by deducting from the gross amount invoiced in theapplicable period by ABBOTT or ABBOTT’s AFFILIATES for such PRODUCT sold foruse in the TERRITORY in an arms length transaction to THIRD PARTIES: (a)transportation, importation, insurance and other handling charges to the extentincluded in the billing; (b) trade, quantity or cash discounts, to the extentallowed; (c) credits or allowances, if any, given or made on account of priceadjustments, or returns, to the extent made; (d) any and all Federal, state orlocal government rebates, whether in existence now, or enacted at any timeduring the term of this AGREEMENT, to the extent made; (e) any sales, use,value-added, excise or similar tax or other governmental charge upon ormeasured by the production, sale, transportation, delivery or use of suchPRODUCT; and (f) a reasonable allowance for bad debt; in each case determinedin accordance with ABBOTT’s normal internal accounting practices and GAAP.

 

**1.14****                       **“NUMAX” shall mean the product candidatebeing developed by MEDIMMUNE, known as of the EFFECTIVE DATE as MEDI-524,including any functional derivative, delivery form, dosage form, formulation,improvement or presentation of such product candidate developed by or on behalfof MEDIMMUNE following the EFFECTIVE DATE.

 

**1.15****                       **“PHASE III CLINICAL TRIAL” shall mean thePhase III clinical trial for NUMAX ongoing as of the EFFECTIVE DATE (designatedby MEDIMMUNE as of the EFFECTIVE DATE as STUDY #MI-CP110).

 

**1.16****                       **“PARTY” or “PARTIES” shall mean ABBOTT and/orMEDIMMUNE, as the case may be.

 

**1.17****                       **“PATENT” shall mean the patent and patentapplications listed on Exhibit 10.8, and any and all reissues,extensions, substitutions, reexaminations, supplemental protectioncertificates, continuations, continuations-in-part or divisions of or to any ofsuch patents and patent applications.

 

**1.18****                       **“PRODUCT(S)” shall mean SYNAGIS and/or NUMAX.

 

**1.19****                       **“REGISTRATION FILES” means the followingdocuments and related correspondence with REGULATORY AUTHORITIES: (a) REGULATORYFILINGS; (b) Drug Master Files  (the “DMF’s”)and Registration Dossier for the PRODUCTS; (c) labeling for all dosage forms ofthe PRODUCTS; (d) all clinical raw data concerning PRODUCT, expert reports,pre-clinical and clinical reports; (e) stability study reports; (f) existing

 

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specifications (including copies of validation of analyticalmethods); (g) formulations data included in the registration dossier for thePRODUCT; (h) any adverse event and pharmacovigilance reports; and (i) a summaryof any outstanding regulatory issues.

 

**1.20****                       **“REGULATORY APPROVAL” shall mean theapplicable technical, medical and scientific licenses, registrations,authorizations and approvals required for marketing and/or use of the PRODUCTSin each country in the TERRITORY, including, without limitation, approvals ofBiologics License Applications (BLA) or equivalent applications filed withREGULATORY AUTHORITIES in the TERRITORY, but excluding pricing, reimbursementor labeling approvals except to the extent required by a REGULATORY AUTHORITY inany country in the TERRITORY for the distribution, marketing, promotion, offerfor sale, use, import or sale of PRODUCTS. For the avoidance of doubt, an “approvable letter” (or its equivalent)issued by a REGULATORY AUTHORITY shall not be considered a REGULATORY APPROVAL.

 

**1.21****                       **“REGULATORY AUTHORITY” shall mean the FDA andany national, supra-national (e.g., the European Commission, the Council of theEuropean Union, or the European REGULATORY AUTHORITY for the Evaluation ofMedicinal Products), regional, state or local regulatory authority, department,bureau, commission, council or other governmental entity.

 

**1.22****                       **“REGULATORY FILINGS” shall mean a pre-marketapproval application and/or any other filings or dossier as may be required by REGULATORYAUTHORITIES to obtain or maintain REGULATORY APPROVALS for sale, use ormarketing of any PRODUCT.

 

**1.23****                       **“REVERSION DATE” shall mean, with respect toa REVERSION EVENT, the earlier of:  (a)[***] (or such later date on which ABBOTT declares a REVERSION EVENT inaccordance with Section 3.4), (b) [***] years after the date ofoccurrence of a REVERSION EVENT defined in Sections 3.4 (a)(i) through (iv),or (c) the first date after occurrence of a REVERSION EVENT defined in Section 3.4(a)(v).

 

**1.24****                       **“REVERSION EVENT” shall have the meaning setforth in Section 3.4.

 

**1.25****                       **“SPECIFICATIONS” shall mean the writtenspecifications for ingredients, composition, sampling,  test procedures, process descriptions,in-process criteria, final release criteria and other information relating toeach of the PRODUCTS.  The currentSPECIFICATIONS for the lyophilized formulation of SYNAGIS are attached as ExhibitA-1, the SPECIFICATIONS for the liquid formulation of SYNAGIS are attachedas Exhibit A-2 and the SPECIFICATIONS for NUMAX are attached at ExhibitA-3.

 

**1.26****                       **“SYNAGIS” shall mean any and all formulationsof the humanized antibody product known as palivizumab that is marketed in theTERRITORY as of the EFFECTIVE DATE under the trademark Synagis®, and waspreviously known as MEDI-493.

 

**1.27****                       **“TERRITORY” shall mean all countries of theworld except the United States of America and its territories, possessions andcommonwealths, subject to adjustment as set forth in Section 14.3.

 

**1.28****                       **“THIRD PARTY” shall mean a party other thanABBOTT, MEDIMMUNE or their respective AFFILIATES.

 

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**1.29****                       **“THIRD PARTY MANUFACTURER” shall mean, forSYNAGIS, as of the EFFECTIVE DATE, Boehringer Ingelheim, or such other partythat MEDIMMUNE appoints following the EFFECTIVE DATE for the manufacture ofeach of the finished PRODUCTS, in accordance with Section 7.8.

 

**1.30****                       **“TRADEMARK” shall mean the trademark(s) foreach of the PRODUCTS (with ownership determined in accordance with Section 10).

 

**1.31****                       **“UNIT” shall mean a 50 mg vial, a 100 mg vialor other presentation of one or more of the PRODUCTS approved from time to timeby the Manufacturing Steering Committee. For the purpose of any pricecalculations under this AGREEMENT, a UNIT shall be deemed to be a 100 mgequivalent vial of PRODUCT (e.g., a 50 mg vial would be equal to a 0.5 100 mgequivalent vial).

 

**1.32****                       **“VACCINE” shall mean one or more biologicaland/or chemical materials that is or are designed to elicit an immune responsein humans.

 

**2.****                                     ****GRANT OF RIGHTS****.**

 

**2.1**                               **APPOINTMENT AND ACCEPTANCE**.

 

(a)                                  During the TERM of this AGREEMENT, MEDIMMUNEhereby appoints ABBOTT as the exclusive distributor of each of the PRODUCTS inthe TERRITORY.  In connection with suchappointment, except as set forth in Section 9, ABBOTT shallexclusively conduct the marketing, promotion, sale and distribution of: (i)NUMAX for use in the prevention or treatment of all human, prophylactic andtherapeutic, approved indications in any country within the TERRITORY(including all indications for which NUMAX is approved following the EFFECTIVEDATE in any country within the TERRITORY), and (ii) SYNAGIS for use in theprevention of RSV.  For the avoidance ofdoubt, ABBOTT’s appointment as the exclusive distributor means that, except asspecifically provided otherwise in this AGREEMENT, MEDIMMUNE shall neither itself,directly or indirectly, market, promote, sell or distribute nor grant a THIRDPARTY any right to market, promote, sell or distribute in any country withinthe TERRITORY: (x) NUMAX for any human, prophylactic and therapeuticindication, or (y) SYNAGIS for the prevention of RSV.

 

(b)                                 ABBOTT hereby accepts the appointment as theexclusive distributor of the PRODUCTS as set forth in Section 2.1(a).  In connection with such appointment, ABBOTTagrees that following REGULATORY APPROVAL of a PRODUCT in each country of theTERRITORY, ABBOTT shall use its COMMERCIALLY REASONABLE EFFORTS to market,promote, sell and distribute at least one PRODUCT in each such country and, ifNUMAX is approved in a particular country, then to the extent commerciallyviable (considering such factors as the breadth of the NUMAX label compared tothe SYNAGIS label, the relative adverse event profile of each and the relativereimbursement rates of each), ABBOTT shall use its COMMERCIALLY REASONABLEEFFORTS to market, promote, sell and distribute NUMAX in any such countries.

 

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(c)                                  For clarity, MEDIMMUNE agrees that, followingthe LAUNCH of NUMAX in any country in the TERRITORY, for as long as ABBOTT isactively distributing, marketing, promoting and selling NUMAX in such country,ABBOTT shall, in its sole discretion, have the right to cease the marketing,promotion, sale and distribution of SYNAGIS in such country upon written noticeto MEDIMMUNE and subject to the transition provisions of Section 5.2.  ABBOTT’s failure to market, promote, sell ordistribute SYNAGIS in any country in the TERRITORY during the active sale anddistribution of NUMAX in such country shall not entitle MEDIMMUNE to terminateABBOTT’s exclusive rights to SYNAGIS in such country under Section 14.3(c)(i)and shall not entitle MEDIMMUNE to itself market, promote, sell or distributeSYNAGIS for the prevention of RSV in any such country or grant any right tomarket, promote, sell or distribute SYNAGIS for the prevention of RSV in anysuch country to any THIRD PARTY.

 

(d)                                 ABBOTT hereby warrants and agrees as follows:(i) ABBOTT will only sell product for the treatment or prevention of RSV(including any indication for which NUMAX is approved in the future) in theTERRITORY which is purchased from MEDIMMUNE; (ii) ABBOTT will only sell anddistribute product for the treatment or prevention of RSV (including anyindication for which NUMAX is approved in the future) in the TERRITORY as towhich ABBOTT maintains distribution rights under this AGREEMENT; (iii) ABBOTTwill sell and distribute the PRODUCTS in accordance with the terms andconditions of this AGREEMENT; (iv) ABBOTT will sell each PRODUCT in theTERRITORY under the TRADEMARK applicable to such PRODUCT and only as purchasedfrom MEDIMMUNE; and (v) to the extent commercially reasonable, ABBOTT will sellall PRODUCTS in its inventory on a first-in, first-out basis (i.e., UNITS ofPRODUCT closest to their expiration date will be sold first).

 

(e)                                  ABBOTT agrees that neither ABBOTT nor anAFFILIATE of ABBOTT shall manufacture, promote, market or sell, directly orindirectly, or assist any THIRD PARTY in marketing or selling in the TERRITORY,any [***].  These restrictions will apply during the term of the AGREEMENTand for [***] after the termination or expiration of the AGREEMENT, except inthe European Union, where the duration of the restriction is limited to [***]from the date of entry into force of the AGREEMENT.  Notwithstanding theforegoing, the restrictions set forth in the preceding two sentences shall notbe applicable in any countries in the TERRITORY to the extent such restrictionsare not permitted under applicable law, but if ABBOTT or an AFFILIATE of ABBOTTpromotes, markets, sells or distributes any [***] in such countries, MEDIMMUNEshall have the sole right to either terminate this AGREEMENT or seek torenegotiate the terms of this AGREEMENT in light of the applicable antitrustlaws and regulations (in which case ABBOTT will negotiate in good faith an appropriateamendment to this AGREEMENT).

 

(f)                                    ABBOTT agrees and acknowledges that neitherABBOTT nor its AFFILIATES has been granted any rights by MEDIMMUNE (eitherunder this AGREEMENT or otherwise) to research, manufacture, develop, market,promote, sell or distribute NUMAX outside of the TERRITORY or SYNAGIS outsideof the TERRITORY, except, in the case of SYNAGIS, pursuant to the terms of that

 

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certain Co-Promotion Agreement, dated as of November 26,1997, by and between MEDIMMUNE and Abbott Laboratories (through its RossProducts Division), as amended.

 

**2.2****                              ****NON-DIVERSION AND BUNDLING**. Notwithstanding the foregoing provisions of Section 2.1, tothe extent permitted by applicable law, ABBOTT agrees that ABBOTT and itsAFFILIATES will not sell any of the PRODUCTS to any THIRD PARTY if ABBOTT (orits AFFILIATES) knows or has reason to believe that the PRODUCT will be re-soldor exported outside of the TERRITORY by such THIRD PARTY.  If, after sale of the PRODUCT to a THIRDPARTY, ABBOTT (or its AFFILIATES) learns or reasonably suspects (based oninformation obtained from MEDIMMUNE or a THIRD PARTY) that such PRODUCT wasre-sold or exported outside of the TERRITORY, ABBOTT agrees to provide promptwritten notice to MEDIMMUNE (except to the extent such information wasinitially provided by MEDIMMUNE) and make (or cause its AFFILIATES to make)reasonable efforts to obtain assurance from such THIRD PARTY that it will notdivert the sale of the PRODUCT outside the TERRITORY.  If such assurance cannot be timely obtained,ABBOTT shall, if permitted under local laws, cease (or cause its AFFILIATES tocease) further sales of all PRODUCTS to such THIRD PARTY until reasonableassurance has been obtained from such THIRD PARTY that it will cease its resaleor export activities with respect to such PRODUCT.  ABBOTT agrees that, with respect to itsprocedures related to limiting resale or export of the PRODUCTS by THIRDPARTIES, in addition to the foregoing, ABBOTT will treat the PRODUCTS similarlyto other ABBOTT products.  Furthermore,the PARTIES agree that if, despite the foregoing, the resale or export of thePRODUCTS by THIRD PARTIES results in significant negative economic consequencesto MEDIMMUNE, the PARTIES will meet in good faith to negotiate an appropriateresolution to the situation.

 

ABBOTT will not, without MEDIMMUNE’S writtenconsent, (a) discount the selling price of any PRODUCT in order to promote thesales of other products of ABBOTT, or (b) bundle the PRODUCTS for sale with anyother products (including other PRODUCTS). ABBOTT agrees that in all cases it will conduct all price negotiationsin good faith on an arms length basis.

 

**2.3****                              ****LABELING AND PACKAGING**. ABBOTT shall prepare all labeling, packaging and package inserts forPRODUCTS in conformity with regulatory guidelines in each country of theTERRITORY, which labeling shall clearly indicate that the PRODUCT ismanufactured by or on behalf of MEDIMMUNE and is being distributed by ABBOTT,to the extent that such statements are allowed under the applicable laws andregulations in any particular country of the TERRITORY.

 

ABBOTT shall submit the company core datasheet(CCDS) and packaging to be used for PRODUCT in the MAJOR MARKETS to MEDIMMUNEfor approval, which approval shall not unreasonably be withheld. If theproposed local labeling for a country in a MAJOR MARKET: (a) is materiallychanged from the CCDS previously approved by MEDIMMUNE  pursuant to this Section 2.3, (b)is approved for such country more than two (2) CONTRACT YEARS earlier, or (c)is reasonably requested to be submitted for review by MEDIMMUNE (providedhowever that, MEDIMMUNE may make such request to review no more than onceannually), ABBOTT shall submit such labeling to MEDIMMUNE for approval, whichapproval shall not unreasonably be withheld. In all cases, MEDIMMUNE shall bedeemed to have approved such submitted labeling, packaging or packaging insertsunless MEDIMMUNE provides ABBOTT written

 

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objection or approval thereto within twenty (20)days after receipt thereof, but in no event later than ten (10) days prior toany applicable regulatory deadline (assuming timely notification by ABBOTT atleast thirty (30) days before such deadline).

 

**2.4**                               **SUBDISTRIBUTORS**. ABBOTT agrees not to sell the PRODUCTS through subdistributors withoutthe written consent of MEDIMMUNE, which consent shall not be unreasonablywithheld. If such consent is granted, ABBOTT shall remain fully liable andresponsible to MEDIMMUNE for the activities of a subdistributor appointed byABBOTT and will monitor any subdistributors to ensure that such subdistributorsactions are not inconsistent with the obligations of ABBOTT under thisAGREEMENT.

 

**2.5****                              ****RIGHT OF FIRST OFFER****. **If at any time during the TERM,MEDIMMUNE develops and has marketing rights to [***] (**“COMPETING PRODUCT”**)and MEDIMMUNE desires to grant rights to distribute a COMPETING PRODUCT in oneor more countries of the TERRITORY, then MEDIMMUNE shall first notify ABBOTT inwriting that it is seeking to appoint such a distributor and if, within thirty(30) days after such written notice, ABBOTT notifies MEDIMMUNE in writing thatABBOTT is interested in becoming that distributor, then MEDIMMUNE and ABBOTTshall negotiate in good faith the terms and conditions of a distributionagreement for such COMPETING PRODUCT in such countries.  If the PARTIES do not reach agreement as tothe terms and conditions of such a distribution agreement within sixty (60)days after MEDIMMUNE receives such written notice from ABBOTT or ABBOTT doesnot notify MEDIMMUNE in writing of ABBOTT’s interest within the thirty (30) dayperiod after the written notice from MEDIMMUNE, then MEDIMMUNE may grant suchrights to a THIRD PARTY.  Notwithstandingthe foregoing, in the event the PARTIES were unable to reach an agreement as tothe terms and conditions, MEDIMMUNE shall not offer such appointment to a THIRDPARTY on  terms and conditions that are,on the whole, more favorable considering the economic value of the transaction,without first offering such terms and conditions to ABBOTT.  Neither PARTY shall have the obligation toenter into an agreement with respect to distribution of a COMPETING PRODUCT andneither shall have liability for failing to enter into any such agreement.  Notwithstanding anything in this Section 2.5to the contrary, MEDIMMUNE may, itself, distribute a COMPETING PRODUCT in theTERRITORY through local wholesale distribution channels without first offeringdistribution rights to ABBOTT under this Section 2.5, provided thatany THIRD PARTY appointed by MEDIMMUNE for such local distribution shall notmarket or promote the PRODUCT in the TERRITORY.

 

**3.****                                     ****PURCHASE OF PRODUCTS**

 

**3.1**                               (a)                                  **REQUIREMENTS**. Subject to the terms and conditions of this AGREEMENT, during  the TERM of this AGREEMENT, MEDIMMUNE shallsell exclusively to ABBOTT and ABBOTT shall purchase, exclusively fromMEDIMMUNE, ABBOTT’s requirements of each PRODUCT for sale in theTERRITORY.  ABBOTT shall pay the pricefor such PRODUCT as set forth in Section 3.2.

 

(b)                                 **SUPPLY PLANNING**. Subject to the availability of PRODUCT fromMEDIMMUNE, ABBOTT shall maintain sufficient inventories of PRODUCT to enableABBOTT to effectively satisfy demand for PRODUCT in the TERRITORY.  Subject to Section 3.6, MEDIMMUNEshall use COMMERCIALLY REASONABLE EFFORTS to establish and maintain amanufacturing schedule and inventory on-hand of each PRODUCT sufficient to

 

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supply ABBOTT’s demands of such PRODUCT, in 50 mgand 100 mg presentations (or any other presentations that may be approved bythe Manufacturing Steering Committee) as set forth in the forecasts submittedby ABBOTT in accordance with the terms of Section 5 hereof.

 

**3.2****                              ****PRODUCT PRICE**. Certain definitions related to this Section 3.2 are setforth in Exhibit 3.2 which is hereby incorporated by reference.

