exhibit10-14.htm


    
      	
              Execution
      Version

            	
              
                Exhibit 10.14

                 

                Portions of this Exhibit Have Been
Omitted and Separately Filed
      with the
Securities and Exchange Commission with a
Request for
      Confidential Treatment

              

            


    

     

     

     

     

    AMENDED AND RESTATED
DISCOVERY AND PRECLINICAL DEVELOPMENT
AGREEMENT

     

     

    By and
Between

     

     

    AVENTIS
PHARMACEUTICALS INC.

     

     

    and

     

     

    REGENERON
PHARMACEUTICALS, INC.

     

     

    Dated as of November
10, 2009

     

    

    
    


    TABLE OF CONTENTS

     

    
      	
            	
            	
            	      	Page
	 
	ARTICLE 1
	 
	DEFINITIONS
	 
	ARTICLE 2
	 
	DISCOVERY PROGRAM
	 
	2.1	      	Discovery Program	
            	12
	2.2	
            	Term of the Discovery Program	
            	13
	2.3	
            	Discovery Plans	
            	13
	2.4	
            	Target List	
            	14
	2.5	
            	Commercially Reasonable Efforts;
      Compliance with Laws	
            	16
	2.6	
            	Exchange of Information	
            	16
	2.7	
            	Further Assurances and Transaction
      Approvals	
            	16
	2.8	
            	Exclusive Discovery Program	
            	17
	2.9	
            	Tail Period	
            	20
	2.10	
            	Research Licenses; Licenses Generally	
            	20
	2.11	
            	Immunoconjugates	
            	20
	2.12	
            	Sanofi Target Licenses	
            	22
	2.13	
            	Non-Exclusive License to
Sanofi	
            	22
	2.14	
            	Invention Assignment	
            	22
	2.15	
            	Supply of VelociGene® Mice	
            	22
	2.16	
            	Option for VelocImmune® License	
            	22
	2.17	
            	Option for Additional
    Technologies	
            	23
	2.18	
            	Third Party Platform Licenses	
            	23
	 
	ARTICLE 3
	 
	JOINT RESEARCH COMMITTEE
	 
	3.1	
            	The Joint Research Committee	
            	23
	3.2	
            	Alliance Management	
            	25
	3.3	
            	Resolution of Governance
    Matters	
            	25
	3.4	
            	Obligations of the Parties and their Affiliates	
            	26
	 
	ARTICLE 4
	 
	PAYMENTS
	 
	4.1	
            	Upfront Payment; Reimbursement Payments
      for Manufacturing Expansion	
            	26


    


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      	4.2	      	Discovery Program Costs	      	27
	4.3	
            	Reports and Discovery Program Cost Payments	
            	27
	4.4	
            	**************Opt-in Payment	
            	28
	4.5	
            	Royalty Payments for Royalty Products	
            	29
	4.6	
            	Royalty Term and Reporting	
            	30
	4.7	
            	Payment Method and Currency	
            	30
	4.8	
            	Late Payments	
            	30
	4.9	
            	Taxes	
            	30
	4.10	
            	Special Adjustment	
            	31
	 
	ARTICLE 5
	 
	OPT-IN RIGHTS TO LICENSE PRODUCT
      CANDIDATES
	 
	5.1	
            	Opt-In Rights to License Product
      Candidates	
            	31
	5.2	
            	Process for Opt-In Rights	
            	31
	5.3	
            	Initial Development Plan	
            	32
	5.4	
            	Opt-In Exercise	
            	32
	5.5	
            	Dll4 and REGN 88	
            	32
	5.6	
            	Refused Candidates	
            	32
	 
	ARTICLE 6
	 
	NEWLY CREATED INVENTIONS
	 
	6.1	
            	Ownership of Newly Created Intellectual
      Property	
            	33
	6.2	
            	Prosecution and Maintenance of Patent Rights	
            	35
	6.3	
            	Third Party Claims	
            	37
	 
	ARTICLE 7
	 
	BOOKS, RECORDS AND INSPECTIONS; AUDITS
      AND ADJUSTMENTS
	 
	7.1	
            	Books and Records	
            	37
	7.2	
            	Audits and Adjustments	
            	37
	7.3	
            	IAS/IFRS/GAAP	
            	38
	 
	ARTICLE 8
	 
	REPRESENTATIONS, WARRANTIES AND
      COVENANTS
	 
	8.1	
            	Joint Representations and
      Warranties	
            	38
	8.2	
            	Knowledge of Pending or Threatened Litigation	
            	38
	8.3	
            	Additional Regeneron Representations,
      Warranties and Covenants	
            	39
	8.4	
            	Disclaimer of Warranties	
            	40


    