 

(a)                                  **INVOICE/PAYMENT**. MEDIMMUNE shall invoice ABBOTT for all PRODUCT delivered by MEDIMMUNE tothe carrier and ABBOTT shall pay MEDIMMUNE for such PRODUCT, all in accordancewith this Section 3.2.  Theinvoice amount shall be denominated in U.S. Dollars.  MEDIMMUNE shall forward all invoices forPRODUCT ordered hereunder to a U.S. location as designated by ABBOTT.  The invoice submitted by MEDIMMUNE shallinclude a statement of the royalties owed by MEDIMMUNE to THIRD PARTIES on thePRODUCT for the purposes of determining the BASE PRICE.

 

(b)                                 **MINIMUM PRICE/INVOICE PRICE**.  Noearlier than delivery of PRODUCT to the carrier, MEDIMMUNE shall invoice ABBOTTat the MINIMUM PRICE for such PRODUCT multiplied by the number of UNITSof PRODUCT delivered to the carrier, and ABBOTT shall pay MEDIMMUNE the totalamount shown on such invoice (the “INVOICE PRICE”) within forty-five (45) daysafter the date of invoice.  The MINIMUMPRICE shall be non-refundable.

 

(c)                                  **FINAL PRICE**. Within forty-five (45) days after the end of each CALENDAR QUARTER,ABBOTT shall pay MEDIMMUNE (without the need for any further invoice) thedifference between (i) the aggregate FINAL PRICE and (ii) the aggregate INVOICEPRICE for all UNITS of PRODUCT sold by ABBOTT during such CALENDAR QUARTER plusthe aggregate amount, if any, paid by ABBOTT for FIRST SEASON PRE-APPROVALPRODUCT in connection with REGULATORY APPROVAL and in accordance with Section 3.2(e).  For any CALENDAR QUARTER, if the aggregateINVOICE PRICE for all PRODUCT sold by ABBOTT during that CALENDAR QUARTER (asdetermined by specific identification) plus the aggregate amount, ifany, paid by ABBOTT for FIRST SEASON PRE-APPROVAL PRODUCT in connection withREGULATORY APPROVAL and in accordance with Section 3.2(e) isgreater than the aggregate FINAL PRICE for all PRODUCT sold by ABBOTT duringthat CALENDAR QUARTER, then ABBOTT shall forfeit the excess amount paid.  This determination will be conducted withspecific identification of and separate calculation of each inventory layer andeach UNIT type.  For clarity, thecalculation of FINAL PRICE will not include SAMPLES (i.e., ABBOTT shall only beobligated to pay the INVOICE PRICE for such SAMPLES).

 

(d)                                 **EXPIRED, UNSOLD PRODUCT**.  On December 15of each CONTRACT YEAR and within forty-five (45) days of the last day of theTERM, ABBOTT shall pay MEDIMMUNE (without the need of any further invoice), thedifference between the FINAL PRICE and the INVOICE PRICE for all UNITS ofPRODUCT not sold by ABBOTT that expired during the period between October 1of the previous CONTRACT YEAR and September 30 of the subject CONTRACTYEAR (or the last day of the TERM in the case of the last CONTRACT YEAR), otherthan FIRST SEASON PRE-APPROVAL

 

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PRODUCT.  Ifthe INVOICE PRICE is greater than the FINAL PRICE, then ABBOTT shall forfeitthe excess amount paid.  This paymentshall include a report with respect to the expired vials for the applicableperiod.

 

(e)                                  **FIRST SEASON PRE-APPROVALPRODUCT**.  Within thirty (30) days after receipt ofREGULATORY APPROVAL in any country in the MAJOR MARKETS, for all FIRST SEASONPRE-APPROVAL PRODUCT that has not expired and has a remaining shelf life as ofthe time of REGULATORY APPROVAL of [***] or greater, ABBOTT shall pay MEDIMMUNEthe difference between (a) the INVOICE PRICE ABBOTT would have been obligatedto pay to MEDIMMUNE had such PRODUCT initially not been designated FIRST SEASONPRE-APPROVAL PRODUCT and (b) the INVOICE PRICE initially paid by ABBOTT forsuch PRODUCT.  The additional paymenttogether with the initial payment shall be deemed to be the aggregatenonrefundable minimum price for the applicable PRODUCT.  With respect to FIRST SEASON PRE-APPROVALPRODUCT that has a remaining shelf life as of the time of REGULATORY APPROVALof less than [***], ABBOTT shall have no payment obligation upon receipt ofREGULATORY APPROVAL, but if such PRODUCT is sold by ABBOTT, then ABBOTT shallpay MEDIMMUNE the FINAL PRICE less the INVOICE PRICE for such PRODUCT in theCALENDAR QUARTER in which it is sold in accordance with Section 3.2(c).With respect to FIRST SEASON PRE-APPROVAL PRODUCT that, as of the time ofREGULATORY APPROVAL,  has expired or hasa remaining shelf life of less than [***] and is not subsequently sold byABBOTT, ABBOTT shall have no payment obligations to MEDIMMUNE other than theINVOICE PRICE paid for such PRODUCT in accordance with Section 3.2(b).

 

(f)                                    **FOREIGN EXCHANGE CALCULATION**. Whenever conversion from any currency into U.S. Dollars shall berequired under this AGREEMENT (e.g., for the determination of NET SALES), suchconversion shall be completed for each month of the CALENDAR QUARTER as follows:  the value to be converted shall be calculatedwith respect to each country in local currency and then converted into U.S.dollars based on the average rate of exchange for that month (based on dailynoon buying rates for cable transfers in New York City certified for customspurposes by the Federal Reserve Bank of New York, available on the website forthe Board of Governors of the Federal Reserve System (or any successorentity)).  In connection with its paymentobligations each CALENDAR QUARTER, ABBOTT will provide electronically toMEDIMMUNE a detailed reconciliation, in form and substance reasonablyacceptable to MEDIMMUNE, showing the rates used, confirming the source of therates used and the conversion calculations.

 

(g)                                 **NET SALES DOCUMENTATION**.  Witheach quarterly payment, ABBOTT shall deliver to MEDIMMUNE a full and accurateaccounting to include at least the following information:

 

(i)                                     Quantity of each PRODUCT sold and/orwithdrawn by transaction type (by country, by month) by ABBOTT and its AFFILIATES.

 

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(ii)                                  Total amount invoiced for each PRODUCT (bycountry, by month) in local currency.

 

(iii)                               Calculation of NET SALES (by country, bymonth) in local currency for each PRODUCT.

 

(iv)                              Exchange rates for converting each localcurrency into U.S. Dollars showing the source conversion rates used inaccordance with Section 3.2(f) for each month of the CALENDARQUARTER.

 

(v)                                 NET SALES in U.S. dollars in each country foreach PRODUCT.

 

(vi)                              Total compensation payable to MEDIMMUNE; orto be credited to ABBOTT in accordance with Section 3.2(e).

 

(h)                                 **INVENTORY RECONCILIATIONREPORT**.  Within forty-five (45) days following the endof each CONTRACT YEAR, ABBOTT shall provide MEDIMMUNE an inventory reconciliationfor such CONTRACT YEAR.

 

(i)                                     **ABBOTT BOOKS AND RECORDS**. ABBOTT shall keep, and shall cause each of its AFFILIATES to keep fulland accurate books of account containing all particulars that may be necessaryfor the purpose of calculating all payments payable to MEDIMMUNE. Such books ofaccount shall be kept at their principal place of business and, with allnecessary supporting data shall, for the next two (2) years following the endof the calendar year to which each shall pertain be open for inspection by anindependent certified accountant selected by MEDIMMUNE and reasonablyacceptable to ABBOTT upon reasonable notice during normal business hours, atMEDIMMUNE’s expense, for the sole purpose of verifying payments or compliancewith this AGREEMENT, but in no event more than once in each calendar year. Allinformation and data offered shall be used only for the purpose of verifyingpayments.  The independent certifiedpublic accountant performing any such audit shall not disclose to MEDIMMUNE orto any other Person any confidential information of ABBOTT or any of itsAFFILIATES.  The independent certifiedpublic accountant shall report to MEDIMMUNE only the results of such audit andonly such underlying facts as is necessary to explain the results of suchaudit.  In the event that such inspectionshall indicate that in any CONTRACT YEAR that the payments which should havebeen paid by ABBOTT are at least five percent (5%) greater than those whichwere actually paid by ABBOTT, then ABBOTT shall pay the cost of suchinspection. All underpayments are immediately due and payable.

 

(j)                                     **PRODUCT EXPIRATION**.  Allexpired PRODUCT in ABBOTT’s possession shall be immediately destroyed byABBOTT, at ABBOTT’s expense, and evidence of such destruction shall be sent toMEDIMMUNE.

 

(k)                                  **REPORTS**. Within forty-five (45) days following the end of each CALENDAR QUARTER,as part of the report under Section 3.2(c), ABBOTT shall provide toMEDIMMUNE a written country-by-country and PRODUCT-by-PRODUCT report of theinventory and sales of each PRODUCT during each month of such CALENDAR QUARTER.

 

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(l)                                     **MEDIMMUNE BOOKS AND RECORDS**. MEDIMMUNE shall keep, and shall cause each of its AFFILIATES to keepfull and accurate books of account containing all particulars that may benecessary for the purpose of calculating all THIRD PARTY royalties on thePRODUCT owing and/or paid by MEDIMMUNE and the calculation of the COST OFGOODS.  Such books of account shall bekept at their principal place of business and, with all necessary supportingdata shall, for the next two (2) years following the end of the calendar yearto which each shall pertain be open for inspection by an independent certifiedpublic accountant selected by ABBOTT and reasonably acceptable to MEDIMMUNEupon verifying such royalties or compliance with this AGREEMENT, but in noevent more than once in each calendar year. All information and data offered shall be used only for such purpose.  The independent certified public accountantperforming any such audit shall not disclose to ABBOTT or to any other Personany confidential information of MEDIMMUNE or any of its AFFILIATES.  The independent certified public accountantshall report to ABBOTT only the results of such audit and only such underlyingfacts as is necessary to explain the results of such audit.  In the event that such inspection shallindicate that in any CONTRACT YEAR, the THIRD PARTY royalties reported as owedand/or paid by MEDIMMUNE  or thecalculation of the COST OF GOODS are at least five percent (5%) greater thanthose which were actually owed and/or paid by MEDIMMUNE, then MEDIMMUNE shallpay the cost of such inspection.  Allamounts reported as owed and/or paid for THIRD PARTY royalties which are inexcess of the amounts actually owed and/or paid by MEDIMMUNE on the PRODUCTshall immediately be credited against any and all amounts due and owing byABBOTT to MEDIMMUNE under this AGREEMENT.

 

**3.3****                              ****[Reserved.]**

 

**3.4****                              ****REVERSION EVENT**.

 

(a)                                  **REVERSION EVENT**.  AREVERSION EVENT will be deemed to have occurred if:

 

(i)                                     MEDIMMUNE is required by a REGULATORYAUTHORITY in any country in the MAJOR MARKETS to discontinue due to a safetyconcern or other reason beyond the control of MEDIMMUNE, the development ofNUMAX prior to obtaining REGULATORY APPROVAL for NUMAX in such country; provided,however, that, a suspension of development activities for the purpose ofredesigning the protocols in response to a regulatory request or action shallnot be considered a discontinuation of development for purposes of thissubsection;

 

(ii)                                  the PARTIES mutually agree in writing thatthe development of NUMAX should be discontinued prior to the filing forREGULATORY APPROVAL of NUMAX in any country in the MAJOR MARKET due to materialadverse deviations from the anticipated safety profile for NUMAX that arise orbecome known to either PARTY after the EFFECTIVE DATE;

 

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(iii)                               [***]: (A) NUMAX has not received REGULATORYAPPROVAL in at least [***] of the MAJOR MARKETS, and (B) all pivotal clinicaltrials for NUMAX in all countries of the MAJOR MARKETS, including but notlimited to the PHASE III CLINICAL TRIAL, have been terminated;

 

(iv)                              the PHASE III CLINICAL TRIAL is stoppedvoluntarily by MEDIMMUNE; provided, however, that, a suspension of the PHASEIII CLINICAL TRIAL for the purpose of redesigning the protocols in response toa regulatory request or action shall not be considered a stoppage of the PHASEIII CLINICAL TRIAL for purposes of this subsection;

 

(v)                                 the PHASE III CLINICAL TRIAL is (A)permanently discontinued or (B) suspended and reasonably estimated to bedelayed for more than [***] from the date of suspension as a result of actionor inaction by a THIRD PARTY or by MEDIMMUNE, in either case as a result ofgross negligence or willful misconduct by MEDIMMUNE in the execution of (butnot the design, analysis, interpretation or any other aspect of) the PHASE IIICLINICAL TRIAL (e.g., for failure to pay the necessary clinical researchorganization(s) to complete the trial).

 

Notwithstanding the foregoing, in the event that thePHASE III CLINICAL TRIAL is ongoing on or after [***] and NUMAX has not beenapproved in at least [***] of the MAJOR MARKETS, then at any time after [***],subject to the limitation in Section 3.4(b), ABBOTT shall have thesole discretion to declare a REVERSION EVENT upon ninety (90) days writtennotice to MEDIMMUNE.

 

With respect to Section 3.2(a)(v) above,a REVERSION EVENT shall only be deemed to have occurred upon a finding of grossnegligence or willful misconduct by a court of competent jurisdiction (or inaccordance with the alternate dispute resolution mechanism set forth providedfor in Section 15.7).  If, asa result, a REVERSION EVENT has been deemed to have occurred and MEDIMMUNEcures the cause of the discontinuation or delay within one (1) year followingthe occurrence of such REVERSION EVENT, then no later than forty-five (45) daysafter any notice of cure, ABBOTT shall have the right, in its sole discretionand with written notice to MEDIMMUNE, to declare that a REVERSION EVENT did nottake place, in which case ABBOTT’s rights to NUMAX shall be reinstated as ifsuch REVERSION EVENT had not occurred and the FINAL PRICE from that pointforward shall also be calculated as if a REVERSION EVENT had not occurred.  In addition, no later than thirty (30) daysafter the reinstatement of ABBOTT’s rights hereunder, ABBOTT shall payMEDIMMUNE [***] of the total amount of any excess of the FINAL PRICE that wouldhave been paid if the REVERSION EVENT had not occurred over the total amount ofthe FINAL PRICE that was actually paid during the period that such REVERSIONEVENT existed.

 

(b)                                 **LIMITATION ON REVERSIONEVENT**.  Notwithstanding anything Section 3.4(a)to the contrary, if, upon receipt of REGULATORY APPROVAL in [***] of the MAJORMARKETS a REVERSION EVENT has not previously occurred or been declared, thenfor the remainder of the TERM this Section 3.4 shall be

 

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deemed null and void (i.e., there shall not be aREVERSION EVENT at any time thereafter).

 

**3.5****                              ****REASONABLE EFFORTS TO SUPPLY**. Subject to this Section 3.5 and Section 5.2,MEDIMMUNE agrees to use its COMMERCIALLY REASONABLE EFFORTS to supply ABBOTTwith ABBOTT’s requirements of each of the PRODUCTS for sale to customers in theTERRITORY.  Following the LAUNCH of NUMAXin any country in the TERRITORY, MEDIMMUNE shall continue to supply SYNAGIS toABBOTT for sale in all countries in the TERRITORY in which the relevant REGULATORYAUTHORITIES have refused to permit ABBOTT to remove SYNAGIS from the market orin which the transition of the market from SYNAGIS to NUMAX has not, in ABBOTT’sdetermination after consultation with the Manufacturing Steering Committee,been completed.  ABBOTT shall useCOMMERCIALLY REASONABLE EFFORTS to discontinue older PRODUCTS or formulationsof PRODUCTS (including, but not limited to, the lyophilized formulation ofSYNAGIS) or to transition from one PRODUCT to another as such new formulationsor PRODUCTS are made available by MEDIMMUNE per the direction of theManufacturing Steering Committee.

 

**3.6****                              ****SHORTAGE AND ALLOCATION**. MEDIMMUNE’s obligation to supply PRODUCT under Section 3.1hereof shall at all times be subject to the condition that MEDIMMUNE is able toobtain or make a sufficient supply of such PRODUCT for sale both inside andoutside of the TERRITORY. In the event that PRODUCT available to MEDIMMUNE isin short supply, MEDIMMUNE shall notify ABBOTT of such shortage as soon aspossible. In the event there is a short supply of PRODUCT and MEDIMMUNE cannotsupply PRODUCT to ABBOTT in an amount equal to ABBOTT’s FIRM ORDER, thenMEDIMMUNE shall allocate available PRODUCT to ABBOTT in each month that such ashortfall exists (and in each month thereafter until the shortfall to ABBOTT isremedied) in an amount equal to the product of (a) the amount of availablePRODUCT for that month and (b) a fraction the numerator of which is (1) theaggregate quantity of FIRM ORDERS made by ABBOTT over the subsequent [***]period including the shortfall month and the denominator of which is (2) thesum of (x) the aggregate quantity of FIRM ORDERS made by ABBOTT over thesubsequent [***] period including the shortfall months and (y) the aggregatequantity of PRODUCT over the same [***] period required by MEDIMMUNE outsidethe TERRITORY by reference to FIRM ORDERS placed with THIRD PARTY MANUFACTURERSfor MEDIMMUNE’s requirements and the amount to be produced at a MEDIMMUNEfacility for MEDIMMUNE’s requirements, in each case outside the TERRITORY.  Notwithstanding the foregoing, provided thatABBOTT has previously requested or consented in writing to the discontinuationof a PRODUCT in one or more countries of the TERRITORY, MEDIMMUNE will not berequired to provide such PRODUCT in such countries for the remainder of theTERM.

 

**3.7****                              ****[Reserved.]**

 

**3.8****                              ****MINIMUM SALE THRESHHOLD**. Notwithstanding anything to the contrary herein, in the event that theNET SALES of all PRODUCTS in the TERRITORY fails to exceed [***] in any CONTRACTYEAR, unless ABBOTT pays to MEDIMMUNE, within thirty (30) days following theend of the CONTRACT YEAR, [***] of the difference between [***] and the NETSALES achieved by ABBOTT, MEDIMMUNE may, at its sole discretion, convert theexclusive rights granted herein to non-exclusive rights in the TERRITORY.

 

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The PARTIES agree that the [***] minimum salesthreshold referenced in the preceding paragraph will be reduced as follows inthe event that ABBOTT’s rights to a PRODUCT in one or more countries areterminated pursuant to Section 14.3:

 

(a)                                  if ABBOTT terminates its right to Canada, theminimum sales threshold will be reduced by [***];

 

(b)                                 if ABBOTT terminates its right to all of thecountries of the European Union, the minimum sales threshold will be reduced by[***]; and

 

(c)                                  if ABBOTT terminates its right to Japan, theminimum sales threshold will be reduced by [***].