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      	ARTICLE 9
	 
	CONFIDENTIALITY
	 
	9.1	      	Confidential Information	      	40
	9.2	
            	Injunctive Relief	
            	41
	9.3	
            	Publications	
            	42
	9.4	
            	Disclosures Concerning this
      Agreement	
            	42
	
            	
            	 	
            	
            
	ARTICLE 10
	 
	INDEMNITY
	 
	10.1	
            	Indemnity and Insurance	
            	43
	10.2	
            	Indemnity Procedure	
            	44
	 
	ARTICLE 11
	 
	FORCE MAJEURE
	 
	ARTICLE 12
	 
	TERM AND TERMINATION
	 
	12.1	
            	Term	
            	46
	12.2	
            	Termination For Material
Breach	
            	46
	12.3	
            	Termination for Insolvency	
            	46
	12.4	
            	Termination for Breach of
      Standstill	
            	47
	12.5	
            	Termination for Breach of License and
      Collaboration Agreement	
            	47
	12.6	
            	Effect of Termination by Sanofi for
      Breach	
            	47
	12.7	
            	Effect of Termination by Regeneron for
      Breach	
            	48
	12.8	
            	Survival of Obligations	
            	48
	12.9	
            	Return of Confidential
    Information	
            	49
	12.10	
            	Special Damages	
            	49
	12.11	
            	Termination by Sanofi At Will	
            	50
	 
	ARTICLE 13
	 
	ARBITRATION
	 
	13.1	
            	Binding Arbitration	
            	50
	
            	
            	 	
            	
            
	ARTICLE 14
	 
	MISCELLANEOUS
	 
	14.1	
            	Governing Law; Submission to
      Jurisdiction	
            	51
	14.2	
            	Waiver	
            	52


    


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      	14.3	      	Notices	      	52
	14.4	
            	Entire Agreement	
            	52
	14.5	
            	Amendments	
            	52
	14.6	
            	Interpretation	
            	52
	14.7	
            	Severability	
            	53
	14.8	
            	Assignment	
            	53
	14.9	
            	Successors and Assigns	
            	53
	14.10	
            	Affiliates	
            	53
	14.11	
            	Counterparts	
            	54
	14.12	
            	Third Party Beneficiaries	
            	54
	14.13	
            	Relationship of the Parties	
            	54
	14.14	
            	Limitation of Damages	
            	54
	14.15	
            	Non-Solicitation	
            	54
	14.16	
            	No Strict Construction	
            	54


    


    iv

     

    

    
    


    Execution
Version

     

    AMENDED AND RESTATED
DISCOVERY AND PRECLINICAL DEVELOPMENT
AGREEMENT

     

         THIS AMENDED AND RESTATED DISCOVERY AND PRECLINICAL DEVELOPMENT AGREEMENT
(“Agreement”), dated as of November 10, 2009 (the
“Effective Date”), is by and between AVENTIS PHARMACEUTICALS
INC. (“Sanofi”), a corporation organized under the laws of
Delaware, having a principal place of business at 55 Corporate Drive,
Bridgewater, New Jersey 08807, an indirect wholly owned subsidiary of
Sanofi-Aventis, a company organized under the laws of France with its principal
headquarters at 174, avenue de France, 75103 Paris, France (“Sanofi Parent”), and REGENERON PHARMACEUTICALS, INC., a
corporation organized under the laws of New York and having a principal place of
business at 777 Old Saw Mill River Road, Tarrytown, New York 10591, USA
(“Regeneron”) (with each of Sanofi and Regeneron referred
to herein individually as a “Party” and collectively as the “Parties”).

     

         WHEREAS, Sanofi and Regeneron are parties to a Discovery and Preclinical
Development Agreement dated as of November 28, 2007 (the “Original Agreement”); and

     

         WHEREAS, the Parties have undertaken a broad therapeutic antibody
discovery and development program under the Original Agreement with the
objective of identifying and validating potential drug discovery targets for the
purpose of discovering fully human monoclonal antibody product candidates
against those targets using Regeneron’s proprietary VelocImmune® and related
suite of technologies;

     

         WHEREAS, the Parties plan to expand these antibody discovery and
development efforts under the terms set forth in this Agreement;
and

     

         WHEREAS, Sanofi is interested in continuing to collaborate with Regeneron
to discover and validate potential drug discovery targets for the purpose of
discovering fully human monoclonal antibody product candidates and to receive an
option to license certain rights to the resulting fully human monoclonal
antibodies under the terms set forth in this Agreement and in the License and
Collaboration Agreement (as further defined in Article 1 below);

     

         WHEREAS, the Parties now desire to amend the Original Agreement in
accordance with Section 14.5 of the Original Agreement and restate the
amended Original Agreement as set forth in this Agreement;

     

         NOW, THEREFORE, in consideration of the following mutual promises and
obligations, and for other good and valuable consideration the adequacy and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:

     

    

    
    


    ARTICLE 1

     

    DEFINITIONS

     

         Capitalized terms used in this Agreement, whether used in the singular or
plural, except as expressly set forth herein, shall have the meanings set forth
below:

     

         “Acquired Antibody” shall mean a specific Antibody against a
Program Target in preclinical or clinical development acquired by a Party or its
Affiliate from a Third Party (other than Sanofi Pasteur or Merial Limited in the
case of Sanofi), whether such acquisition is by direct acquisition, by license
or through the acquisition of a Third Party that owns or controls the applicable
Antibody.