 

(b)                                 ABBOTT shall be excused from its minimumsales obligations under this Section 3.8 with respect to anyCONTRACT YEAR in which the failure to meet such minimum sales requirement isrelated to: (i) a failure by MEDIMMUNE to fill ABBOTT’s FIRM ORDERS during suchCONTRACT YEAR, (ii) MEDIMMUNE’s failure to promptly replace material quantitiesof defective or non-conforming PRODUCT, or (iii) as a result of a THIRD PARTYselling a product in the TERRITORY which infringes a granted patent in theTERRITORY which is based on Patent Cooperation Treaty Application [***] and thenet sales of the infringing THIRD PARTY product is [***] of ABBOTT’s NET SALESof PRODUCT in the TERRITORY in the applicable CONTRACT YEAR; provided, howeverthat, if ABBOTT’s failure to meet such obligations is not wholly due to a causeset forth in subsections (i), (ii) or (iii) above, then applicable minimumsales obligation threshold will be prorated to the extent such cause impairedABBOTT’s ability to meet its obligations.

 

**4.****                                     ****DELIVERY, PAYMENT AND RISKOF LOSS**

 

**4.1**                               (a)                                  **CURRENCY**.  Allpayments under this AGREEMENT shall be remitted in immediately available funds.Unless otherwise agreed between the PARTIES all payments shall be in U.S.Dollars.

 

(b)                                 **LATE FEES**.  Inthe event that any payment due hereunder is not made when due, the paymentshall accrue interest beginning on the first day of the month following thedate when such payment was due, calculated at the annual rate of the sum of (i)two percent (2%) plus (ii) the prime interest rate quoted by Citibank, N.A.,New York, New York, on the date such payment is due, or on the date payment ismade, whichever is higher, the interest being compounded on the last day ofeach calendar month; provided that in no event shall said annual rate exceedthe maximum legal interest rate for corporations. Such payment when made shallbe accompanied by all interest accrued. Said interest and the payment and acceptance thereof shall not negate orwaive the right of MEDIMMUNE to any other remedy, legal or equitable, to whichMEDIMMUNE may be entitled because of the delinquency of the payment.

 

**4.2**                               **TITLE AND RISK OF LOSS**. Title to PRODUCT sold hereunder, and risk of loss with respect to suchPRODUCT, shall pass to ABBOTT upon delivery of the PRODUCT to a carrierdesignated by ABBOTT at the place at which the PRODUCT is manufactured or

 

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stored. Upon the passage of title, MEDIMMUNE’sliability with respect to risk of loss shall cease, and ABBOTT shall be theowner of such PRODUCT for all purposes, including, without limitation, themarketing, sale and setting of prices for the PRODUCT sold by ABBOTT to itscustomers.  ABBOTT shall, in writing,provide MEDIMMUNE with instructions regarding the  delivery destination for each order of thePRODUCT and MEDIMMUNE shall arrange the shipment of each order in accordancewith such instructions. ABBOTT shall be responsible for the cost of freight andinsurance with respect to each shipment of the PRODUCTS.

 

**4.3**                               **CONFLICTING TERMS**.  Noprovision on ABBOTT’s purchase order forms which may purport to impose differentconditions upon the parties hereto shall modify the terms of this AGREEMENT.

 

**5.****                                     ****FORECASTS AND ORDERS**

 

5.1                                 (a)                                  **FORECASTS**. ABBOTT shall provide MEDIMMUNE, on or before the tenth day of the lastmonth of each CALENDAR QUARTER, with a three-year product forecast planninghorizon for each PRODUCT.   The rollingforecasts are to be broken down to single months and shall include theanticipated quantity of PRODUCT in terms of the formulation and presentation ofeach PRODUCT. The forecasts for each PRODUCT within the first year (months 1through 12) are FIRM ORDERS and cannot be changed and the forecasts for thesecond year (month 13 through 24) are partly binding forecasts which means thatthe forecasts can be changed within this period. The forecasts can be increasedin consultation with the Manufacturing Steering Committee, but are limited tothe following restrictions when decreased:

 
| [***] |   | [***] |   |
|-------|--------|-------|--------|
| [***] |   | [***] |   |
| [***] |   | [***] |   |
| [***] |   | [***] |   |

 

The forecast for the third year (months 25-36) is anon-binding forecast.

 

Notwithstanding the foregoing, in the event thatMEDIMMUNE assumes the manufacture of any PRODUCT that is, as of the EFFECTIVEDATE, manufactured by a THIRD PARTY MANUFACTURER, the PARTIES shall discuss, ingood faith, an adjustment to the forecast reductions that ABBOTT will bepermitted.  If the PARTIES cannot come toan agreement regarding any such adjustment, the forecast reductions shallremain as set forth above.

 

Notwithstanding the foregoing, MEDIMMUNE shall useits COMMERCIALLY REASONABLE EFFORTS to comply with unplanned changes in FIRMORDERS, but shall not be held liable for its inability to do so. In each FIRMORDER for any month, ABBOTT shall state, after consultation with MEDIMMUNE, areasonable delivery schedule for PRODUCTS to be delivered in that month.

 

Notwithstanding anything to the contrary in this Section 5.1(a),MEDIMMUNE reserves the right to spread the supply of PRODUCT throughout the

 

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CONTRACT YEAR, provided that if the supply does notmeet the specified order dates, then the supply shall be reasonably related toABBOTT’s demand requirements for the PRODUCTS at the time of delivery in suchCONTRACT YEAR.

 

(b)                                 **NUDE VIALS**.  AllPRODUCT shall be supplied to ABBOTT by MEDIMMUNE and shall be ordered by ABBOTTbased on UNIT type; without labeling, packaging and packaging inserts. ABBOTTshall be responsible for the labeling, packaging and packaging inserts ofPRODUCT at ABBOTT’s sole cost and expense (subject to MEDIMMUNE’s approvalright set forth in Section 2.3).

 

(c)                                  **MINIMUM ORDER QUANTITY**.  Except as otherwise provided in Section 5.2 below, forecastsand order totals for each CONTRACT YEAR shall be a minimum of [***] 100mgequivalent vials for any one formulation of PRODUCT (e.g., lyophilized SYNAGIS,the liquid formulation of SYNAGIS or NUMAX) (“Minimum Order Quantity”).  Notwithstanding the foregoing, during theperiod of conversion of the market to the liquid formulation of SYNAGIS or toNUMAX,  ABBOTT shall, upon prior approvalof the Manufacturing Steering Committee, be entitled to order less than theMinimum Order Quantity.  In any CONTRACTYEAR of conversion described above, in the event that ABBOTT does not order theMinimum Order Quantity and has not obtained Manufacturing Steering Committeeapproval, then ABBOTT shall pay MEDIMMUNE an amount equal to the COST OF GOODS(plus royalties, if any, due by MEDIMMUNE to any THIRD PARTIES on such COST OFGOODS) multiplied by the amount by which the number of UNITS ordered byABBOTT in any CONTRACT YEAR is less than the Minimum Order Quantity (suchamount, the “Deficiency”).  For the sakeof clarity, in the event the Manufacturing Steering Committee has approved theordering of less than the Minimum Order Quantity, ABBOTT shall not be liable topay the Deficiency.  ABBOTT shall payMEDIMMUNE any amount due hereunder no later than thirty (30) days after the endof the applicable CONTRACT YEAR.

 

5.2                                 **SUPPLY HARMONIZATION**.  ABBOTT and MEDIMMUNE shall jointly create a steering committee (“ManufacturingSteering Committee”) to coordinate: (a) the material management/supply chainlogistics related to the partial or complete conversion of one formulation of aPRODUCT to another (including, but not limited to, the conversion from thelyophilized formulation of SYNAGIS to the liquid formulation of SYNAGIS), (b)the manufacture and distribution of the PRODUCTS in the event of theintroduction of any PRODUCT or formulation of the PRODUCT in the TERRITORY(including any related REGULATORY FILINGS or communications related toREGULATORY APPROVAL thereof, but in each such case only to the extentspecifically related to the manufacture or distribution of the PRODUCTS), (c)the development and management of change control processes for any PRODUCT, (d)the development of an inventory management process for any PRODUCT, (e)participation in THIRD PARTY MANUFACTURER interactions, and (f) any adjustmentof the minimum order quantities set forth in Section 5.1(c) above, asnecessary to facilitate any launch of NUMAX or of the liquid formulation ofSYNAGIS and to minimize the amount of expired PRODUCT.  The Manufacturing Steering Committee shalldevelop and implement plans for the initial introduction of the PRODUCT orconversion of any formulation of the PRODUCT with the goal of  minimizing the amount of expired PRODUCT orformulation upon conversion.  Except asotherwise provided under Section 7.7(b), a deadlock with respect

 

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to any decision to be reached by the ManufacturingSteering Committee shall be resolved by MEDIMMUNE; provided, however,that (i) the Manufacturing Steering Committee may not wholly discontinue theproduction of either SYNAGIS or NUMAX or an approved presentation (e.g., 50mgvials and 100mg vials) without ABBOTT’s consent, and (ii) ABBOTT shall have thefinal decision making authority with respect to the management of the inventoryof PRODUCT and ordering of PRODUCT consistent with Section 5.1.  The PARTIES shall use COMMERCIALLY REASONABLEEFFORTS to convene the first Manufacturing Steering Committee meeting withinforty-five (45) days after the EFFECTIVE DATE and, thereafter the ManufacturingSteering Committee shall convene as frequently as necessary, but not less than onceevery CALENDAR QUARTER.

 

6.                                       **REGULATORY AND CLINICALDEVELOPMENT ISSUES**

 

**6.1****                              ****REGULATORY FILINGS AND FEES**. ABBOTT shall use COMMERCIALLY REASONABLE EFFORTS to obtain REGULATORYAPPROVAL for NUMAX in all countries in the TERRITORY in which, in ABBOTT’s reasonabledetermination, the market potential of NUMAX in such country warrants seekingsuch REGULATORY APPROVAL, but at least in all countries in the MAJOR MARKETS, andto seek the most favorable reimbursement rates for NUMAX in such countries(consistent with applicable law). MEDIMMUNE shall provide ABBOTT with any support and documentationreasonably requested by ABBOTT to make such REGULATORY FILINGS.  ABBOTT shall be solely responsible for thepreparation, filing, presentation and maintenance of all REGULATORY FILINGSand, subject to the satisfaction by MEDIMMUNE of its obligations under thisAGREEMENT, for obtaining all REGULATORY APPROVALS for the PRODUCTS.  All REGULATORY APPROVALS for NUMAX shall beowned by and held by ABBOTT or its AFFILIATES. Except as otherwise specifically provided under Sections 7.7 and 7.8,ABBOTT shall be responsible for all filing, user and other administrative feesassociated with: (a) the submission of REGULATORY FILINGS for PRODUCT in theTERRITORY, and (b) for obtaining and maintaining the REGULATORY APPROVALS foreach PRODUCT in the TERRITORY.  ABBOTTshall exercise COMMERCIALLY REASONABLE EFFORTS to maintain REGULATORYAPPROVAL,  pricing approval andreimbursement approval for each PRODUCT in each country of the TERRITORY inwhich REGULATORY APPROVAL is obtained. Notwithstanding anything in the foregoing to the contrary, if theREGULATORY AUTHORITIES in any country in the TERRITORY require one or moreadditional post-approval studies (other than studies related to DiscretionaryChanges or Required Changes (which are addressed in Section 7.7)) (“POST-APPROVALSTUDIES”) to obtain or maintain REGULATORY APPROVAL, and ABBOTT reasonablydetermines that the cost of conducting such POST-APPROVAL STUDIES is notcommercially feasible in light of the size and potential of the market for thePRODUCT in such country, MEDIMMUNE may, but shall not be required to, conductsuch required POST-APPROVAL STUDIES. Upon completion of such POST-APPROVAL STUDIES by MEDIMMUNE, ABBOTT shallbe entitled to assume the responsibility of obtaining REGULATORY APPROVAL insuch country provided that the PARTIES are able to successfully negotiate thecommercial terms by which MEDIMMUNE will be compensated for the actual costsincurred by MEDIMMUNE in connection with the POST-APPROVAL STUDIES conducted byMEDIMMUNE.  In the event that the PARTIESare unable to negotiate the terms of compensation to MEDIMMUNE for thePOST-APPROVAL STUDIES, ABBOTT’s rights to such PRODUCT in such country shall beforfeited.  For the sake of

 

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clarity, a forfeiture of ABBOTT’s rights pursuant tothe preceding sentence, shall not be a considered a REVERSION EVENT forpurposes of Section 3.4.

 

6.2                                 **[Reserved.]**

 

6.3                                 **COMMUNICATION WITHREGULATORY AUTHORITIES**.  Except as otherwise specifically providedherein, ABBOTT shall have sole responsibility for communicating with the REGULATORYAUTHORITIES in the TERRITORY regarding all regulatory matters with respect tothe PRODUCTS and MEDIMMUNE shall have sole responsibility for communicatingwith any REGULATORY AUTHORITIES outside the TERRITORY with respect to thePRODUCTS.  ABBOTT acknowledges that priorto the EFFECTIVE DATE, MEDIMMUNE has had communications with REGULATORYAUTHORITIES in the TERRITORY regarding NUMAX. Accordingly, the PARTIES agree to work cooperatively to transitionresponsibility to make REGULATORY FILINGS to ABBOTT.

 

Each PARTY shall provide the other PARTY with anopportunity, in advance of any REGULATORY FILING to, or material communicationswith, any REGULATORY AUTHORITY in the MAJOR MARKETS or the United States toreview and comment on all REGULATORY FILINGS or communications (includingwritten responses to any REGULATORY AUTHORITY questions) regarding the PRODUCTS,including, but not limited to any such REGULATORY FILINGS or communicationsrelated to the design or conduct of a clinical trial for the PRODUCTS.  Notwithstanding the foregoing, the filingPARTY shall, in its sole discretion, determine the timing, manner and contentof any submission to or communication with any REGULATORY AUTHORITY.  Each PARTY shall provide the other PARTY withcopies of all material written communications between the PARTY and REGULATORYAUTHORITIES in the MAJOR MARKETS or the United States and any adverse findingor communication, oral or written, by any such REGULATORY AUTHORITIES regardingthe PRODUCTS.

 

6.4                                 **MEETINGS WITH REGULATORYAUTHORITIES**.  Each PARTY shall notify the other PARTYregarding upcoming meetings between the PARTY and REGULATORY AUTHORITIES atwhich a matter material to obtaining or maintaining REGULATORY APPROVAL of thePRODUCT in the MAJOR MARKETS or the United States (including, but not limitedto related to the design or conduct of a clinical trial from which data isexpected to be used towards REGULATORY APPROVAL for such PRODUCT) in thejurisdiction governed by such REGULATORY AUTHORITY is expected to bediscussed.  No later than thirty (30)days prior to any meeting with any REGULATORY AUTHORITIES in the MAJOR MARKETSor the United States, the PARTIES shall convene to discuss the matter(s) to beaddressed at such meeting.  To the extentpermissible, the non-filing PARTY shall have the right to participate, at itsown expense, in any such meeting between the PARTY and the REGULATORYAUTHORITIES.  Each PARTY agrees that thenon-filing PARTY’s presence at such meeting shall be, at the discretion of thefiling PARTY, in an observational capacity only.  The filing PARTY shall have the solediscretion regarding all presentations, discussions and statements made andstrategies employed at any meeting with REGULATORY AUTHORITIES.  Each PARTY’s obligation to provideinformation under this Section 6.4, shall be limited to providingsuch information as could reasonably be expected to affect the other PARTY’sREGULATORY FILINGS.

 

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6.5                                 **CLINICAL AND REGULATORYINFORMATION**.

 

(a)                                  **BY MEDIMMUNE**.  Tothe extent not provided to ABBOTT prior to the EFFECTIVE DATE and to the extentMEDIMMUNE develops or has developed any data or information consistent with theterms of this AGREEMENT that was not initially provided to MEDIMMUNE byABBOTT,  MEDIMMUNE shall, as soon as practical after the EFFECTIVE DATE and on aperiodic basis, provide ABBOTT with data and information that MEDIMMUNE has inits possession with respect to NUMAX and the liquid formulation of SYNAGIS thatis necessary for ABBOTT to obtain appropriate REGULATORY APPROVALS in theTERRITORY, which data and information may include, but would not be limited to,filings with the FDA to the extent such information could reasonably beexpected to affect ABBOTT’s REGULATORY FILINGS in the TERRITORY.  Notwithstanding the foregoing, primary sourcedata will only be made available upon request from the REGULATORY AUTHORITYwhere required for REGULATORY APPROVAL. All such information provided by MEDIMMUNE shall be in the Englishlanguage.  MEDIMMUNE and ABBOTT shall,through the DEVELOPMENT COMMITTEE, jointly coordinate the best regulatory approachand filing strategy necessary to assure the successful submission and approvalof NUMAX and the liquid formulation of SYNAGIS in the TERRITORY.  MEDIMMUNE shall provide ABBOTT reasonabletechnical assistance and cooperation in connection with ABBOTT’s efforts inobtaining and maintaining REGULATORY APPROVAL of NUMAX and the liquidformulation of SYNAGIS in each MAJOR MARKET. MEDIMMUNE shall provide ABBOTT access to MEDIMMUNE’s clinical databaseand master SAS database upon reasonable notice solely to enable ABBOTT toexpediently respond to queries from REGULATORY AUTHORITIES in the TERRITORYregarding the PRODUCTS, including but not limited to, data regarding the PhaseIII pivotal clinical trials for SYNAGIS; provided, however, thatany response to such queries shall be first submitted to MEDIMMUNE for reviewand comment.  Any analysis, reports andother materials prepared from the information provided under this Section 5.5,will be made available to MEDIMMUNE consistent with Section 7.1 andother applicable provisions of this AGREEMENT.  Such analysis, reports and other materials shall be used for the solepurpose of obtaining REGULATORY APPROVAL or for any other purpose approved bythe DEVELOPMENT COMMITTEE.

 

(b)                                 **BY ABBOTT**.  Tothe extent not provided to MEDIMMUNE prior to the EFFECTIVE DATE and to theextent ABBOTT develops or has developed any data or information consistent withthe terms of this AGREEMENT that was not initially provided to ABBOTT byMEDIMMUNE, ABBOTT shall, as soon aspractical after the EFFECTIVE DATE and on a periodic basis, provide MEDIMMUNEwith data and information that ABBOTT has in its possession with respect toNUMAX and the liquid formulation of SYNAGIS that is necessary for MEDIMMUNE toobtain appropriate REGULATORY APPROVALS outside the TERRITORY, which data andinformation may include, but would not be limited to, filings with theREGULATORY AUTHORITIES in the MAJOR MARKETS to the extent such informationcould reasonably be expected to affect MEDIMMUNE’s REGULATORY FILINGS outsidethe TERRITORY.  Notwithstanding theforegoing, primary source data will only be made available upon request fromthe REGULATORY

 

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AUTHORITY where required for REGULATORYAPPROVAL.  All such information providedby ABBOTT shall be in the English language. ABBOTT shall provide MEDIMMUNE reasonable technical assistance andcooperation in connection with MEDIMMUNE’s access of data for the purpose ofobtaining and obtaining and maintaining REGULATORY APPROVAL of NUMAX and theliquid formulation of SYNAGIS outside of the TERRITORY.  ABBOTT shall provide MEDIMMUNE access toABBOTT’s clinical database and master SAS database upon reasonable noticesolely to enable MEDIMMUNE to expediently respond to queries from REGULATORYAUTHORITIES outside the TERRITORY regarding the PRODUCTS.  Any analysis, reports and other materialsprepared from the information provided under this Section 5.5, willbe made available to ABBOTT consistent with Section 7.1 and otherapplicable provisions of this AGREEMENT.  Such analysis, reports and other materials shall be used for the solepurpose of obtaining REGULATORY APPROVAL or for any other purpose approved bythe DEVELOPMENT COMMITTEE.