     

         “Affiliate” shall mean, with respect to any Person,
another Person which controls, is controlled by, or is under common control with
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract, or otherwise. Without limiting the generality of
the foregoing, a Person shall be deemed to control another Person if any of the
following conditions is met: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
of the United States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in such case
such lower percentage shall be substituted in the preceding sentence,
provided that such foreign investor has the power to
direct the management and policies of such entity. For purposes of this
Agreement, in no event shall Sanofi or any of its Affiliates be deemed
Affiliates of Regeneron or any of its Affiliates nor shall Regeneron or any of
its Affiliates be deemed Affiliates of Sanofi or any of its Affiliates. For
purposes of this Agreement, neither Sanofi Pasteur nor Merial Limited, nor any
of their respective subsidiaries or joint ventures, shall be deemed to be
Affiliates of Sanofi or any of its Affiliates. 

     

         “Agreement” shall have the meaning set forth in the
introductory paragraph, including all Schedules and Exhibits.

     

         “Alliance Manager” shall have the meaning set forth in
Section 3.2.

     

         “Annual Draft Meeting” shall have the meaning set forth in
Section 2.4(a).

     

         “Antibody” shall mean
******************************************.

     

         “Antibody Discovery Plan” shall have the meaning set forth in
Section 2.3.

     

         “Arm” shall mean
********************************************.

     

         “Available Slots” shall mean the difference between ****** and
the total number of Program Targets that were on the Rolling Target List the day
immediately preceding the Special JRC Meeting or Annual Draft Meeting, as the
case may be, as described in Section 2.4(a).

     

         “Aventis Collaboration
Agreement” shall mean the
Collaboration Agreement, dated as of September 5, 2003, by and between
sanofi-aventis US (as successor in interest to Sanofi) and Regeneron, as amended
by the First Amendment, dated as of December 31, 2004, the Second Amendment,
dated as of January 7, 2005, the Third Amendment, dated as of December 21, 2005,
the Fourth Amendment, dated as of January 31, 2006, and Section 11.2 of the
Stock Purchase Agreement, as the same may be further amended from time to
time.

     

    2

     

    

    
    


         *********************************************.

     

         “Business Day” shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York, New York, United States
or Paris, France are authorized or required by Law to remain
closed.

     

         “Collaboration Objectives” shall have the meaning set forth in
Section 2.1(b).

     

         “Commercially Reasonable
Efforts” shall mean the
carrying out of obligations or tasks by a Party in a sustained manner using good
faith commercially reasonable and diligent efforts, which efforts shall be
consistent with the exercise of prudent scientific and business judgment in
accordance with the efforts such Party devotes to products or research or
development projects owned by it of similar scientific and commercial potential.
Commercially Reasonable Efforts shall be determined on a Target-by-Target and
Antibody-by-Antibody (including MTCs) basis in view of conditions prevailing at
the time, and evaluated taking into account all relevant factors; including, but
not limited to the possibility that significant increases in the CPI over the
Term will lead to an increase in the cost of external services and a reduction
in the number of FTEs funded under the Discovery Program; which, in turn, may
adversely affect the likelihood of Regeneron achieving the Collaboration
Objectives.

     

         “Competing Refused Candidate” shall mean any Refused Candidate having the
same Target as a Licensed Product (as long as such Licensed Product is licensed
to Sanofi under the License and Collaboration Agreement at the time the
applicable Product Candidate becomes a Refused Candidate and for the duration of
time for which such Licensed Product is licensed to Sanofi under the License and
Collaboration Agreement).

     

         “Confidential Information” shall have the meaning set forth in
Section 9.1.

     

         “Contract Year” shall mean the period beginning on the
Original Agreement Effective Date and ending on December 31, 2008, and each
succeeding twelve (12) month period thereafter during the term of the Discovery
Program (except that the last Contract Year shall end on the effective date of
any termination or expiration of this Agreement).

     

         “Conventional Antibody” shall mean
***********************************.

     

         “CPI” shall mean the Consumer Price Index – All
Urban Consumers published by the United States Department of Labor, Bureau of
Statistics (or its successor equivalent index).

     

         “CPI Adjustment” shall mean the sum of (a) the percentage
increase or decrease, if any, in the CPI for the twelve (12) months ending June
30 of the Contract Year prior to the Contract Year for which the adjustment is
being made ***********************************. 