 

6.6                                 **JOINT DEVELOPMENT COMMITTEE**.

 

(a)                                  The PARTIES agree to form a joint DEVELOPMENTCOMMITTEE comprised of senior management of each PARTY (“DEVELOPMENT COMMITTEE”).  The PARTIES shall use COMMERCIALLY REASONABLEEFFORTS to have a meeting of the DEVELOPMENT COMMITTEE within forty-five days afterthe EFFECTIVE DATE and thereafter once every CALENDAR QUARTER, or morefrequently if mutually agreed upon by the PARTIES, (i) to discuss andcoordinate clinical development plans for PRODUCTS, (ii) to update the otherPARTY on and discuss the design, analysis plan, execution plan, timeline of anyproposed clinical trial and any related proposal developed in accordance withthe clinical development plans (provided however that the PHASE III CLINICALTRIAL and any other existing ongoing clinical trials with respect to NUMAX andthe liquid formulation of SYNAGIS will not be subject to discussion under this Section 6.6),(iii) to review and approve any proposed clinical trials of the PRODUCTS in theTERRITORY consistent with Section 6.8, (iv) to coordinate thestrategy of submissions of the REGULATORY FILINGS to REGULATORY AUTHORITIES inthe TERRITORY with respect to NUMAX, (v) to review and approve or reject thepublication of data and information with respect to the PRODUCTS as set forthin Section 6.11 and (vi) to provide updates of the status of andcoordinate completion of the project to remove animal proteins from the workingcell banks for the PRODUCT.   TheDEVELOPMENT COMMITTEE shall not make the decision to take any action orinaction which conflicts with or fails to conform to the applicable laws in anycountry in the TERRITORY.  A deadlockwith respect to any matter submitted to the DEVELOPMENT COMMITTEE shall bereferred to the respective executive officers of the PARTIES for resolution,who shall have ten (10) business days to resolve the deadlock.  If such executive officers are unable toresolve the deadlock, MEDIMMUNE shall have the final decision with respect tothe deadlock.  For clarity, no clinicaltrials for PRODUCTS will be initiated by ABBOTT without approval of theDEVELOPMENT COMMITTEE.

 

(b)                                 MEDIMMUNE shall periodically, and at leastsemi-annually, submit comprehensive and complete reports to the DEVELOPMENTCOMMITTEE, in MEDIMMUNE’s format, regarding activities undertaken by or on behalfof

 

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MEDIMMUNE with respect to the development of NUMAX,and specifically on activities and studies/trials undertaken by MEDIMMUNE pursuant to MEDIMMUNE’sdevelopment plan for NUMAX, including their progress, status and outcome aswell as major findings and major decision points, as applicable, so as to keepthe DEVELOPMENT COMMITTEE fully advised of MEDIMMUNE’s development activitieswith respect to NUMAX.

 

(c)                                  ABBOTT shall periodically, and at least semi-annually,submit comprehensive and complete reports to the DEVELOPMENT COMMITTEE, inABBOTT’s format, regarding activities previously approved by the DEVELOPMENTCOMMITTEE and undertaken by or on behalf of ABBOTT with respect to thedevelopment of NUMAX, including their progress, status and outcome as well asmajor findings and major decision points, as applicable, so as to  keep the DEVELOPMENT COMMITTEE fully advisedof ABBOTT’s development activities with respect to NUMAX.

 

(d)                                 Notwithstanding anything in this Section 6.6to the contrary, following approval of NUMAX by the REGULATORY AUTHORITIES inthe MAJOR MARKETS the PARTIES shall meet from time to time to review and reviseas necessary the obligations of the DEVELOPMENT COMMITTEE to meet regularly andto receive regular reports (but any such changes will not, in any event, affectthe responsibilities of the DEVELOPMENT COMMITTEE set forth in this AGREEMENT).

 

6.7                                 **[Reserved.]**

 

6.8                                 **CLINICAL TRIALS**.** **

 

(a)                                  MEDIMMUNE’S COMMITMENT. MEDIMMUNE shall be solely responsible for using its COMMERCIALLYREASONABLE EFFORTS to conduct (and shall bear all costs and expenses related toconducting) the pre-approval clinical development of NUMAX described in theDevelopment Plans attached as Exhibit 6.8 hereto, including all costsand expenses related to the PHASE III CLINICAL TRIAL and, if required by theapplicable REGULATORY AUTHORITIES for approval of NUMAX, a safety study inpatients with congenital heart disease for approval of NUMAX in the MAJORMARKETS and/or safety study(ies) for approval of NUMAX in Japan (each, a “SafetyStudy” and collectively, the “Safety Studies”). For the purposes of the preceding sentence, a Safety Study shall mean aclinical trial designed to show that NUMAX is safe in the indicated populations,but not an efficacy study or a comparative study against SYNAGIS, regardless,in each case, of whether any such study is also designed to show safety in theindicated populations.  Notwithstandinganything in the foregoing to the contrary, MEDIMMUNE shall have no obligationto conduct the Safety Studies if the expenditures for the Safety Studies in theaggregate are reasonably projected by the DEVELOPMENT COMMITTEE to be more than[***] or if the Safety Studies collectivelyrequire enrollment of substantially more than [***] patients.

 

In addition, MEDIMMUNE agrees to be solelyresponsible for all pre-approval clinical development costs and expensesrelated to any future indications (i.e., other than the indications to besought based on the Development Plans) of

 

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NUMAX. MEDIMMUNE acknowledges that ABBOTT shall have no responsibility toprovide funding for any clinical development cost and expenses solely for useoutside of the TERRITORY.  ABBOTT shallhave the right to make recommendations with respect to the design and executionof any clinical trials for NUMAX through the DEVELOPMENT COMMITTEE andMEDIMMUNE agrees to consider any recommendations made by ABBOTT with respect toany such clinical trials; provided, however, that, ABBOTT may notalter or comment on the design of the PHASE III CLINICAL TRIAL as in effect asof the EFFECTIVE DATE.  For clarity,MEDIMMUNE shall have the right to terminate any clinical trials for which it isresponsible under this Section 6.8(a) to the extent it has expendedCOMMERCIALLY REASONABLE EFFORTS and has determined that termination of suchtrial is commercially appropriate under the circumstances.

 

(b)                                 ABBOTT’S COMMITMENT. ABBOTT shall be solely responsible for using its COMMERCIALLY REASONABLEEFFORTS to conduct (and shall bear all costs and expenses related toconducting) pre-approval clinical trials for NUMAX which are specific to acountry in the TERRITORY other than those described as MEDIMMUNE’s obligationsunder Section 6.8(a) and, as set forth in Section 6.1, allPOST-APPROVAL STUDIES of the PRODUCTS, in each case as approved by theDEVELOPMENT COMMITTEE.  Notwithstandingthe foregoing sentence, in the event that MEDIMMUNE discontinues the [***] on or prior to [***] other than for reasons associated with thesafety or efficacy of NUMAX, then MEDIMMUNE hereby agrees to conduct one ormore pre-approval clinical trials proposed by ABBOTT and approved by theDEVELOPMENT COMMITTEE.  MEDIMMUNE shallsolely bear the costs of such clinical trial(s) proposed by ABBOTT up to, butnot more than, [***].  Anycosts associated with the conduct of such clinical trial(s) proposed by ABBOTTin excess of [***] shall be borne by ABBOTT.

 

For clarity, ABBOTT shall have the right toterminate any clinical trials for which it is responsible under this Section 6.8(b)to the extent it has expended COMMERCIALLY REASONABLE EFFORTS and hasdetermined that termination of such trial is commercially appropriate under thecircumstances.

 

(c)                                  COORDINATION.

 

(i)                                     Other than the obligations of each PARTY tobear the cost and expenses of clinical trials as set forth in Section 6.8(a)or Section 6.8(b), if any clinical trials are designed to be usedfor REGULATORY APPROVAL in the TERRITORY and outside the TERRITORY, the PARTIESshall meet and agree to discuss in good faith a reasonable allocation of costsand expenses related to any such trials.

 

(ii)                                  Any clinical trials to be conducted by eitherPARTY pursuant to this AGREEMENT must be approved in advance by the DEVELOPMENTCOMMITTEE; provided, however, that the DEVELOPMENT COMMITTEEshall not have the right to alter the obligations of each PARTY to conductclinical trials to the

 

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                extent required pursuant to this Section 6.8or the payment obligation of the PARTIES.

 

(iii)                               Each PARTY shall exercise its COMMERCIALLYREASONABLE EFFORTS to initiate a clinical trial as soon as practicable afterapproval of such trial by the DEVELOPMENT COMMITTEE.

 

(iv)                              Where commercially reasonably, one PARTY mayrequest and the other PARTY may, but shall not be required to, allow requestingPARTY to conduct one or more clinical trials on the other PARTY’s behalf, buthonoring any such request shall not alter the obligations to provide fundingfor such clinical trials set forth in this Section 6.8.

 

(v)                                 For clarity, termination of a clinical trialby either PARTY in accordance with this Section 6.8 shall not bedeemed to affect the rights of either PARTY provided elsewhere in thisAGREEMENT as to the effect of such termination.

 

6.9                                 **REPRESENTATION WITH RESPECTTO CLINICAL TRIALS**.  MEDIMMUNE represents that on or prior to theEFFECTIVE DATE, MEDIMMUNE has disclosed to ABBOTT: (a) all material aspects ofthe strategy, status and results of the Development Plans, (b) all knownresults which have undergone a complete analysis by MEDIMMUNE of any completedor unblinded clinical trials conducted by MEDIMMUNE or any THIRD PARTYconducting such trials on behalf of MEDIMMUNE as of the EFFECTIVE DATE, (c) allserious adverse event information involving NUMAX that have been notified toMEDIMMUNE, and (d) all materials aspects and findings of the PHASE III CLINICALTRIAL.

 

6.10                           **PUBLICATIONS**. Neither PARTY shall publish or present the results of any research,development or any other information relating to any PRODUCT without securingthe prior approval of the DEVELOPMENT COMMITTEE, including but not limited to,data presented with respect to any PRODUCT at key medical meetings, releasesdeveloped by either PARTY in conjunction with key medical institutions, andother releases used in support of brand positioning and educational campaignsrelated to any PRODUCT.  The PARTYdesiring to publish any abstract, manuscript or presentation with respect toany PRODUCT shall submit such document for review to the DEVELOPMENT COMMITTEEsufficiently in advance of the proposed date of submission of the publicationso that, where reasonable under the circumstances, such DEVELOPMENT COMMITTEEhas at least forty-five (45) days to review the proposed publication.  The DEVELOPMENT COMMITTEE will use its bestefforts to expedite the review of any publications that are time sensitive.  Either PARTY shall be entitled to use thedata provided by the other hereunder for the purposes of creating marketing andpromotional material for use by ABBOTT in the TERRITORY and by MEDIMMUNEoutside of the TERRITORY; provided, however, that, any suchmaterial shall be submitted to the DEVELOPMENT COMMITTEE for review andapproval prior to its use or publication. Notwithstanding anything in this Section 6.10to the contrary, neither PARTY shall be required to seek the approval of theother PARTY for the publication of the results of research, development or anyother information relating to any PRODUCTS that has been submitted to any THIRDPARTY for publication on or prior to the EFFECTIVE

 

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DATE; provided, however, that ABBOTTshall provide MEDIMMUNE with copies of all such publications (or pendingpublications) within forty-five (45) days after the EFFECTIVE DATE.  Both PARTIES shall maintain theconfidentiality of the results and data provided to the other PARTY hereunderin accordance with Section 8.5.

 

6.11                           **TRADE SECRETS****. **Notwithstanding anything in this AGREEMENT to the contrary, in theevent that any REGULATORY FILING or REGULATORY AUTHORITIES require informationthat is reasonably considered to be a trade secret by MEDIMMUNE, MEDIMMUNEshall be entitled to provide such information directly to the applicableREGULATORY AUTHORITY in a master file or other REGULATORY FILING withoutproviding ABBOTT a copy of or access to such information.

 

**7.****                                     ****OTHER RESPONSIBILITIES OFMEDIMMUNE****.**

 

**7.1****                              ****ACCESS TO INFORMATIONRELATING TO SALE AND MARKETING**.  Other than with respect toinformation provided in accordance with the schedule set forth in Section 6.10,MEDIMMUNE shall promptly notify ABBOTT and grant ABBOTT access to all data ordocuments regarding the PRODUCTS in the TERRITORY for which REGULATORY APPROVALhas been obtained that may reasonably be expected to materially impact themarketing and sale of the PRODUCTS in the TERRITORY or require disclosures ornotifications to REGULATORY AUTHORITIES in the TERRITORY,  including but not limited to, any materialdata, documentation and information derived from any life cycle managementprojects, Phase IV trials, and correspondence and discussions with the FDA orother REGULATORY AUTHORITIES.  MEDIMMUNEshall also advise ABBOTT of any occurrence or information which arise out ofthe manufacturing activities engaged by MEDIMMUNE or, if known to MEDIMMUNE, byits THIRD PARTY MANUFACTURER, which have, in MEDIMMUNE’s reasonable judgment,adverse regulatory compliance and/or reporting consequences or adverse impacton the sale of the PRODUCTS in the TERRITORY. MEDIMMUNE shall be responsible for handling and responding to anyappropriate REGULATORY AUTHORITY inspection with respect to its manufacturingof the PRODUCTS, and shall keep ABBOTT duly informed with respect thereto.

 

ABBOTT shall promptly notify MEDIMMUNE and grantMEDIMMUNE access to all data or document regarding the PRODUCTS that mayreasonably be expected to materially impact the marketing and sale of thePRODUCTS or require disclosures or notifications to REGULATORY AUTHORITIES,including but not limited to, any material data, documentation and informationderived from any life cycle management projects, Phase IV trials,correspondence and discussions with the REGULATORY AUTHORITIES.

 

**7.2****                              ****QUALITY ASSURANCE**.

 

(a)                                  MEDIMMUNEwarrants and represents that the PRODUCTS manufactured by MEDIMMUNE, itsAFFILIATES or subcontractors and delivered to ABBOTT or its AFFILIATEShereunder shall:  (i) upon delivery ofthe PRODUCT, conform to the SPECIFICATIONS, and shall be in full conformitywith all applicable laws and regulations relating to the manufacture of thePRODUCTS, including, but not limited to, applicable laws in the country inwhich the PRODUCT is manufactured and cGMP practices, in each case to theextent applicable to MEDIMMUNE, its AFFILIATES or subcontractors as the

 

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manufacturer(s) of the PRODUCTS and (ii) at the time of delivery, shallbe free and clear of any and all liens, encumbrances and securityinterests.  ABBOTT shall use COMMERCIALLYREASONABLE EFFORTS to advise and inform MEDIMMUNE regarding the cGMPrequirements of REGULATORY AUTHORITIES in the countries in the MAJOR MARKETS.  MEDIMMUNE shall take COMMERCIALLY REASONABLE EFFORTSto comply with the cGMP requirements of such REGULATORY AUTHORITIES ifcommercially reasonable to make such changes, and ABBOTT shall use itsCOMMERCIALLY REASONABLE EFFORTS to have any such changes approved by theapplicable REGULATORY AUTHORITIES. ABBOTT’s inability to market, promote, sell or distribute the PRODUCT inany country as a consequence of the failure to comply with the cGMPrequirements of the REGULATORY AUTHORITIES in such country(ies) shall not beregarded as a failure by ABBOTT to market, promote, sell or distribute forpurposes of any term in this AGREEMENT

 

(b)                                 Within ninety(90) days following the EFFECTIVE DATE, the PARTIES shall use theirCOMMERICALLY REASONABLE EFFORTS to enter into a quality/technical agreementaddressing release and quality testing of the PRODUCTS.  In reaching such an agreement, the PARTIESwill discuss in good faith:  (i) productidentification requirements for nude vials, (ii) such other product release andquality assurance matters as may be identified on or after the EFFECTIVE DATEand (iii) any other matters customarily addressed in a quality/technicalagreement (including, but not limited to the matters set forth on Exhibit7.2) or legally required to be addressed under the laws or regulations ofthe country in which the PRODUCTS are manufactured.  The quality/technical agreement shallprovide at a minimum that MEDIMMUNE shall provide ABBOTT with documentation orevidence reasonably requested by ABBOTT (other than as may be reasonablyrequired to protect MEDIMMUNE trade secrets) to demonstrate that the PRODUCTSare manufactured under adequate cGMP controls and generally accepted qualitystandards.  The terms and provisions of thequality/technical agreement shall, upon execution, be incorporated herein byreference and shall control over any conflicting provisions of this AGREEMENT.

 

(c)                                  MEDIMMUNEshall also use its COMMERCIALLY REASONABLE EFFORTS to require any THIRD PARTYMANUFACTURER of the PRODUCT to enter into a quality/technical agreement withMEDIMMUNE with respect to the release and quality testing of the PRODUCTSmanufactured by such THIRD PARTY and such other product quality assurancematters as required in accordance all applicable laws and regulations relatingto the manufacture of the PRODUCTS, including, but not limited to, applicablelaws in the countries in the TERRITORY.

 

**7.3****                              ****PRODUCT DEFECTS AND NON-CONFORMITY**.

 

(a)                                  ABBOTT shall promptly upon receipt ofany PRODUCT inspect or cause to be inspected a representative sample of eachbatch of PRODUCT supplied by MEDIMMUNE or MEDIMMUNE’s THIRD PARTYMANUFACTURER.  Any claims regarding thequality or quantity of the any PRODUCT supplied pursuant to this AGREEMENTshall be made in writing, specifying in reasonable detail

 

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the nature of thedefect, non-conformity with SPECIFICATIONS, or other basis for the claim andciting relevant control numbers or other information to enable specificidentification of the PRODUCT in question. Any such claim for defective or non-conforming PRODUCT shall be made byABBOTT within forty-five (45) days of receipt of the PRODUCT by ABBOTT.

 

(b)                                 Notwithstandinganything in this AGREEMENT to the contrary, any NUMAX delivered hereunder thathas a remaining shelf-life of less than the lesser of (i) [***] or (ii) [***] of theapproved shelf-life at the time of delivery [***], shall be considered defective for purposesof the remedies set forth in this Section 7.3, except to the extentABBOTT is made aware of a shorter remaining shelf-life prior to delivery andstill requests shipment.

 

(c)                                  MEDIMMUNE orits designee shall have the right to first inspect any PRODUCT involved beforebeing required to take any action with respect thereto.  MEDIMMUNE shall review any claim of defectiveor non-conforming PRODUCT made by ABBOTT within ten (10) business days ofreceipt and conduct any required testing of the PRODUCT involved as soon aspossible, but in no event later than forty-five (45) days after receipt thereofor earlier if the REGULATORY AUTHORITY in the TERRITORY requires an earlierresponse. Any out-of-pocket costs incurred by MEDIMMUNE related to any suchtesting shall be paid by ABBOTT, but shall be reimbursed by MEDIMMUNE if thePRODUCT is found to be defective as a result of such testing.  If such review and testing by MEDIMMUNEconfirms that the PRODUCT is defective or non-conforming, then, at MEDIMMUNE’sexpense, ABBOTT shall dispose of or return the defective or non-conformingPRODUCT as MEDIMMUNE shall direct in writing and MEDIMMUNE shall replace suchPRODUCT with non-defective or conforming PRODUCT as soon as possible, but in noevent later than six (6) months after final results of any testing have beenobtained.  Replacement of the PRODUCTshall be ABBOTT’s sole and exclusive remedy for any defective or non-conformingPRODUCT delivered by MEDIMMUNE or its THIRD PARTY MANUFACTURER.

 

(d)                                 If the PARTIESfail to agree as to whether any PRODUCT supplied by MEDIMMUNE or its THIRDPARTY MANUFACTURER is defective or non-conforming, then the Parties shall refersuch dispute for resolution to a competent independent testing laboratoryagreed in good faith between the PARTIES or, if the cost of using anindependent testing laboratory would make such a process commerciallyunreasonable, the PARTIES will work together to devise a mutually agreeable setof tests to be performed by MEDIMMUNE. In the event that such laboratory or MEDIMMUNE determines that suchPRODUCTS were defective or non-conforming, MEDIMMUNE will bear all costs of suchtesting and analysis.  If, by contrast,such laboratory determines that such PRODUCTS were not defective ornon-conforming, then ABBOTT will bear all costs of such testing and analysis.  In all such cases, the laboratory’sdetermination (or the agreed upon tests performed by MEDIMMUNE) shall be final.

 

**7.4****                              ****INSPECTION BY REGULATORY AUTHORITIES**.  MEDIMMUNE shall allow, and will exert itsCOMMERCIALLY REASONABLE EFFORTS to cause any THIRD PARTY MANUFACTURER of anyPRODUCT to allow, representatives of any REGULATORY AUTHORITY in the TERRITORYwith jurisdiction over the

 

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manufacture, marketing and distribution of the PRODUCT to tour andinspect all facilities utilized by MEDIMMUNE or its THIRD PARTY MANUFACTURER inthe manufacture, testing, packaging, storage, and shipment of PRODUCTS, solelyfor the purpose of applying for or maintaining REGULATORY APPROVAL (any otherrequests for inspections will be assessed by MEDIMMUNE and/or its THIRD PARTYMANUFACTURER on a case-by-case basis). Within ten (10) days of receipt, either PARTY shall provide the otherPARTY with a copy of any notice of inspection of any facility where any PRODUCTis manufactured, adverse finding, regulatory letter or similar notificationsuch PARTY receives from any REGULATORY AUTHORITY relating to the manufactureof the PRODUCTS. MEDIMMUNE shall be responsible for handling and responding toany inquiry or request for inspection by any REGULATORY AUTHORITY relating tothe manufacture of the PRODUCTS, and shall keep ABBOTT duly informed withrespect any material communications with respect thereto.

 

**7.5****                              ****INSPECTION BY ABBOTT**. MEDIMMUNE hereby grants to ABBOTT theright to inspect any MEDIMMUNE manufacturing facilities at which the PRODUCTSsupplied under this AGREEMENT are manufactured. MEDIMMUNE also agrees to exercise COMMERICALLY REASONABLE EFFORTS tohave any THIRD PARTY MANUFACTURER of any PRODUCT to permit such right ofinspection to ABBOTT.  ABBOTT shall alsohave the right to inspect the books and records and the facility, equipment andquality systems related to the manufacture of PRODUCTS supplied pursuant tothis AGREEMENT, including but not limited to such inspections as ABBOTT deemsnecessary or appropriate prior to any submission to any REGULATORY AUTHORITIESin the TERRITORY for approval of such manufacturing facility in connection withthe registration of any PRODUCT.  MEDIMMUNE hereby also grants ABBOTT the right to inspect any testingfacility or laboratory  which contributesdata included in any REGULATORY FILING filed by ABBOTT in connection with thePRODUCT.  Except for inspectionsrequested by a REGULATORY AUTHORITY or required in connection with a REGULATORYFILING, ABBOTT shall inspect any manufacturing facility at which any PRODUCT ismanufactured no more than once every CONTRACT YEAR [***]; provided,however, that, MEDIMMUNE may require ABBOTT to defer such inspection ifsuch inspection could, in MEDIMMUNE’s reasonable determination, detrimentallyinterfere with MEDIMMUNE or any THIRD PARTY MANUFACTURER’s manufacture of thePRODUCTS and MEDIMMUNE may limit ABBOTT’s inspection to the extent reasonablyrequired to protect trade secrets. ABBOTT shall conduct any such inspection during normal business hoursafter reasonable prior notice and subject to appropriate confidentialityprovisions. The books and records subject to inspection include, but are notlimited to, batch records, manufacturing procedures and guidelines, and allquality assurance/quality control documentation relating to the PRODUCTS.

 

**7.6****                              ****ACCESS TO MANUFACTURING DATA**. MEDIMMUNE shall be responsible for preparing and submitting to ABBOTT ona timely basis any data or other information related to the manufacture of thePRODUCT that is required to be included in any REGULATORY FILINGS in the MAJORMARKETS or otherwise requested by any REGULATORY AUTHORITY in the TERRITORY,including without limitation, data relating to the manufacturing process forthe PRODUCT ** **and any quality control proceduresin effect at any facility used to manufacture the PRODUCT; provided, however,that MEDIMMUNE may redact or otherwise limit the information provided to ABBOTTto the extent reasonably required to protect trade secrets.  MEDIMMUNE shall

 

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notify ABBOTT of any matter related to the manufacture of the PRODUCTthat could reasonably be expected to be reportable to the REGULATORYAUTHORITIES in the TERRITORY and promptly furnish to ABBOTT complete copies ofany reports made to the FDA with respect to the manufacture of thePRODUCT.  MEDIMMUNE shall also promptlynotify ABBOTT of any occurrence or information which arises out of themanufacture of the PRODUCTS, which have, or, in MEDIMMUNE’s reasonablejudgment, could be expected to have adverse regulatory compliance and/orreporting consequences or adverse impact within TERRITORY on the registrationor commercialization of the PRODUCTS, including, but not limited to, anydecision by MEDIMMUNE to change the location at which any of the PRODUCTS aremanufactured.

 

**7.7****                              ****CHANGES TO SPECIFICATIONS**. MEDIMMUNE shall promptly advise ABBOTT of any proposed or requiredchanges to the SPECIFICATIONS; provided, however, that ABBOTT’sconsent (not to be unreasonably withheld) shall be required to make anyDiscretionary Changes (as defined below) that will adversely affect aREGULATORY FILING submitted by ABBOTT to the REGULATORY AUTHORITIES in theTERRITORY.  Changes to the SPECIFICATIONSthat are required to comply with the requirements of applicable REGULATORYAUTHORITIES in the MAJOR MARKETS shall be deemed “Required Changes.”  Other changes to the manufacturing process,including those required in connection with the change in THIRD PARTYMANUFACTURER (but not an initial selection of a THIRD PARTY MANUFACTURER) orchanges that are intended to promote quality control/quality assurance and/orachieve greater efficiency or cost savings in the manufacturing process shallbe deemed “Discretionary Changes.”  Forthe avoidance of doubt, a change from one formulation of a PRODUCT to anotheris a Discretionary Change; provided, however, thatnotwithstanding anything in this Section 7.7 to the contrary, (i)ABBOTT is hereby deemed to have consented to the change from the lyophilizedformulation of SYNAGIS to the liquid formulation of SYNAGIS without the need toundergo the consent/approval procedures set forth in this Section 7.7,(ii) ABBOTT acknowledges that it has received the SPECIFICATIONS for the liquidformulation of SYNAGIS (attached as Exhibit A-2) and waives its abilityto comment on such SPECIFICATIONS as permitted by this Section 7.7.  Notwithstanding anything in this AGREEMENT tothe contrary, ABBOTT hereby agrees to conduct any clinical studies required byany REGULATORY AUTHORITIES in the MAJOR MARKETS to obtain REGULATORY APPROVALfor the liquid formulation of SYNAGIS; provided,however, that,ABBOTT shall not be obligated to commence any such clinical study requiredearlier than January 1, 2006; provided, further, that ifABBOTT does not commence any such clinical study before January 1, 2006and such study has otherwise been discussed and reviewed by the ManufacturingSteering Committee, then MEDIMMUNE may, but is not obligated to, commence suchtrial and its own cost before January 1, 2006.

 

(a)                                  MEDIMMUNEshall, at its cost, use COMMERCIALLY REASONABLE EFFORTS to implement RequiredChanges to the manufacturing process as soon as practicable, and ABBOTT shall,at its cost, use COMMERCIALLY REASONABLE EFFORTS to promptly (i) make anychanges, filings or refilings of PRODUCT REGISTRATIONS, (ii) obtain approvalfor the implementation of such Required Changes in the TERRITORY and (iii)conduct any clinical studies required by the applicable REGULATORY AUTHORITIESto implement such Required Changes.

 

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(b)                                 All proposedDiscretionary Changes requested by MEDIMMUNE shall be submitted to ABBOTT forreview and within ten (10) days of such submission, ABBOTT shall either approvesuch Discretionary Changes or request that the Manufacturing Steering Committeemeet to review and consider approval and all proposed Discretionary Changesrequested by ABBOTT shall be submitted to the Manufacturing Steering Committeeto review and consider approval; provided,however, that (i) theManufacturing Steering Committee shall not have the authority to approve anyproposed Discretionary Change if its implementation will adversely impact anypending application for REGULATORY APPROVAL in any country in the TERRITORY,and (ii) any such approval of a Discretionary Change by the ManufacturingSteering Committee may be delayed until the next calendar year in the eventthat ABBOTT reasonably notifies the Manufacturing Steering Committee, inwriting, that the implementation of the Discretionary Change shall cause ABBOTTto incur substantial unbudgeted costs to obtain REGULATORY APPROVAL for suchDiscretionary Change.  For the purposesof clause (ii) of the preceding sentence, a “substantial unbudgeted” cost shallbe deemed to be a cost which was not discussed and reviewed by the ManufacturingSteering Committee prior to September 30 of the calendar year in which aDiscretionary Change is requested by MEDIMMUNE and which would have a materialadverse financial impact on ABBOTT’s overall budget related to the PRODUCTS forthe calendar year in which the Discretionary Change was requested.

 

If approved by the Manufacturing Steering Committee, MEDIMMUNE shall, atits cost, use its COMMERCIALLY REASONABLE EFFORTS to implement all suchDiscretionary Changes to the manufacturing process as soon as practicable, andABBOTT shall, at its cost, use COMMERCIALLY REASONABLE EFFORTS to promptly (i)make any changes, filings or refilings of PRODUCT REGISTRATIONS, (ii) obtainapproval for the implementation of such Discretionary Changes in the TERRITORY,(iii) conduct any clinical studies required by the applicable REGULATORYAUTHORITIES to implement such Discretionary Changes and (iv) obtain theapproval of the applicable REGULATORY AUTHORITIES in the TERRITORY forimplementation of such Discretionary Changes (if necessary) as soon aspracticable.  MEDIMMUNE shall, inwriting, notify ABBOTT of any Discretionary Changes to the SPECIFICATION of anyPRODUCT which, if implemented, would require notification to REGULATORYAUTHORITIES in the TERRITORY.  Upon receiptof such notification, ABBOTT shall be entitled to provide recommendations toMEDIMMUNE regarding the manner and timing of the adoption of such DiscretionaryChanges.  MEDIMMUNE shall, to the extentcommercially reasonable under the circumstances, reasonably take intoconsideration ABBOTT’s recommendations and shall cooperate with ABBOTT inmaking such Discretionary Changes.  Tothe extent such changes require a new or amended PRODUCT REGISTRATION,MEDIMMUNE and ABBOTT shall cooperate and coordinate the adoption of suchchanges to the SPECIFICATIONS so as to minimize any disruption of themarketing, promotionand sale of PRODUCT in any country within the TERRITORY.

 

(c)                                  MEDIMMUNE and ABBOTT shall defineappropriate change control procedures by and among MEDIMMUNE, ABBOTT and anyTHIRD PARTY

 

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MANUFACTURER in the quality/technical agreement described above, subjectto review and approval of the Manufacturing Steering Committee.

 

(d)                                 Any PRODUCTthat becomes unsalable following a change in PRODUCT REGISTRATION as a resultof a Discretionary Change to the SPECIFICATIONS initiated by MEDIMMUNE shall bedeemed to be a defective PRODUCT and shall entitle ABBOTT to the remediesprovided under Section 7.3 of this Agreement.  To the extent any PRODUCT becomes unsalablefollowing a change in PRODUCT REGISTRATION as a result of a DiscretionaryChange to the SPECIFICATIONS initiated by ABBOTT, MEDIMMUNE shall be excusedfrom meeting its obligations to supply the affected PRODUCT(S).

 

**7.8****                              ****CHANGE IN MANUFACTURER**.  Asof the EFFECTIVE DATE, SYNAGIS is manufactured by Boehringer Ingelheim inGermany [***].  Subject to the conditions ofthis Section 7.8, MEDIMMUNE may delegate the manufacture of anyPRODUCT to an alternate THIRD PARTY MANUFACTURER or an AFFILIATE ofMEDIMMUNE.  MEDIMMUNE shall provideABBOTT with prior written notice of any proposed change in the THIRD PARTYMANUFACTURER of any PRODUCT hereunder at least eighteen (18) months prior tosuch change and shall seek the written consent of ABBOTT, which consent shallnot be unreasonably withheld; provided*,*however, in the event that it is not commercially reasonablefor MEDIMMUNE to provide eighteen (18) months notice under the circumstances,the PARTIES shall work cooperatively to establish a mutually acceptabletimeline for effecting such change. Notwithstanding the foregoing, in the event that MEDIMMUNE is [***], the PARTIESacknowledge and agree that MEDIMMUNE may engage another THIRD PARTYMANUFACTURER for NUMAX (or manufacture NUMAX itself or through an AFFILIATE)with written notice to ABBOTT as soon as reasonably practicable.  ABBOTT shall be deemed to have reasonablywithheld consent to a proposed change in the manufacturer of any PRODUCT ifsuch change will result in a material disruption of the supply of the PRODUCTor have a material adverse impact on pending or existing REGULATORY FILINGS orREGULATORY APPROVALS of the PRODUCTS, provided however that, ABBOTT maywithhold such consent for no longer than such reasonable period as required tonotify and obtain any consents to such change in manufacturer as may berequired by REGULATORY AUTHORITIES in the TERRITORY.  In the event that a change in manufacturerwould result in a material financial impact to ABBOTT unanticipated in theordinary course of business, MEDIMMUNE agrees to negotiate in good faith withABBOTT a reasonable allocation between the PARTIES for the incremental costsresulting from such change in manufacturer including, but not limited to,significant additional freight costs (to the extent materially different), butexcluding, without limitation, any expenses incurred by ABBOTT to amendREGULATORY FILINGS made by ABBOTT in the TERRITORY related to such change.MEDIMMUNE shall remain primarily liable to ABBOTT in connection with thequality and supply of the PRODUCTS supplied hereunder and nothing in this Section 7.9shall be construed to reduce or limit the obligations of MEDIMMUNE or therights of ABBOTT pursuant to the remaining terms of this AGREEMENT, includingbut not limited to the obligation of MEDIMMUNE to permit the inspection of itsmanufacturing facilities under Sections 7.4 and 7.5.

 

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8.                                       **OTHER RESPONSIBILITIES OFABBOTT**

 

8.1                                 **COMPLIANCE WITH LAWS**.  Indistributing PRODUCT in the TERRITORY, ABBOTT will comply with all provisionsof the laws, rules and regulations applicable in the TERRITORY.  ABBOTT shall promptly notify MEDIMMUNE of anychanges in such provisions.

 

8.2                                 **PRODUCT DIVERSION**. ABBOTT agrees not to export PRODUCT outside the TERRITORY, as set forthin greater detail in Section 2.2, without the express writtenpermission of MEDIMMUNE which may be withheld in MEDIMMUNE’s sole discretion.

 

8.3                                 **PLANS AND MARKET REPORTS**.  Withinthirty (30) days following the end of CALENDAR QUARTER during the TERM, ABBOTTshall supply MEDIMMUNE each CALENDAR QUARTER with a market progress reportindicating the quantities of each PRODUCT in inventory and NET SALES ofPRODUCTS during each month of the prior CALENDAR QUARTER in each country of theTERRITORY and latest best estimates of sales for each month of such CALENDARQUARTER (by country).  Within thirty (30)days following the beginning of each CALENDAR YEAR during the TERM, ABBOTTshall supply to MEDIMMUNE its commercialization plans for the MAJOR MARKETS andits five-year long-range plan for distribution of PRODUCTS in theTERRITORY.  Any commercialization plansor five-year long-range plans submitted by ABBOTT pursuant to this Section 8.3shall be non-binding, except to the extent reflecting FIRM ORDERS consistentwith Section 5.1.

 

8.4                                 **NO JOINT VENTURE**. Nothing contained in this AGREEMENT shall be construed to constituteeither PARTY as a partner or agent of the other PARTY and to create any otherform of legal association that would impose liability upon a PARTY for the forthe act or omission of the other PARTY or provide a PARTY with the right, poweror authority to create or impose any duty or obligation on the other PARTY.  It being intended that each PARTY shallremain an independent contractor acting in its own name and for its ownaccount.

 

8.5                                 **CONFIDENTIAL INFORMATION**. During the TERM of this AGREEMENT, it is contemplated that a PARTY willdisclose to the other PARTY proprietary and confidential technology,specifications, technical information and the like which are owned orcontrolled by a PARTY (“CONFIDENTIAL INFORMATION”). Without limiting theforegoing, the terms and conditions of this AGREEMENT shall be consideredCONFIDENTIAL INFORMATION.  The receivingPARTY agrees to retain the disclosing PARTY’s CONFIDENTIAL INFORMATION inconfidence and not to disclose any such CONFIDENTIAL INFORMATION to a THIRDPARTY without the prior written consent of the disclosing PARTY and to use thedisclosing PARTY’s CONFIDENTIAL INFORMATION only for the purposes of thisAGREEMENT. The obligations of confidentiality will not apply to CONFIDENTIALINFORMATION which:

 

(i)                                     was known to the receiving PARTY or generallyknown to the public prior to its disclosure hereunder;

 

(ii)                                  subsequently becomes known to the public bysome means other than a breach of this AGREEMENT;

 

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(iii)                               is subsequently disclosed to the receivingPARTY by a third party having a lawful right to make such disclosure;

 

(iv)                              is required by law or bona fide legal processto be disclosed provided that the receiving PARTY takes all reasonable steps torestrict and maintain confidentiality of such disclosure and providesreasonable prior notice to the disclosing PARTY; or

 

(v)                                 is approved for release by the PARTIES.

 

(b)                                 Upon termination or expiration of thisAGREEMENT, each PARTY shall return to the other PARTY all tangible forms ofCONFIDENTIAL INFORMATION furnished by the other PARTY, including all copiesthereof and all memoranda of oral disclosure, except that each PARTY may retainone copy in its files to ensure compliance with any legal obligations.

 

(b)                                 This Section 8.5 shall surviveuntil the tenth anniversary of the termination or expiration of this AGREEMENT.

 

8.6                                 **SALES FORECAST**. ABBOTT agrees to provide MEDIMMUNE with ABBOTT’s annual U.S. Dollarsales and UNIT volume forecast for PRODUCT to be sold in the TERRITORY (bycountry, by month and for five (5) years or such period as ABBOTT uses for itsinternal forecasting) for the sole purpose of assisting MEDIMMUNE in itsfinancial planning.