     

         “Damages” shall have the meaning set forth in
Section 10.1(a).

     

         “Default Interest Rate” shall have the meaning set forth in
Section 4.7.

     

    3

     

    

    
    


         “Disclosing Party” shall have the meaning set forth in
Section 9.1.

     

         “Discovery Expiration Date” shall mean December 31, 2017.

     

         “Discovery Program” shall mean all research and development
activities performed under the Original Agreement and to be performed under this
Agreement from Target identification, discovery and validation through the
completion of IND Preparation for Product Candidates using Regeneron’s
technologies, Mice and improvements thereto or otherwise, including,
***********, and which shall include, but not be limited to, (a) discovery
research activities directed at Target identification, validation, and
selection, (b) Antibody (including MTCs) discovery, (c) Lead Candidate
identification, characterization, pharmacological assessment (if applicable) and
selection, (d) the production of Antibodies (including MTCs) for preclinical
experiments and Phase I Clinical Trials (and such other clinical trials as may
be agreed by the Parties), and (e) IND Preparation.

     

         “Discovery Program Costs” shall mean all Out-of-Pocket Costs, FTE
Costs and Manufacturing Costs incurred by Regeneron after the Original Agreement
Effective Date directly in connection with the performance of the Discovery
Program (and, as such costs relate to a particular Licensed Product, ending on
the last day of the month preceding the month in which the Opt-In Notice for
such Licensed Product is received by Regeneron).

     

         “Effective Date” shall have the meaning set forth in the
introductory paragraph.

     

         *******************************************.

     

         “Excluded Candidates” shall mean Antibodies (including MTCs)
against Excluded Targets.

     

         “Excluded Targets” shall mean (i) Targets set forth in Schedule
2, (ii) Targets removed from the Rolling Target List pursuant to Section 2.4(b), (iii) Targets excluded or removed from the
Rolling Target List by Sanofi pursuant to Section 2.4(c), (iv) Targets of Sanofi Divested Antibodies,
(v) Targets of Sanofi Regulatory Divested Antibodies, and (vi) Program Targets
that are not included on the Target List during the Tail Period pursuant to
Section 2.9.

     

         “Executive Officers” shall mean the Chief Executive Officer of
Regeneron and the most senior Research and Development Officer of Sanofi Parent,
or their respective designees with equivalent decision-making authority with
respect to matters under this Agreement.

     

         “FDA” shall mean the United States Food and Drug
Administration and any successor agency thereto.

     

         “Force Majeure” shall have the meaning set forth in Article 11.

     

         “FTE” shall mean a full time equivalent employee
(i.e., one fully-committed or multiple partially-committed employees aggregating
to one full-time employee) employed by Regeneron (or its Affiliate) who performs
work under the Discovery Program, with such commitment of time and effort to
constitute one employee performing such work on a full-time basis, which for
purposes hereof shall be ************* per year.

     

    4

     

    

    
    


         “FTE Cost” shall mean, for all activities performed
under the Discovery Program, the product of (a) the number of FTEs performing
activities under the Discovery Program and (b) the FTE Rate.

     

         “FTE Rate” shall mean ********** in the Contract Year
ending December 31, 2009 and *********** in the Contract Year ending December
31, 2010, such amount to be adjusted as of January 1, 2011 and annually
thereafter by the CPI Adjustment.

     

         “GAAP” shall mean generally accepted accounting
principles as applicable in the United States.

     

         “Governmental Authority” shall mean any court, agency, authority,
department, regulatory body, or other instrumentality of any government or
country or of any national, federal, state, provincial, regional, county, city,
or other political subdivision of any such government or any supranational
organization of which any such country is a member.

     

         “IAS/IFRS” shall mean International Financial Reporting
Standards adopted by the International Accounting
Standards Board.

     

         “IFM” shall have the meaning set forth in
Section 2.11(d)(ii).

     

         “Immunize” or “Immunization” shall mean the introduction of an antigen to
a Mouse for the purpose of generating Antibodies against a Target.

     

         “Immunized Target List” shall mean and shall reflect those Targets
identified in Schedule 3, together with Targets for which Immunization has begun
under the Discovery Program after the Effective Date.

     

         “Immunoconjugate” shall mean an Antibody (or derivative or
fragment thereof) linked to a cytotoxic or any molecule potentially able to
enhance the therapeutic activity of such Antibody (or derivative or fragment
thereof), but excluding *********************************.

     

         “IND” shall mean, with respect to each Product
Candidate, an Investigational New Drug Application filed with the FDA with
respect to such Product Candidate pursuant to 21 C.F.R. § 312 before the
commencement of clinical trials involving such Product Candidate, including all
amendments and supplements to such application, or any equivalent filing with
any Regulatory Authority outside the United States.

     

         “IND Preparation” shall mean all drug development activities
in support of a Lead Candidate or Product Candidate up to the filing of the IND
for the Phase I Clinical Trial, including, but not limited to, assay
development, sample analysis, preclinical toxicology, preclinical
pharmacokinetics and toxicokinetics, pharmacological assessment (if applicable),
cell line development and protein chemistry sciences, formulation development,
clinical trial protocol development, IND drafting and data compilation, and
manufacturing preclinical and clinical supplies.

     

         “Indemnified Party” shall have the meaning set forth in
Section 10.2(a).

     

    5

     

    

    
    


         “Indemnifying Party” shall have the meaning set forth in
Section 10.2(a).

     

         “Initial Development Plan” shall have the meaning set forth in
Section 5.3.

     

         “Investor Agreement” shall mean the Investor Agreement, dated as
of December 20, 2007, by and between (a) Sanofi, Sanofi Parent, sanofi-aventis
US LLC, and Sanofi-Aventis Amerique du Nord and (b) Regeneron, as amended as of
the Effective Date, and as the same may be further amended from time to
time.

     

         “Joint Research Committee” or “JRC” shall mean the Joint Research Committee
described in Section 3.1(a).

     

         “Joint Inventions” shall have the meaning set forth in Section 6.1(b).

     

         “Joint Patent Rights” shall mean Patent Rights that cover a Joint
Invention.

     

         “Know-How” shall mean, with respect to each Party and
its Affiliates, any and all proprietary technical or scientific information,
data, test results, knowledge, techniques, discoveries, inventions,
specifications, designs, trade secrets, regulatory filings and other information
(whether or not patentable or otherwise protected by trade secret Law) and that
are not disclosed or claimed by such Party’s Patents or Patent
Applications.

     

         “Law” or “Laws” shall mean all laws, statutes, rules,
regulations, orders, judgments, injunctions, and/or ordinances of any
Governmental Authority in the Territory.

     

         “Lead Candidate” shall mean, for any Program Target, each
Antibody, including MTCs, that satisfies the applicable criteria set forth in
Schedule 4 and is selected by Regeneron to begin IND Preparation under this
Agreement.

     

         “License and Collaboration
Agreement” shall mean the
Amended and Restated License and Collaboration Agreement between the Parties,
dated as of the date of this Agreement, the terms of which are incorporated by
reference into, and are part of, this Agreement, as the same may be amended from
time to time.

     

         “Licensed Product” shall mean any Product Candidate for which
Sanofi has exercised its Opt-In Rights pursuant to Section 5.4 below.

     

         “Licensed Refused Sanofi
Candidate” shall have the
meaning set forth in Section 2.12.

     

         “Manufacturing Cost” shall mean the fully burdened cost (without
mark-up) of manufacturing Product Candidates and Lead Candidates for preclinical
activities and Phase I Clinical Trials (and, if agreed by the Parties other
clinical trials), and the cost for providing dedicated manufacturing capacity
for Lead Candidates and Product Candidates, in each case, as calculated in
accordance with Schedule 5.

     

         “Maximum Annual Discovery Program
Costs” shall have the
meaning set forth in Section 4.2.

     

    6

     

    

    
    


         “Mice” or “Mouse” shall mean
***********************.

     

         “Mice-Derived Therapeutic (or Diagnostic)
Candidate” or
“MTC” shall mean
*************************************.

     

         “Modified Clause” shall have the meaning set forth in
Section 14.7.

     

         “Net Sales” shall mean the gross amount invoiced for
bona fide arms’ length sales of Royalty Products in the Territory by or on
behalf of a Party, or its Affiliates or sublicensees to Third Parties, less the
following deductions, determined in accordance with IAS/IFRS (or GAAP for the
US) consistently applied:

     

                   (a) normal and customary trade, cash, quantity and free-goods allowances
granted and taken directly with respect to sales of such Royalty
Products;

     

                   (b) amounts repaid or credited by reason of defects, rejections, recalls,
returns, rebates, allowances and billing errors;

     

                   (c) chargebacks and other amounts paid on sale or dispensing of Royalty
Products;

     

                   (d) Third Party cash rebates and chargebacks related to sales of Royalty
Products, to the extent allowed;

     

                   (e) retroactive price reductions that are actually allowed or
granted;

     

                   (f) compulsory refunds, credits and rebates directly related to the sale of
Royalty Products, accrued, paid or deducted pursuant to agreements (including,
but not limited to, managed care agreements) or governmental
regulations;

     

                   (g) freight, postage, shipment and insurance costs (or wholesaler fees in
lieu of those costs) and customs duties incurred in delivering Royalty Products
that are separately identified on the invoice or other
documentation;

     

                   (h) sales taxes, excess duties, or other consumption taxes and compulsory
payments to Governmental Authorities or other governmental charges imposed on
the sale of Royalty Products, which are separately identified on the invoice or
other documentation;

     

                   (i) as agreed by the Parties, any other specifically identifiable costs or
charges included in the gross invoiced sales price of such Royalty Product
falling within categories substantially equivalent to those listed above and
ultimately credited to customers or a Governmental Authority or agency
thereof;

     

                   (j) invoiced amounts that are written off as uncollectible in accordance with
a Party’s or its Affiliates’ or sublicensees’ respective accounting principles
as applied consistently Net Sales
in currency other than United States Dollars shall be translated into United
States Dollars according to the provisions of Section 4.7 of this Agreement. 