 

8.7                                 **NO SUBLICENSE**.  ThePARTIES agree that nothing in this AGREEMENT shall be deemed to indicate thatABBOTT has received a sublicense to any intellectual property or know-how ofMEDIMMUNE related to the research, development or manufacturing of thePRODUCTS.

 

9.                                       **CO-PROMOTION OPTION**

 

**9.1****                              ****CO-PROMOTION OPTIONS**. MEDIMMUNE shall have three (3) options (each, a “CO-PROMOTION OPTION”),each to co-promote NUMAX in one (1) country in the TERRITORY, excluding Japan,with at least twelve (12) months prior written notice to ABBOTT.  If a CO-PROMOTION OPTION is exercised,MEDIMMUNE shall have the right to provide up to [***] of the sales/promotioneffort for NUMAX in the selected country, to be reimbursed by ABBOTT at the FTERATE.  For purposes of this Section 9,“co-promote” or “co-promotion” shall mean the marketing, promotion, andadvertisements of NUMAX by MEDIMMUNE or its AFFILIATES under (a) the relevantREGULATORY APPROVAL held by ABBOTT or its AFFILIATES, and (b) theTRADEMARKS.   “Co-promotion” shall notmean the sale or distribution of NUMAX during the TERM of this AGREEMENT byMEDIMMUNE or its AFFILIATES.

 

**9.2**                               **POST-LAUNCH OPTIONS**.  Inaddition to the CO-PROMOTION OPTIONS set forth in Section 9.1,MEDIMMUNE shall also have four (4) additional options (each, a “POST-LAUNCHOPTION”), each to co-promote NUMAX in one (1) country in the TERRITORY, at anytime at least twelve (12) months (twenty-four (24) months in the case of Japan)after first commercial sale of NUMAX in such country, with at least twelve (12)months prior written notice to ABBOTT. If a POST-LAUNCH OPTION is

 

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exercised, MEDIMMUNE shallhave the right to provide up to [***] of the sales/promotional effort for NUMAXin the selected country, to be reimbursed by ABBOTT at the FTE RATE (suchcountries may be in addition to the any countries selected upon exercise of theCO-PROMOTION OPTION described in Section 9.1 so, for clarity,MEDIMMUNE will have a total of seven (7) CO-PROMOTION OPTIONS and POST-LAUNCHOPTIONS in the aggregate).

 

**9.3****                              ****MEDIMMUNE DISCRETION**.  Thecountries with respect to which a CO-PROMOTION OPTION or POST-LAUNCH OPTION willbe exercised by MEDIMMUNE shall be determined at the sole discretion ofMEDIMMUNE at the time of election; provided,however, that, onceMEDIMMUNE has exercised its CO-PROMOTION or POST-LAUNCH OPTION in a country,MEDIMMUNE shall not be entitled to substitute that country for another countryexcept as provided in the last sentence of this Section 9.3.  For the avoidance of doubt, MEDIMMUNE shallnot be able to select Japan as one of the CO-PROMOTION OPTION countries, butshall be able to select Japan as one of the POST-LAUNCH OPTION countries.  In the event that it is determined after thedate of MEDIMMUNE’s notice but prior to the initiation of the co-promotionactivities by MEDIMMUNE in any country, that co-promotion of NUMAX inaccordance with the terms of the co-promotion agreement between the PARTIES isinconsistent with local law or regulations in such country, MEDIMMUNE shall beable to substitute another country for the exercise of its OPTION under this Section 9.  In the event it is determined after theEFFECTIVE DATE that co-promotion activities by MEDIMMUNE in a majority of theMAJOR MARKETS or a significant region of the TERRITORY (e.g., Europe) isinconsistent with local law or regulations in such markets, the PARTIES agreeto meet in good faith to discuss alternative proposals that would address therespective business objectives of the PARTIES.

 

**9.4****                              ****CO-PROMOTION AGREEMENT**.  Uponthe exercise of one or more CO-PROMOTION OPTIONS or POST-LAUNCH OPTIONS, thePARTIES agree (a) to enter into a co-promotion agreement containing customaryterms for co-promotion of a product of comparable market potential to NUMAX andotherwise consistent with this Section 9 within sixty (60) days ofexercise of the applicable option, and (b) to establish a Joint CommercializationCommittee (**“JCC”**).  The PARTIES shall exert COMMERCIALLYREASONABLE EFFORTS to first meet within forty-five (45) days after theapplicable co-promotion agreement is executed and regularly thereafter asprovided in the co-promotion agreement, to oversee and review the marketingplan, agree upon a sales plan and allocation of the sales efforts between thePARTIES.  Notwithstanding input from theJCC, ABBOTT shall have the final decision in all aspects of thecommercialization of NUMAX in the TERRITORY, including but not limited to,marketing, promotion, sale, distribution, pricing, sales force deployment andallocation in the TERRITORY.  Except asprovided in this Section 9, neither ABBOTT nor MEDIMMUNE shall beentitled to any compensation, remuneration or right of reimbursement ofexpenses in connection with activities undertaken by MEDIMMUNE upon exercise ofa CO-PROMOTION OPTION or POST-LAUNCH OPTION or under the terms of anyco-promotion agreement entered into between the PARTIES.  MEDIMMUNE shall have the right to manage anddirect its sales force in any countries in which a CO-PROMOTION OPTION orPOST-LAUNCH OPTION has been exercised; provided, however, thatsuch management and direction must be in accordance with the marketing andsales plans approved by ABBOTT and to the extent MEDIMMUNE’s sales activitiesare inconsistent with such plans in any such countries and such activities arenot revised to be consistent with such plans following written

 

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notice from ABBOTT, theco-promotion agreement may provide for termination MEDIMMUNE’s co-promotionrights in such country(ies).

 

**9.5****                              ****CO-PROMOTION PRINCIPLES**.  Theamount of the sales/promotion effort to be provided by MEDIMMUNE in any countryin which a CO-PROMOTION OPTION or POST-LAUNCH OPTION has been exercised (i.e.,up to [***] of the total sales/promotion effort contemplated by ABBOTT for thesale of NUMAX in any such country) will be decided from time to time byMEDIMMUNE consistent with the terms of the applicable co-promotion agreement.For clarity, MEDIMMUNE’s co-promotion efforts under this Section 9shall not be included for consideration as exertion of ABBOTT’s COMMERCIALLYREASONABLE EFFORTS to distribute PRODUCTS in the countries in which aCO-PROMOTION OPTION or POST-LAUNCH OPTION has been exercised.

 

**9.6****                              ****RIGHT TO SUBLICENSE**. MEDIMMUNE has the right to sublicense the co-promotion rights uponexercise of a CO-PROMOTION OPTION or a POST-LAUNCH OPTION to an AFFILIATE orTHIRD PARTY subject, in the case of a THIRD PARTY, to ABBOTT’s prior review andconsent, such consent not to be unreasonably withheld (but which consent maytake into account any adversarial relationship between ABBOTT and such THIRDPARTY and the experience and marketing know-how of the THIRD PARTY sublicenseeproposed by MEDIMMUNE).

 

**9.7****                              ****USE OF PERSONNEL**. MEDIMMUNE (or MEDIMMUNE’S sublicenseepursuant to Section 9.6, as applicable) will use its best effortsto ensure that all personnel assigned to co-promote NUMAX upon exercise of aCO-PROMOTION OPTION or POST-LAUNCH OPTION will not be utilized by MEDIMMUNE (orany such sublicensee) to market, promote or sell any product which competeswith NUMAX for a period of at least [***] following any termination of theco-promotion arrangement for NUMAX.

 

**10.****                              ****TRADEMARKS, LOGOS ANDPATENTS****.**

 

**10.1****                       ****SYNAGIS TRADEMARKS**.  Asof the EFFECTIVE DATE, the TRADEMARKS owned by ABBOTT for use in connectionwith the marketing, promotion, sale and distribution of SYNAGIS are as setforth on Exhibit 10.1.  MEDIMMUNEagrees to transfer any TRADEMARKS for SYNAGIS in the TERRITORY to ABBOTT assoon as reasonably practical after the EFFECTIVE DATE.  During the TERM, the TRADEMARKS for SYNAGISin the TERRITORY shall be owned by ABBOTT and ABBOTT shall have soleresponsibility for filing, prosecuting, registering and maintaining all SYNAGISTRADEMARKS in the TERRITORY.  In theevent this AGREEMENT is terminated or expires with respect to SYNAGIS in one ormore countries of the TERRITORY, ABBOTT agrees to promptly transfer ownershipof the TRADEMARKS for SYNAGIS for such countries to MEDIMMUNE, all at no costor expense to MEDIMMUNE.

 

**10.2****                       ****NUMAX TRADEMARKS**. MEDIMMUNE shall be solely responsible for the selection of any proposedtrademarks for use in connection with NUMAX in the TERRITORY and the trademarksproposed by MEDIMMUNE shall become the TRADEMARKS for NUMAX in the TERRITORY; provided,however, that ABBOTT shall have the right to provide recommendations toMEDIMMUNE for TRADEMARKS for NUMAX and MEDIMMUNE agrees to consider in goodfaith all such recommendations; and, provided, further, thatMEDIMMUNE will select proposed trademarks for NUMAX with

 

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the goal of selecting aconsistent global trademark for NUMAX. The TRADEMARKS for NUMAX in the TERRITORY shall be owned by MEDIMMUNEand MEDIMMUNE shall have sole responsibility for filing, prosecuting,registering and maintaining all NUMAX TRADEMARKS in the TERRITORY.  ABBOTT shall cooperate with and assistMEDIMMUNE in obtaining and enforcing such TRADEMARKS in the TERRITORY.  Such cooperation will include the executionof any and all lawful papers that may be deemed necessary or desirable byMEDIMMUNE for the filing and prosecution of the TRADEMARKS and providing suchevidence as may be reasonably requested by MEDIMMUNE to support use of theTRADEMARKS in the TERRITORY.  During the TERM and except as otherwiseprovided in this AGREEMENT, MEDIMMUNE shall grant to ABBOTT a royalty-free,exclusive license to use the TRADEMARK with respect to NUMAX in all countriesof the TERRITORY as to which ABBOTT has rights, which shall be non-cancelable(except as provided in the last sentence of this Section 10.2), andMEDIMMUNE shall perform all acts and sign and execute any and all papersreasonably required to effect such licensing. Unless ABBOTT, in writing, notifies MEDIMMUNE to the contrary, MEDIMMUNEshall pursue registration of the TRADEMARKS for NUMAX in all countries in the TERRITORYin which ABBOTT has obtained or is in the process of actively seekingREGULATORY APPROVAL.  For clarity, ifABBOTT’s rights to NUMAX are terminated or expire in one or more countries inaccordance with this AGREEMENT, the license to use such TRADEMARKS for NUMAX insuch countries shall also terminate and thereafter MEDIMMUNE shall not berestricted in any manner from using such TRADEMARKS in such countries.

 

**10.3**                        **USE OF TRADEMARKS**. During the TERM of this AGREEMENT, ABBOTT and its AFFILIATES shalldistribute and sell PRODUCTS only bearing the TRADEMARKS.  ABBOTT agrees to use the TRADEMARK only withrespect to PRODUCT purchased from MEDIMMUNE and only in those countries of theTERRITORY in which ABBOTT retains the right to distribute such PRODUCT.

 

**10.4****                       ****COSTS ASSOCIATED WITHTRADEMARKS****.  **At its cost and expense, ABBOTT undertakes tocomply with all legal requirements pertaining to the SYNAGIS TRADEMARKS and tomaintain any SYNAGIS TRADEMARKS in force at all times during the TERM in thecountries of the TERRITORY in which ABBOTT retains the right to distributeSYNAGIS.  Any reasonable costs andexpenses incurred by MEDIMMUNE in obtaining or defending a TRADEMARK for aPRODUCT anywhere in the TERRRITORY for ABBOTT’s benefit or related to thetransfer of title to ABBOTT shall be reimbursed in full by ABBOTT.

 

**10.5**                        **INFRINGEMENT OF TRADEMARKS****. **If ABBOTT becomes aware of any infringement of the TRADEMARKS forSYNAGIS within the TERRITORY, ABBOTT shall, at its expense, take such steps asABBOTT may reasonably determine for the protection of its rights in suchTRADEMARKS. The commencement, strategies, termination and settlement of anyaction relating to the validity and/or infringement of such TRADEMARK forSYNAGIS shall be finally decided by ABBOTT. If MEDIMMUNE becomes aware of any infringement of the TRADEMARKS forNUMAX within the TERRITORY, MEDIMMUNE shall, at its expense, take such steps asMEDIMMUNE may reasonably determine for the protection of its rights in suchTRADEMARKS. The commencement, strategies, termination and settlement of any actionrelating to the validity and/or infringement of such TRADEMARK for NUMAX shallbe finally decided by MEDIMMUNE.

 

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**10.6****                       ****REPRESENTATIONS WITH RESPECTTO THIRD PARTY PATENTS**.  MEDIMMUNEacknowledges and agrees that it shall be solely responsible for:  (a) obtaining all appropriate licenses necessaryto make, have made, use, sell or offer for sale the PRODUCTS during the TERM; (b) paying consideration, includingroyalties, to THIRD PARTIES for any intellectual property covering thePRODUCTS; and (c) satisfying any other license obligations of MEDIMMUNE toTHIRD PARTIES to make, have made, use, import, offer for sale, or sellPRODUCTS.

 

**10.7****                       ****NUMAX PATENT MAINTENANCE**. The PARTIES agree that the PATENTS set forthin Exhibit 10.8 relate to NUMAX and are owned by or licensed toMEDIMMUNE as of the EFFECTIVE DATE. MEDIMMUNE shall have responsibility, at its sole cost and expense, formaintaining each of the PATENTS in all countries in the TERRITORY in which suchPATENTS exist in which NUMAX is manufactured, marketed, and sold by ABBOTT. Forpurposes of the foregoing, such maintenance shall include prosecution beforethe relevant patent offices (including oppositions and interferences), and payment of applicable maintenancefees.  MEDIMMUNE shall use itsCOMMERCIALLY REASONABLE EFFORTS to obtain extensions of exclusivity beyond thefull term expiry date of any PATENTS in the TERRITORY as they relate toPRODUCTS, such as a Supplementary Protection Certificate in the European PatentOffice. If MEDIMMUNE elects to abandonits maintenance of any Patent inany country, it shall give prompt written notice to ABBOTT, and ABBOTT may, at its cost and expense,assume the maintenance of said PATENT. The assumption by ABBOTT of the obligation for maintaining the PATENTshall not, in any way, alter or affect MEDIMMUNE’s ownership interest in thePATENTS or MEDIMMUNE’s obligation to indemnify ABBOTT pursuant to Section 11.2.

 

**10.8****                       ****PATENT ENFORCEMENT**.  Inthe event that ABBOTT notifies MEDIMMUNE that ABBOTT believes that a THIRDPARTY is selling a monoclonal antibody against RSV in the TERRITORY whichinfringes a PATENT owned by or licensed to MEDIMMUNE and MEDIMMUNE has theright to bring suit under such PATENT then:

 

(a)                                  MEDIMMUNE shall have the first right to bringan infringement action against such THIRD PARTY at its cost and expense andMEDIMMUNE shall retain all amounts recovered in such action; or

 

(b)                                 if MEDIMMUNE does not initiate such actionwithin one hundred eighty (180) days of written notice of such infringementfrom ABBOTT, at the request of ABBOTT, to the extent that MEDIMMUNE has theright to do so, MEDIMMUNE shall initiate an infringement action against suchTHIRD PARTY at the cost and expense of ABBOTT and ABBOTT shall retain allamounts recovered in such action.

 

In any infringement suitinstituted by MEDIMMUNE to enforce the PATENT rights pursuant to thisAGREEMENT, ABBOTT shall cooperate fully with MEDIMMUNE.  MEDIMMUNE shall notify ABBOTT of anysettlement of any action or proceeding.

 

**11.****                              ****INDEMNITY**

 

**11.1****                       ****INDEMNIFICATION BY ABBOTT**. ABBOTT shall, at its own cost and expense,defend, indemnify and hold harmless MEDIMMUNE and its AFFILIATES and their

 

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licensors related toPRODUCTS and their respective employees, agents, officers, shareholders anddirectors and each of them (a **“MEDIMMUNEINDEMNIFIED PARTY”**) from and against any and all claims, causes ofaction, losses, damages and costs (including reasonable attorney’s fees) of anynature made or asserted against a MEDIMMUNE INDEMNIFIED PARTY or lawsuits orother proceedings filed or otherwise instituted against a MEDIMMUNE INDEMNIFIEDPARTY, as described below (hereinafter individually and collectively a **“MEDIMMUNE LOSS”**):

 

(a)                                  With respect to SYNAGIS, to the extent thatsuch MEDIMMUNE LOSS results or arises from clinical trials, testing, sale oruse of SYNAGIS which is used or sold by or on behalf of ABBOTT and

 

(b)                                 With respect to NUMAX:

 

(i)                                     [***] of any MEDIMMUNE LOSS related to aTHIRD PARTY claim of product liability related to [***], and

 

(ii)                                  to the extent that such MEDIMMUNE LOSSresults or arises from:  (A) [***] or (B)a breach of a statutory duty, representation or warranty or a failure to complywith any covenant or other obligation of ABBOTT set forth in this AGREEMENT;except, in each case, to the extent such MEDIMMUNE LOSS results or arises fromany [***] relating to NUMAX within the TERRITORY conducted by MEDIMMUNE, itsAFFILIATES or licensees under this AGREEMENT;

 

but in all cases describedin (a) and (b) above, ABBOTT shall not have any obligation to indemnifyMEDIMMUNE for the portion of any MEDIMMUNE LOSS that arises or results from thenegligence or willful misconduct of such MEDIMMUNE INDEMNIFIED PARTY.

 

**11.2****                       ****INDEMNIFICATION BY MEDIMMUNE****.** MEDIMMUNE shall, at its own cost and expense, defend, indemnify and holdharmless ABBOTT and its AFFILIATES and their respective employees, agents,officers, shareholders and directors and each of them (an **“ABBOTT INDEMNIFIED PARTY”**) from andagainst any and all THIRD PARTY claims, causes of action, losses, damages,penalties, settlements and costs (including reasonable attorney’s fees) of anynature made or asserted against a ABBOTT INDEMNIFIED PARTY or lawsuits or otherproceedings filed or otherwise instituted against a ABBOTT INDEMNIFIED PARTY,as described below (hereinafter individually or collectively an **“ABBOTT LOSS”**) :

 

(a)                                  With respect to SYNAGIS, to the extent thatsuch ABBOTT LOSS results or arises from the negligence or willful misconduct ofMEDIMMUNE or the infringement of a patent of a THIRD PARTY as a result ofABBOTT’s use or sale of SYNAGIS in the TERRITORY and

 

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(b)                                 With respect to NUMAX:

 

(i)                                     [***] of any ABBOTT LOSS related to a THIRDPARTY claim of product liability related to [***],  and

 

(ii)                                  to the extent that such ABBOTT LOSS resultsor arises from: (A) the negligence or willful misconduct of MEDIMMUNE, (B) abreach of a statutory duty, representation or warranty or a failure to complywith any covenant or other obligation of MEDIMMUNE set forth in this AGREEMENT,(C) [***], or (D) the infringement of a patent of a THIRD PARTY as a result ofABBOTT’s use or sale of NUMAX in the TERRITORY; except, in each case, to theextent such ABBOTT LOSS results or arises from any [***] relating to NUMAXwithin the TERRITORY conducted by ABBOTT, its AFFILIATES or licensees underthis AGREEMENT;

 

but in all cases describedin (a) and (b) above, MEDIMMUNE shall not have any obligation to indemnifyABBOTT for the portion of any ABBOTT LOSS that arises or results from thenegligence or willful misconduct of such ABBOTT INDEMNIFIED PARTY.