     

    7

     

    

    
    


    Sales between the
Parties, or between the Parties and their Affiliates or sublicensees, for
resale, shall be disregarded for purposes of calculating Net Sales. Any of the
items set forth above that would otherwise be deducted from the invoice price in
the calculation of Net Sales but which are separately charged to, and paid by,
Third Parties shall not be deducted from the invoice price in the calculation of
Net Sales. In the case of any sale of a Royalty Product for consideration other
than cash, such as barter or countertrade, Net Sales shall be calculated on the
fair market value of the consideration received as agreed by the Parties. Solely
for purposes of calculating Net Sales, if a Party or its Affiliates or
sublicensee sells such Royalty Products in the form of a combination product
containing any Royalty Product and one or more active ingredients (whether
combined in a single formulation or package, as applicable, or formulated or
packaged separately but sold together for a single price in a manner consistent
with the terms of this Agreement) (a “Combination Product”), then prior to the first commercial sale of
such Combination Product, the Parties shall agree on the value of each component
of such Combination Product and the appropriate method for accounting for sale
of such Combination Product. For the avoidance of doubt, for the purposes of
this Agreement, Immunoconjugates shall not be deemed Combination
Products.

     

         “Original Agreement Effective
Date” shall mean November
28, 2007.

     

         “Opt-In Notice” shall have the meaning set forth in
Section 5.4.

     

         “Opt-In Period” shall have the meaning set forth in
Section 5.4.

     

         “Opt-In Report” shall have the meaning set forth in
Section 5.2.

     

         “Opt-In Rights” shall have the meaning set forth in
Section 5.1.

     

         “Out-of-Pocket Costs” shall mean costs and expenses paid to Third
Parties (or payable to Third Parties and accrued in accordance with GAAP) by
Regeneron (or its Affiliate) directly in connection with the performance of the
Discovery Program.

     

         “Party” or “Parties” shall have the meaning set forth in the
introductory paragraph.

     

         “Patent Application” shall mean any application for a
Patent.

     

         “Patent Rights” shall mean unexpired Patents and Patent
Applications.

     

         “Patents” shall mean patents together with all
substitutions, divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions, registrations, patent term adjustments or
extensions, supplemental protection certificates and renewals of any of the
foregoing, and all counterparts thereof in any country in the
Territory.

     

         “Person” shall mean and include an individual,
partnership, joint venture, limited liability company, corporation, firm, trust,
unincorporated organization and government or other department or agency
thereof.

     

    8

     

    

    
    


         “Phase I Clinical Trial” shall mean the first clinical trial of a
Product Candidate following IND Preparation.

     

         “Product Candidate” shall mean any Lead Candidate that
substantially completes IND Preparation and is ready to be offered for license
to Sanofi under the Opt-In Rights.

     

         “Product Patent Rights” shall mean any Patent or Patent Application
having a specification which supports a claim that may be infringed by making,
using, selling, importing or exporting a Lead Candidate or Product Candidate in
the Discovery Program, including, without limitation, any derivatives,
fragments, compositions of matter or uses, thereof. 

     

         “Program Targets” shall mean all Targets on the Target
List.

     

         “Publishing Party” shall have the meaning set forth in
Section 9.3.

     

         “Receiving Party” shall have the meaning set forth in
Section 9.1.

     

         “Refused Candidate” shall have the meaning set forth in
Section 5.6 (i).

     

         “Regeneron” shall have the meaning set forth in the
introductory paragraph.

     

         “Regeneron Indemnitees” shall have the meaning set forth in Section 10.1(a).

     

         “Regeneron Intellectual
Property” shall mean the
Regeneron Patent Rights and the Regeneron Know-How.

     

         “Regeneron Know-How” shall mean any and all Know-How as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Regeneron or any of its
Affiliates (other than Sanofi Know-How and Know-How included in Joint
Inventions) with the right to sublicense the same necessary or useful for the
performance of the Discovery Program.

     

         “Regeneron Next Generation
Technology” shall mean
*************************.

     

         “Regeneron Patent Rights” shall mean those Patent Rights as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Regeneron or any of its
Affiliates (other than Sanofi Patent Rights and Patent Rights included in Joint
Inventions) with the right to sublicense the same and which include at least one
(1) claim which would be infringed by the research, development, manufacture or
use of the Mice or any Target, Antibody (including any MTC), Lead Candidate or
Product Candidate in the Discovery Program.