 

**11.3****                       ****CONDITIONS TOINDEMNIFICATION****.**  A person or entity that intends to claimindemnification under this Section 11 (the **“INDEMNITEE”**) shall promptly notify theother party (the **“INDEMNITOR”**) ofany loss, claim, damage, liability or action in respect of which the INDEMNITEEintends to claim such indemnification, and the INDEMNITOR shall assume thedefense thereof with counsel mutually satisfactory to the INDEMNITEE whether ornot such claim is rightfully brought; provided, however, that an INDEMNITEEshall have the right to retain its own counsel, with the fees and expenses to bepaid by the INDEMNITOR if INDEMNITOR does not assume the defense, or ifrepresentation of such INDEMNITEE by the counsel retained by the INDEMNITORwould be inappropriate due to actual or potential differing interests betweensuch INDEMNITEE and any other person represented by such counsel in suchproceedings. The indemnity agreement in this Section 11 shall notapply to amounts paid in settlement of any loss, claim, damage. liability oraction if such settlement is effected without the consent of the INDEMNITOR,which consent shall not be withheld or delayed unreasonably. The failure todeliver notice to the INDEMNITOR within a reasonable time after thecommencement of any such action, only if prejudicial to its ability to defendsuch action, shall relieve such INDEMNITOR of any liability to the INDEMNITEEunder this Section 11, but the omission so to deliver notice to theINDEMNITOR will not relieve it of any liability that it may have to anyINDEMNITEE otherwise than under this Section 11. The INDEMNITEE underthis Section 11, its employees and agents, shall cooperate fullywith the INDEMNITOR and its legal representatives in the investigations of anyaction, claim or liability covered by this indemnification.

 

**12.****                              ****ADVERSE DRUG REPORTING**

 

**12.1****                       ****PHARMACOVIGILANCE**. MEDIMMUNE shall lead the global pharmacovigilance with respect to thePRODUCTS, shall maintain the primary global safety database for allPRODUCTS.  With respect to SYNAGIS, thePARTIES agree to work cooperatively to

 

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establish the primary globalsafety database for SYNAGIS and transition any related information held byABBOTT as of the EFFECTIVE DATE to MEDIMMUNE. ABBOTT hereby agrees to transmit to MEDIMMUNE any safety informationwith respect to the PRODUCTS that is obtained by ABBOTT for inclusion in theglobal safety database.  MEDIMMUNE herebyagrees to provide ABBOTT with access to the global safety database such thatABBOTT has all information reasonably necessary for ABBOTT to make regulatoryfilings and take such other actions in accordance with this AGREEMENT.  Each PARTY shall be solely responsible forexpenses incurred by such PARTY relating to the pharmacovigilance activities.

 

No later than ninety (90)days following the EFFECTIVE DATE, the Parties shall enter into an agreement toexchange adverse safety data with respect to each PRODUCT, including but notlimited to, post-marketing spontaneous reports received by the PARTY or its AFFILIATESin order to monitor the safety of each PRODUCT and to meet the reportingrequirements of any applicable REGULATORY AUTHORITY, which agreement shallcontain the terms necessary to effectuate the agreements of the PARTIES as setforth in this Section 12.1.

 

**12.2****                       ****RECALL**.  EachPARTY shall promptly notify the other PARTY in writing of any facts relating tothe advisability of or requiring the quarantine, recall, stop-sale action,destruction or withholding from the market of the PRODUCT anywhere in the world(collectively, a **“RECALL”**). If atany time (a) any governmental or REGULATORY AUTHORITY in the TERRITORY issues arequest, directive or order for a RECALL; (b) a court of competent jurisdictionorders a RECALL in the TERRITORY; or (c) ABBOTT determines, followingconsultation with MEDIMMUNE (except in emergency situations in which there isinsufficient time for such consultation), that a RECALL in the TERRITORY isnecessary or advisable, ABBOTT shall take all appropriate corrective actions toeffect the RECALL, including but not limited to, notifying the relevantREGULATORY AUTHORITIES in the TERRITORY, as appropriate, and MEDIMMUNE shallprovide ABBOTT with such cooperation in connection with the RECALL as ABBOTTmay reasonably request.   All costs andexpenses of any RECALL of SYNAGIS in the TERRITORY shall be borne byABBOTT.  The costs and expenses of anyRECALL of NUMAX in the TERRITORY shall be borne by either ABBOTT, MEDIMMUNE, orboth, in proportion as such RECALL is required as a result of MEDIMMUNE’s orABBOTT’s breach of their obligations hereunder and if no such breach orresponsibility can be so allocated, then the PARTIES shall share the cost ofsuch RECALL equally.

 

**13.****                              ****REPRESENTATIONS ANDWARRANTIES**

 

**13.1****                       ****FULL RIGHT AND AUTHORITY**. Each PARTY warrants and represents that ithas the full right and authority to enter into this AGREEMENT and that it isnot aware of any impediment which would inhibit its ability to perform theterms and conditions imposed on it.

 

**13.2****                       ****LIMITED WARRANTIES**. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTYMAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER EXPRESSOR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,FITNESS FOR A PARTICULAR PURPOSE OR VALIDITY OF ANY PATENTS ISSUED OR PENDING.

 

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**13.3****                       ****COMPLIANCE WITH LAWS**.  ToMEDIMMUNE’s knowledge, the development of NUMAX has not, as of the EFFECTIVEDATE, been conducted in violation of any applicable law, except for anyviolations that have not had or could not reasonably be expected to have,whether singly or in the aggregate, a material adverse effect.  To MEDIMMUNE’s knowledge, all clinical trialsrelating to NUMAX have been conducted in a manner that (a) follows, in allmaterial respects, protocols, procedures and controls generally used byqualified experts in clinical studies, and (b) is consistent in all materialrespects with all applicable laws, including the European Union Directive onData Protection and U.S. equivalents thereof. To MEDIMMUNE’s knowledge, ABBOTT has been provided access to allmaterial data pertaining to the clinical trials involving NUMAX.

 

**13.4****                       ****COMPLIANCE BY SUBCONTRACTORS ANDAFFILIATES**.  The performance of any obligation under this AGREEMENTby a subcontractor, including but not limited to, any THIRD PARTY MANUFACTURER,or AFFILIATE, shall not exculpate the delegating PARTY from its primarilyobligation to the other PARTY under this AGREEMENT.

 

**14.****                              ****TERM AND TERMINATION**

 

**14.1****                       ****TERM**.  ThisAGREEMENT is effective as of the date first above written and, unless soonerterminated as provided herein, shall continue until [***] (the **“TERM”**).

 

**14.2**                        **AGREEMENT TERMINATION**.  ThisAGREEMENT may be terminated by either PARTY if:

 

(a)                                  the other PARTY fails to observe, perform orotherwise breaches any of its covenants, agreements or obligations under thisAGREEMENT in any material respect and such failure continues for a period ofthirty (30) days after receipt by the other Party of notice from the electingPARTY specifying such failure. Following such period, the electing PARTY hasninety (90) days to give notice to the other Party of its election to terminatethis AGREEMENT; or

 

(b)                                 the other PARTY files or institutesbankruptcy, reorganization, liquidation, receivership or similar proceedingsunder any debt relief laws or fails for more than sixty (60) days to take stepsto oppose the initiation of such actions against it.

 

**14.3**                        **PRODUCT/COUNTRY TERMINATION**.

 

(a)                                  If a REVERSION EVENT occurs, then effectiveimmediately upon the occurrence of the REVERSION EVENT, all of ABBOTT’s rightsunder this AGREEMENT to market, promote, sell and distribute NUMAX shallimmediately terminate in all countries of the TERRITORY other than countries inwhich NUMAX has received REGULATORY APPROVAL and in which ABBOTT is activelymarketing, promoting, selling and distributing NUMAX.

 

(b)                                 In addition to any remedies that may beavailable to ABBOTT in law or equity or as otherwise provided elsewhere in thisAGREEMENT, if MEDIMMUNE materially breaches this AGREEMENT, such breach relatesspecifically to one or

 

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more countries (and does notrelate to any payment obligations of MEDIMMUNE under this AGREEMENT) and suchbreach is not cured within thirty (30) days of receipt of written notice fromABBOTT; then ABBOTT may, with written notice to MEDIMMUNE, terminate all ofABBOTT’s rights under this AGREEMENT to market, promote, sell and distributeall PRODUCTS in any or all such countries.

 

(c)                                  In addition to any remedies that may beavailable to MEDIMMUNE in law or equity or as otherwise provided elsewhere inthis AGREEMENT, MEDIMMUNE may, with written notice to ABBOTT, exercise any ofthe following rights in the corresponding circumstances described:

 

(i)                                     If ABBOTT either: (A) does not use itsCOMMERCIALLY REASONABLE EFFORTS to market, promote, sell and/or distribute atleast one PRODUCT in any country of the TERRITORY (and such failure is not dueto a material breach of MEDIMMUNE’s obligations under this AGREEMENT) or notifiesMEDIMMUNE that ABBOTT does not intend to do so; or (B) materially breaches thisAGREEMENT, such breach relates specifically to one or more countries (and doesnot relate to any payment obligations of ABBOTT under this AGREEMENT) and suchbreach is not cured within thirty (30) days of receipt of written notice fromMEDIMMUNE; then in any such case MEDIMMUNE may terminate ABBOTT’s rights underthis AGREEMENT to market, promote, sell and distribute all PRODUCTS in thecountry(ies) with respect to which such uncured breach has occurred; provided,however, that any such termination under Section 14.3(c)(i)(A)shall be delayed as provided in Section 14.3(d) if thecircumstances described therein exist;

 

(ii)                                  If NUMAX is commercially viable in one ormore countries of the TERRITORY (consistent with Section 2.1(b))and ABBOTT does not use its COMMERCIALLY REASONABLE EFFORTS to market, promote,sell and/or distribute NUMAX in such countries as set forth in Section 2.1(b),then MEDIMMUNE may terminate ABBOTT’s rights under this AGREEMENT to market,promote, sell and distribute NUMAX in any country(ies) in which ABBOTT hasfailed to use COMMERCIALLY REASONABLE EFFORTS to market, promote, sell and/ordistribute NUMAX; or

 

(iii)                               If ABBOTT does not use its COMMERCIALLYREASONABLE EFFORTS to obtain REGULATORY APPROVAL for NUMAX in one or more ofthe countries of the MAJOR MARKETS as set forth in Section 6.1 and, provided that such failure is notsignificantly attributable to MEDIMMUNE’S failure or delay in providing supportand documentation reasonably requested by ABBOTT for the purpose of making theREGULATORY FILINGS in the TERRITORY, then MEDIMMUNE may terminate ABBOTT’s rights under this AGREEMENT tomarket, promote, sell and distribute NUMAX in any country(ies) in which ABBOTThas failed to use COMMERCIALLY REASONABLE EFFORTS to obtain REGULATORY APPROVALfor NUMAX.

 

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(c)                                  IfABBOTT’s rights under this AGREEMENT are terminated in one or more countries inaccordance with this Section 14.3, then immediately uponeffectiveness of such termination, such countries shall thereafter be excludedfrom the definitions of TERRITORY and, if applicable, MAJOR MARKETS, for theremainder of the TERM.  With respect to a PRODUCT and a country(ies)as to which ABBOTT’s rights under AGREEMENT are terminated, ABBOTT herebygrants to MEDIMMUNE a non-cancelable, fully paid, royalty-free license to useany and all technical, clinical and regulatory information, filings andlicenses of ABBOTT with respect to such PRODUCT in such country and ABBOTTshall effect prompt transfer thereof to MEDIMMUNE and ABBOTT shall promptlyassign any and all TRADEMARKS for PRODUCTS owned by ABBOTT with respect to anysuch PRODUCTS in any such countries to MEDIMMUNE, all at ABBOTT’s cost.  Termination of ABBOTT’s rights to one or morePRODUCTS in one or more countries under this Section 14.3 shall notaffect ABBOTT’s rights to other PRODUCTS and/or other countries, as applicable.

 

(d)                                 Withrespect to any country as to which MEDIMMUNE exercises its rights set forth in Section 14.3(c)(i)(A),in the event that ABBOTT is marketing, promoting, selling and distributingNUMAX (but not SYNAGIS) in any such country and NUMAX is removed from themarket in such country due to withdrawal of REGULATORY APPROVAL by a REGULATORYAUTHORITY in such country, then effectiveness of MEDIMMUNE’s termination under Section 14.3(c)(i)(A),shall be delayed to the extent: (i) ABBOTT provides written notice to MEDIMMUNEof its intent to recommence the marketing, promotion, sale and distribution ofSYNAGIS in the TERRITORY within [***] of removal of NUMAX from the market and(ii) subject to MEDIMMUNE’s ability to supply SYNAGIS, ABBOTT recommences themarketing, promotion, sale and distribution of SYNAGIS in the TERRITORY within[***] after the removal of NUMAX from the market.  If SYNAGIS has previously been discontinuedin any such country, and ABBOTT provides written notice to MEDIMMUNE asprovided in the previous sentence then, consistent with Section 3.5,MEDIMMUNE may, but shall not be obligated to, supply SYNAGIS in any suchcountry.  If, however, MEDIMMUNE notifiesABBOTT that SYNAGIS will not be supplied in any such country, theneffectiveness of MEDIMMUNE’s termination under Section 14.3(c)(i)(A)shall be further delayed until [***] after MEDIMMUNE makes SYNAGIS available toABBOTT if ABBOTT has not recommenced the marketing, promotion, sale anddistribution of SYNAGIS until that time.

 

**14.4**                        Upon the termination of this AGREEMENT forany reason, ABBOTT shall have the right to sell all PRODUCT in inventory orwhich ABBOTT receives pursuant to FIRM ORDERS placed by ABBOTT prior to suchtermination; provided, however, that ABBOTT agrees not todiscount the remaining PRODUCT in a manner inconsistent with its practicesprior to termination. All such sales of PRODUCT shall be subject to the termsof this AGREEMENT, as in effect immediately prior to termination. If thisAGREEMENT is terminated by MEDIMMUNE for any breach by ABBOTT, then MEDIMMUNE ora THIRD PARTY designated by MEDIMMUNE, may buy back any PRODUCT that remain inthe possession of ABBOTT and are in good condition with a reasonable remainingshelf life at the price at which such PRODUCT was originally paid

 

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by ABBOTT for such PRODUCT.Notwithstanding anything in the foregoing, in the event that upon terminationof this AGREEMENT by MEDIMMUNE, MEDIMMUNE appoints a THIRD PARTY to market,promote, sell and distribute in the TERRITORY, ABBOTT shall have the right tocancel any FIRM ORDERS for the PRODUCTS that are undelivered by MEDIMMUNE.  Upon termination of this AGREEMENT, ABBOTTshall discontinue use of the TRADEMARKS, except in connection with any sale ofPRODUCTS as provided in this Section 14.4, and all such rights toTRADEMARKS shall be transferred to MEDIMMUNE in accordance with Section 10.

 

**14.5**                        The termination of this AGREEMENT shall notaffect any outstanding obligations of ABBOTT or MEDIMMUNE hereunder, includingbut not limited to, any payments owed under the provisions of this AGREEMENTfor PRODUCTS delivered on or prior to the termination of this AGREEMENT. Anysuch amount owed to a party shall be paid within thirty (30) days of thetermination of this AGREEMENT. The provisions Sections 1, 2.1(e),3.2(i), 3.2(l), 8.4, 8.5, 10.1, 11, 14,15 and the last sentence of Section 10.2 shall survive thetermination of this AGREEMENT for the longest period permitted by applicablelaw or as otherwise set forth elsewhere in this AGREEMENT.

 

**14.6**                        Upon termination of this AGREEMENT and at therequest of MEDIMMUNE, to the extent permitted under local law and regulation ofthe country in the TERRITORY, ABBOTT shall take all necessary or appropriateactions, to transfer the REGULATORY APPROVALS and REGISTRATION FILINGS owned byABBOTT with respect to the relevant PRODUCT in such country to MEDIMMUNE or itsdesignee.   MEDIMMUNE shall reimburseABBOTT for all costs associated with such transfers of any REGULATORY APPROVALSto MEDIMMUNE or its designee.   To theextent permitted under local law and regulation in the TERRITORY, MEDIMMUNEand/or its designee shall have the right to reference all REGULATORY APPROVALSand REGISTRATION FILINGS (whether transferred or not) in such country followingtermination of this AGREEMENT.

 

**15.****                              ****MISCELLANEOUS PROVISIONS**

 

**15.1**                        **GOVERNING LAW**.  ThisAGREEMENT shall be governed by and construed in accordance with the laws ofState of Maryland without giving effect to its conflict of law rules andregulations. The United Nations Convention on the International Sale of Goodsshall not apply to this AGREEMENT, nor to any sale of PRODUCT made pursuant tothis AGREEMENT.

 

**15.2**                        **ENTIRE AGREEMENT**.  ThisAGREEMENT sets forth the entire agreement and understanding between the PARTIESas to the subject matter thereof and supersedes all prior agreements in thisrespect, but does not affect the Mutual Confidentiality Agreement, effective asof May 4, 2004, between the PARTIES or the Co-Promotion Agreement, dated as of November 26,1997, by and between MEDIMMUNE and Abbott Laboratories, Inc., an AFFILIATE ofABBOTT, as amended. There shall be no amendments or modifications to thisAGREEMENT, except by a written document which is signed by both PARTIES.

 

**15.4**                        **HEADINGS**.  Theheadings in this AGREEMENT have been inserted for the convenience of referenceonly and are not intended to limit or expand on the meaning of the languagecontained in the particular article or section.

 

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**15.5**                        **NO WAIVER**.  Anydelay in enforcing a PARTY’s rights under this AGREEMENT or any waiver as to aparticular default or other matter shall not constitute a waiver of a party’sright to the future enforcement of its rights under this AGREEMENT, exceptingonly as to an expressed written and signed waiver as to a particular matter fora particular period of time.

 

**15.6****                       ****SEVERABILITY**.  Inthe event any provision of this AGREEMENT should be held invalid, illegal orunenforceable, the remaining provisions shall not be affected or impaired andthe parties will use all reasonable efforts to replace the applicable provisionwithin a valid, legal and enforceable provision which insofar as practicalimplements the purposes hereof.

 

**15.7****                       ****PUBLICITY**.  Each PARTYshall have the right to disclose, in writing or orally, the transactionscontemplated by this AGREEMENT and the relationship of the PARTIES hereunderwith the prior written consent of the other PARTY.  All news releases must be agreed upon inadvance by both PARTIES and submitted by the disclosing PARTY for reviewsufficiently in advance of the scheduled release, but in no event fewer thanten (10) days prior to the scheduled release, to allow the other PARTY areasonable opportunity to review and comment upon the proposed text.  Releases used to support financial disclosureby either PARTY with respect to any PRODUCT will be submitted for review andapproval by the disclosing PARTY as set forth above if the financialinformation also discloses financial information specific to the other PARTY(e.g., the non-disclosing PARTY’s sales revenues, projections, market share,estimates or any other financial data with respect to the PRODUCT obtained bythe disclosing PARTY from the non-disclosing PARTY pursuant to the terms ofthis AGREEMENT).  Notwithstanding theforegoing, each PARTY shall have the right to disclose information about thetransactions contemplated by this AGREEMENT without the other PARTY’s consentif such disclosure is legally required, compelled by court order, required inregulatory filings or in filings or announcements pursuant to stock exchangerules or requirements.  In the event thata disclosure is required under such circumstances, the disclosing PARTY agreesto provide the other PARTY with a draft of any proposed disclosure ten (10)days prior to such disclosure for review and comment (or, if such a period isnot available to comply with the applicable requirement, as much advance noticeas is practicable under the circumstances), the reasons that such disclosure isnecessary, and the time and place that the disclosure will be made.  Notwithstanding the foregoing, nothing inthis AGREEMENT shall be construed as to require MEDIMMUNE to submit to ABBOTTany disclosure related to development, sale and marketing of the PRODUCTSoutside of the TERRITORY.  If eitherPARTY has not responded to the other PARTY within the applicable period setforth in this Section 15.7, such PARTY shall be deemed to haveconsented to the release of such information.

 

**15.7****                       ****ALTERNATE DISPUTE RESOLUTION**** **If a dispute or claim arising out of or in connection with thisAGREEMENT develops between the PARTIES, the respective appropriate officers ofthe PARTIES shall negotiate in good faith in an effort to resolve the disputefor a period of thirty (30) days; provided, however, nothing in this Section 15.8shall prevent either PARTY from seeking equitable relief. The PARTIES may, butare not obligated to, agree to use the alternate dispute resolution procedureset forth in Exhibit C and may file a lawsuit in court to seek redresswith respect to any claimed breach or damage.

 

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**15.8****                       ****FORCE MAJEURE**. Neither PARTY shall be liable to the other for any default hereunder,which is not a payment default, which is due to cause beyond the control of thePARTY in default, including but not limited to the actions or inactions of anyREGULATORY AUTHORITY; breakdown of plant or machinery or shortages of labor,fuel, transportation of materials, fires, floods, earthquakes, war, acts ofterrorism, riots or insurrections, unless such event is directly or indirectlycaused due to the negligence or intentional action or inaction of thedefaulting PARTY. If either PARTY shall seek to rely on Force Majeure, it shallgive written notice to the other indicating the details of the event which itclaims has put due performance of its obligations beyond its control. Inaddition, the affected PARTY shall exert all reasonable efforts to eliminate orcure any Force Majeure event and to resume performance with all possiblespeed.  In the event that a default as aresult of Force Majeure cannot be resolved within six (6) months, the PARTIESshall either resolve the matter by mutual agreement or terminate thisAGREEMENT.

 

**15.9****                       ****SUCCESSORS**.  Therights and obligations included in this AGREEMENT shall be binding upon theparties hereto and their successors and assigns.

 

**15.10****                ****ASSIGNMENT**.  ThisAGREEMENT may not be assigned by either party without the consent of the otherexcept that: (a) MEDIMMUNE may assign this AGREEMENT without consent in theevent of a merger, acquisition or transfer of all or substantially all of itsbusiness or assets relating to this AGREEMENT, and (b) ABBOTT may assign thisAGREEMENT to an AFFILIATE, provided that, in either case, the assigning PARTYshall provide notice of assignment to the other PARTY and that in the case ofany assignment by ABBOTT to an AFFILIATE, ABBOTT and Abbott Laboratories shallremain obligated to fulfill the responsibilities of such AFFILIATE.

 

**15.11****                ****NOTICES****. **Any notice to be given under this AGREEMENT shall be deemed to havebeen sufficiently given and delivered upon the earlier of: (a) when received atthe address set forth below; (b) five (5) business days after being mailed byregistered or certified mail, postage prepaid with return receipt requested,addressed to the party to be notified at its address stated below or at suchother address as may hereafter be furnished in writing to the notifying party;or (c) on the day when sent by facsimile as confirmed by registered orcertified mail. Notices shall be delivered to the respective parties at theaddresses set forth below:

 
| To MEDIMMUNE: |   | MedImmune, Inc.        |            | Copy to: |   | MedImmune, Inc.        |
|---------------|--------|------------------------|-----------------|----------|--------|------------------------|
|          |   | One MedImmune Way      |            |     |   | One MedImmune Way      |
|          |   | Gaithersburg, MD 20878 |            |     |   | Gaithersburg, MD 20878 |
|          |   | Phone: (301) 398-4041  |            |     |   | Phone: (301) 398-4625  |
|          |   | Fax: (301) 398-9041    |            |     |   | Fax: (301) 398-9625    |
|          |   | ATTN:                  | Chief Executive |     |   |                   | ATTN: General Counsel |
|          |   |                   | Officer         |     |   |                   |   |

 

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| To ABBOTT: |   | Abbott International LLC |   | Copy to:  |   | Abbott Laboratories            |
|------------|--------|--------------------------|--------|----------------|--------|--------------------------------|
|       |   | Licensing and Business   |   |           |   | D-364, AP6D                    |
|       |   | Development, AP-34       |   |           |   | 100 Abbott Park Road           |
|       |   | 100 Abbott Park Road     |   |           |   | Abbott Park, IL 60064          |
|       |   | Abbott Park, IL 60064    |   |           |   | Phone: (947) 937-5211          |
|       |   | Phone: (847) 938-7598    |   |           |   | Fax: (847) 938-1342            |
|       |   | Fax: (847) 938-6807      |   |           |   | ATTN: DVP, International Legal |
|       |   | ATTN: DVP, Licensing and |   |           |   |                           |
|       |   | Business Development     |   |           |   |                           |

 

**15.13.****             ****PAYMENTS TO BE PAID IN FULL**. Where any sum due to be paid to MEDIMMUNE hereunder is subject to anywithholding or similar tax, the PARTIES shall use their best efforts to do allsuch acts and things and to sign all such documents as will enable them to takeadvantage of any applicable double taxation agreement or treaty.  In the event there is no applicable doubletaxation agreement or treaty, or if an applicable double taxation agreement ortreaty reduces but does not eliminate such withholding or similar tax, ABBOTTshall pay such withholding or similar tax to the appropriate governmentauthority, deduct the amount paid from the amount due MEDIMMUNE and secure andsend to MEDIMMUNE the best available evidence of such payment.  To the extent that MEDIMMUNE is unable torecover VAT or a similar tax accrued in a country in connection with its supplyof PRODUCT to ABBOTT hereunder, ABBOTT shall exert COMMERCIALLY REASONABLEEFFORTS to assist MEDIMMUNE in recovering such tax.

 

**15.12****                ****CURRENCY CALCULATION**.  Inall cases where calculations or amounts are made or stated in U.S. Dollars,conversion from local currency to U.S. Dollars shall be made as set forth in Section 3.2(f).

 

**[Remainderof this page intentionally left blank.]**

 

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The parties have caused this AGREEMENT to beexecuted by their respective duly authorized representatives as of the date setforth in the preamble above.

 
| ABBOTT INTERNATIONAL LLC |   | MEDIMMUNE, INC.          |
|--------------------------|--------|--------------------------|
|                     |   |                     |
|                     |   |                     |
| By:                      |   |                     |   | By: |   |   |
|                     | Name:  | Holger Liepmann          |   |   | Name: | David M. Mott |
|                     | Title: | Senior Vice President,   |   |   | Title: | President and Chief Executive Officer |
|                     |   | International Operations |   |   |
|                          |        |                          |  |  |  |  |  |  |

 

JOINDER:

The undersigned, Abbott Laboratories, an Illinoiscorporation, hereby joins in the execution of this Amended and RestatedDistribution Agreement for the purpose of obligating itself to the obligationsand undertakings of Abbott International LLC, as set forth in the AGREEMENT.

 
| ABBOTT LABORATORIES |   |
|---------------------|--------|
|                |   |
|                |   |
| By:                 |   |   |   |
|                | Name:  | Holger Liepmann |   |
|                | Title: | Senior Vice President, |   |
|                |   | International Operations |   |
|                     |        |  |  |  |

 

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**EXHIBIT 3.2**

**PRODUCTPRICE DEFINITIONS**

 

For the purposes of Section 3.2 and thisExhibit 3.2, the following capitalized terms have the following meanings(all capitalized terms used but not defined in this Exhibit 3.2, havethe meanings set forth in the AGREEMENT and all section references are tosections of the AGREEMENT):

 

1.                                       “BASE PRICE” of a UNIT of PRODUCT shall meanthe sum of:  (a) [***] of COST ofGOODS for each UNIT of such PRODUCT plus (b) royalties to be paid byMEDIMMUNE to THIRD PARTIES on each UNIT of such PRODUCT.  For purposes of calculating the BASE PRICEsolely with respect to NUMAX, the royalty percentage rate allocable to eachUNIT of NUMAX shall not exceed the greater of the royalty percentage ratesallocable to each UNIT of NUMAX: (i) payable by MEDIMMUNE to its licensors inconnection with the sale of NUMAX outside the TERRITORY, or (ii) payable byMEDIMMUNE to its licensors in connection with the sale of the NUMAX to ABBOTTfor sale within the TERRITORY.  As of theEFFECTIVE DATE, MEDIMMUNE represents and warrants that it has not entered intoany license agreement with respect to NUMAX which disproportionately allocatesa higher royalty rate based on its sales of NUMAX in the TERRITORY as comparedto the royalty rate based on its U.S. sales of NUMAX.  MEDIMMUNE agrees that during the TERM, itwill use COMMERCIALLY REASONABLE EFFORTS to not enter into any such licenseagreements; provided, however, that restriction shall not applyto the extent any such license agreement relates to intellectual property inthe TERRITORY but not outside of the TERRITORY and the economic terms of suchlicense reasonably relate to the value of such intellectual property.

 

2.                                       “CONTRACT PRICE” of a UNIT of any PRODUCTshall mean: (a) the sum of (i) the LOWER PERCENTAGE of that portion ofNET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR that is less thanor equal to the THRESHOLD plus (ii) the HIGHER PERCENTAGE of thatportion of NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR thatis in excess of the THRESHOLD, divided by (b) the total number of UNITSof PRODUCTS included in NET SALES of all PRODUCTS (net of any UNITS whichtriggered a deduction in the applicable NET SALES calculation for returns,recalls, free goods or samples).  For clarity, the CONTRACT PRICE shall becalculated separately for NUMAX and SYNAGIS.

 

3.                                       “ESTIMATED SALE PRICE” of a UNIT of PRODUCTshall mean the greater of:  (a) the BASEPRICE of such UNIT or (b) either:

 

(i)                                     with respect to PRODUCT ordered by ABBOTT anddelivered by MEDIMMUNE prior to the LAUNCH of such PRODUCT in the TERRITORY, anamount equal to: (A) the sum of the LOWER PERCENTAGE of that portion ofESTIMATED NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR that isless than or equal to the THRESHOLD plus the HIGHER PERCENTAGE of thatportion of ESTIMATED NET SALES of all PRODUCTS in the TERRITORY in a CONTRACTYEAR that is in excess of the THRESHOLD divided by (B) the number ofUNITS of PRODUCT estimated to be sold in the TERRITORY (net of any UNITSwhich triggered a deduction in the applicable NET SALES calculation forreturns, recalls, free goods or samples) inthe CONTRACT YEAR upon which ESTIMATED NET SALES PRICE is calculated;

 

(ii)                                  with respect to PRODUCT ordered by ABBOTT anddelivered by MEDIMMUNE on or after LAUNCH of such PRODUCT in the TERRITORY anduntil the end of the first CONTRACT YEAR thereafter, the lesser of:  (A) the ESTIMATED SALE PRICE

 

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calculated in accordancewith subsection (i) or (B) the ESTIMATED SALE PRICE for SYNAGIS calculatedin accordance with subsection (iii) for the CONTRACT YEAR immediatelypreceding the CONTRACT YEAR in which such PRODUCT was delivered; or

 

(iii)                               with respect to PRODUCT ordered by ABBOTT anddelivered by MEDIMMUNE after the first full CONTRACT YEAR following LAUNCH ofsuch PRODUCT in the TERRITORY, an amount equal to: (A) the sum of the LOWER PERCENTAGE of thatportion of NET SALES of all PRODUCTS in the TERRITORY in the first threeCALENDAR QUARTERS of the preceding CONTRACT YEAR that is less than or equal tothe THRESHOLD plus the HIGHER PERCENTAGE of that portion of NET SALES ofall PRODUCTS in the TERRITORY in the first three CALENDAR QUARTERS of thepreceding CONTRACT YEAR that is in excess of the THRESHOLD divided by(B) the number of UNITS of PRODUCT included in NET SALES (net of anyUNITS which triggered a deduction in the applicable NET SALES calculation forreturns, recalls, free goods or samples) forthe first three CALENDAR QUARTERS of the preceding CONTRACT YEAR.

 

Solely for the purposes ofthis paragraph 3, the LAUNCH of the liquid formulation of SYNAGIS shall not beconsidered a LAUNCH (i.e., the ESTIMATED SALE PRICE for the liquid formulationof SYNAGIS shall be calculated based on subsection (iii) above based onthe NET SALES of the lyophilized formulation of SYNAGIS in the precedingCONTRACT YEAR).

 

For clarity, the ESTIMATEDSALE PRICE shall be calculated separately for NUMAX and SYNAGIS.

 

4.                                       “ESTIMATED NET SALES” shall mean theestimated NET SALES of all PRODUCTS by ABBOTT during the first CONTRACT YEARincluding the LAUNCH of PRODUCT by ABBOTT. With respect to NUMAX, to the extent providing such an estimate would becontrary to the applicable laws and regulations of one or more countries in theTERRITORY the NET SALES of SYNAGIS in the previous CONTRACT YEAR in such countriesshall be deemed to be the “ESTIMATED NET SALES” for such countries.

 

5.                                       “FINAL PRICE” of a UNIT of PRODUCT shall meanthe greater of the BASE PRICE of such UNIT or the CONTRACT PRICE of such UNIT.

 

6.                                       “FIRST SEASON PRE-APPROVAL PRODUCT” shall meanUNITS of NUMAX or the liquid formulation of SYNAGIS ordered by ABBOTT beforethe respective first commercial sale of each such PRODUCT in any country in theMAJOR MARKETS in anticipation of receiving REGULATORY APPROVAL for each suchPRODUCT, in each case, intended for sale in the [***] period after therespective first commercial sale of each such PRODUCT in any country in theMAJOR MARKETS.  Upon receipt ofREGULATORY APPROVAL for the applicable PRODUCT and thereafter such PRODUCTshall no longer be deemed to be FIRST SEASON PRE-APPROVAL PRODUCT (except tothe extent of ABBOTT’s payment obligation set forth in Section 3.2(e)).

 

7.                                       “HIGHER PERCENTAGE” shall mean (a) [***] withrespect to all PRODUCT in all circumstances, except in the case of sales of SYNAGISon or (b) after a REVERSION DATE in countries as to which ABBOTT’s rights toNUMAX have terminated pursuant to Section 14.3(a) and for suchsales the HIGHER PERCENTAGE shall be [***].

 

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8.                                       “INVOICE PRICE” shall have the meaning setforth in Section 3.2(b).

 

9.                                       “LOWER PERCENTAGE” shall mean (a) [***] withrespect to all PRODUCT in all circumstances, except in the case of sales ofSYNAGIS on or (b) after a REVERSION DATE in countries as to which ABBOTT’srights to NUMAX have terminated pursuant to Section 14.3(a) and forsuch sales the LOWER PERCENTAGE shall be [***].

 

10.                                 “MINIMUM PRICE” of a UNIT of PRODUCT shallmean:

 

(a)                                  in the case of SAMPLES or FIRST SEASONPRE-APPROVAL PRODUCT, the COST OF GOODS of such UNIT (plus royalties, if any,due by MEDIMMUNE to any THIRD PARTIES on such COST OF GOODS);

 

(b)                                 in the case of NUMAX delivered to ABBOTT(other than SAMPLES or FIRST SEASON PRE-APPROVAL PRODUCT), in the first year offirst commercial sale of NUMAX in any country in the MAJOR MARKETS, the firstCONTRACT YEAR thereafter and any extended period described below (if any),[***] of the ESTIMATED SALE PRICE of such UNIT; or

 

(c)                                  in the case of all other PRODUCT, [***] ofthe ESTIMATED SALE PRICE of such UNIT.

 

In the case of (b) above, atleast ninety (90) days before the end of the first full CONTRACT YEAR after theLAUNCH of NUMAX in the TERRITORY, the PARTIES shall discuss whether a [***]rate applied during the first year of LAUNCH of NUMAX and the first CONTRACTYEAR thereafter would have been to ABBOTT’s financial detriment during thattime period.  If ABBOTT providesreasonable evidence that the [***] rate would have been to ABBOTT’s detriment,the PARTIES shall discuss in good faith extending the [***] rate for anextended period to be mutually agreed upon by the PARTIES.

 

In the case of (c) above,for any given CALENDAR QUARTER, in the event that (i) the change in theweighted-average exchange rate for all the MAJOR MARKETS for that CALENDARQUARTER (calculated as total NET SALES in local currency for the MAJOR MARKETSdivided by total NET SALES in U.S. dollars for the MAJOR MARKETS (calculated inaccordance with Section 3.2(f)) from the weighted-average exchangerate for all the MAJOR MARKETS for the first three CALENDAR QUARTERS of thepreceding CONTRACT YEAR exceeds [***], or (ii) any change in economicconditions, market competition or governmental price regulation in any MAJORMARKET causes a reduction of greater than [***] in the amount of NET SALES orselling price of the PRODUCT in such MAJOR MARKET, the PARTIES will renegotiatein good faith the MINIMUM PRICE for PRODUCT delivered to the carrier for theremaining CALENDAR QUARTERS of the TERM of this AGREEMENT.

 

11.                                 “SAMPLES” shall mean PRODUCT used by ABBOTTor its AFFILIATES for:  (a) clinicaltrials conducted by ABBOTT in accordance with Section 6.9, (b)sampling of NUMAX in accordance with a program which is reviewed and approvedby the DEVELOPMENT COMMITTEE, including but limited to, sampling in connectionwith any expanded access program or in the first year of LAUNCH of NUMAX in anycountry in the TERRITORY or (c) delivery of PRODUCT to REGULATORY AUTHORITIESin connection with REGULATORY FILINGS. SAMPLES must be designated as such by ABBOTT at the time of order.

 

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12.                                 “THRESHOLD” shall mean [***], except that onor after a REVERSION in which ABBOTT’s rights to NUMAX are terminated in allcountries of the TERRITORY pursuant to Section 14.3(a), theTHRESHOLD shall be [***].  In theevent that a REVERSION DATE occurs in the middle of a CONTRACT YEAR or ABBOTT’srights to NUMAX are not terminated in all countries of the TERRITORY pursuantto Section 14.3(a) so that the THRESHOLD is not determinable, thePARTIES shall meet and agree in good faith to revise the definition of CONTRACTPRICE, consistent to the extent possible, with the terms of this AGREEMENT.

 

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