     

         “Regeneron Sole Inventions” shall have the meaning set forth in
Section 6.1(a).

     

         “Regeneron Target IP” shall mean only those claims in Patent
Rights within the Regeneron
Patent Rights in existence on the termination of the Discovery Program which
would be infringed by the making, using, developing, selling, or importing of an
Antibody (including a MTC) discovered in the Discovery Program against a Program
Target *************************************.

     

    9

     

    

    
    


         “Regulatory Authority” shall mean any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity anywhere in the world with authority over the
activities conducted under the Discovery Program. 

     

         “Rolling Target List” shall mean the rolling list of Targets
designated for Immunization under the Discovery Program over a two-Contract Year
period, as initially prepared and thereafter revised in accordance with
Section 2.4. 

     

         “Royalty Product” shall mean
***************************************.

     

         “Royalty Term” shall have the meaning set forth in
Section 4.5. 

     

         “Sanofi” shall have the meaning set forth in the
introductory paragraph. 

     

         “Sanofi Divested Antibody” shall have the meaning set forth in
Section 2.8(b)(iii). 

     

         “Sanofi Indemnitees” shall have the meaning set forth in
Section 10.1(b). 

     

         “Sanofi Intellectual
Property” shall mean the
Sanofi Patent Rights and the Sanofi Know-How. 

     

         “Sanofi Know-How” shall mean any and all Know-How as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program (including the Tail Period) owned by, licensed to or otherwise held by
Sanofi or any of its Affiliates (other than Regeneron Know-How and Know-How
included in Joint Inventions) with the right to sublicense the same necessary or
useful for the performance of the Discovery Program.

     

         “Sanofi Patent Rights” shall mean those Patent Rights as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Sanofi or any of its
Affiliates (other than Regeneron Patent Rights and Patent Rights included in
Joint Inventions) with the right to sublicense the same and which include at
least one (1) claim which would be infringed by the research, development,
manufacture or use of the Mice or any Target, Antibody (including any MTC), Lead
Candidate or Product Candidate in the Discovery Program. 

     

         “Sanofi Regulatory Divested
Antibody” shall have the
meaning set forth in Section 2.8(b)(v). 

     

         “Sanofi Sole Inventions” shall have the meaning set forth in
Section 6.1(a). 

     

         “Sanofi Sole Projects” shall have the meaning set forth in
Section 2.8(b)(iii). 

     

         “Sanofi Targets” shall have the meaning set forth in Section 2.4.


     

    10 

     

    

    
    


         “Sanofi Target IP” shall mean only those claims in Patent
Rights within the Sanofi Patent Rights in existence on the termination of the
Discovery Program, including the Tail Period, which would be infringed by the
making, using, developing, selling, or importing of (a) any Licensed Refused
Sanofi Candidate (*************************), (b) any Sanofi Divested Antibody
(*******************************), (c) any Failed MTC as referred to in Section
2.11(c) or ***************** as referred to in Section 2.11(b), (d) any Sanofi
Regulatory Divested Antibody (**********************************), (e) in the
case of Section 12.8, any Antibody (including any MTC) discovered in the
Discovery Program against a Program Target (******************************),
or(f) any MTC (and, if applicable, any other Antibody) referred to in Section
12.11(b) (*****************************), as the case may be. For the avoidance
of doubt, the parenthetical references in (a), (b), (d), (e), and (f) above are
included to limit the Patent Rights ************************** to only those
Patent Rights that would ******************************. These parenthetical
references do not limit other Patent Rights included in this definition. “Sole
Inventions” shall have the meaning set forth in Section 6.1(a).

     

         “Solely Developed
Immunoconjugate” shall
have the meaning set forth in Section 2.11(b). 

     

         “Special JRC Meeting” shall have the meaning set forth in
Section 2.4(a).

     

         “Stock Purchase Agreement” shall mean the Stock Purchase dated as of
the Original Agreement Effective Date by and between (a) Sanofi, sanofi-aventis
US LLC, and Sanofi-Aventis Amerique du Nord and (b) Regeneron.

     

         “Tail Period” shall have the meaning set forth in
Section 2.9. 

     

         “Target” shall mean any gene, receptor, ligand, or
other molecule (a) potentially associated with a disease activity, and (b) which
potentially has a biological activity that is modified by direct interaction
with an Antibody, including any MTC, or (c) to which an Antibody, including any
MTC, binds, ***********************************. 

     

         “Target Discovery Plan” shall have the meaning set forth in
Section 2.3. 

     

         “Target List” shall mean the list of Targets on the
Rolling Target List and the Immunized Target List, but excluding Excluded
Targets. 

     

         “Term” shall have the meaning set forth in Section 12.1.


     

         “Territory” shall mean all the countries and territories
of the world. 

     

         “Third Party” shall mean any Person other than Sanofi or
Regeneron or any Affiliate of either Party. 

     

         “Third Party Opportunities” shall have the meaning set forth in
Section 2.8(a)(ii). 

     

         “Valid Claim” shall mean a claim of an issued and
unexpired Patent (including the term of any patent term extension, supplemental
protection certificate, renewal or other extension) which has not been held
unpatentable, invalid or unenforceable in a final decision of a court or
other Government Authority of
competent jurisdiction from which no appeal may be or has been taken, and which
has not been admitted to be invalid or unenforceable through reissue,
reexamination, disclaimer or otherwise. 

     

    11 

     

    

    
    


    ARTICLE 2 

     

    DISCOVERY PROGRAM 

     

              2.1 Discovery Program. (a) From the Effective Date, the objective
of the Parties during the Discovery Program is for Regeneron to discover,
identify and/or validate Targets from which Regeneron shall select Targets for
the Rolling Target List, generate MTCs (and, if agreed to by the JRC, other
Antibodies) against Program Targets (including Program Targets that are Sanofi
Targets) from which to select Lead Candidates, and develop such Lead Candidates
through IND Preparation to offer to Sanofi for joint development and
commercialization under the terms set forth herein and in the License and
Collaboration Agreement. During the first ten (10) Contract Years, Regeneron
will use Commercially Reasonable Efforts to discover, identify and validate
Targets as part of the Discovery Program. The Parties will select Targets for
the Rolling Target List pursuant to Section 2.4.
*****************************************************. Regeneron will use
Commercially Reasonable Efforts to generate MTCs (and if agreed by the JRC,
other Antibodies) against Program Targets and manufacture preclinical and
clinical supplies of the Lead Candidates and Product Candidates for the
Discovery Program and Phase 1 Clinical Trials. The JRC will evaluate and
prioritize Program Targets. Subject to the JRC’s prioritization of Program
Targets, Sanofi’s Target selection and exclusion rights under Section 2.4, and the other terms of this Agreement,
Regeneron will have sole responsibility for the design and conduct of all
activities under the Discovery Program, including, without limitation, decisions
relating to initiation and termination of programs and activities, manufacturing
activities, and staffing and resource allocation between different programs and
activities in the Discovery Program. The JRC will also prioritize the
Antibodies, including MTCs, to be further pursued as Lead Candidates, and
Regeneron will commence IND Preparation activities only for those Antibodies,
including MTCs, that meet the applicable criteria set forth in Schedule 4.
Sanofi shall be responsible for completing relevant portions of Schedule 4 for
all Sanofi Targets at the time that such Target is selected for the Rolling
Target List to the extent such information is not available at Regeneron.
Sanofi, through the JRC, will provide consultation and advice to support
Regeneron’s efforts. Neither
Regeneron nor Regeneron’s representative on the JRC shall have the right to
discriminate against Sanofi Targets without the agreement of Sanofi’s
representatives on the JRC. 

     

                   (b) In addition to the broad objectives of the Parties set forth in
Section 2.1(a), above, commencing from Contract Year 3
(January 1, 2010) and except as set forth in Section 4.9, the annual objectives of the Discovery
Program for each Contract Year through the Discovery Expiration Date (the
“Collaboration Objectives”) are *************************. Regeneron
shall use Commercially Reasonable Efforts to achieve the Collaboration
Objectives. For the avoidance of doubt, (i) nothing in the preceding sentence
shall require Regeneron to use efforts beyond the FTEs and Out-of-Pocket Costs
reimbursed by Sanofi under this Agreement, and (ii) if Regeneron exercises
Commercially Reasonable Efforts to achieve the Collaboration Objectives, then the failure to achieve the
Collaboration Objectives shall not be considered a breach of this Agreement.


     

    12 

     

    

    
    


                   (c) As part of the Discovery Program, Regeneron may
**********************************.

     

              2.2 Term of the Discovery
Program. The Discovery
Program commenced on the Original Agreement Effective Date and shall end on
December 31, 2017 unless (a) this Agreement is earlier terminated in accordance
with Article 12, in which event the Discovery Program shall
end on the effective date of such termination or (b) extended by Sanofi for the
Tail Period pursuant to the terms of Section 2.9 in which event the Discovery Program shall
end upon the earlier of the expiration of the Tail Period or the earlier
termination of this Agreement.

     

              2.3 Discovery Plans. Regeneron will annually prepare a
“Target Discovery Plan” and an “Antibody Discovery Plan” for the Discovery Program.

     

                   (a) The Target Discovery Plan shall set forth the overall strategy, plan and
goals over the next Contract Year for identifying and validating Targets from
which Regeneron shall choose its Targets for the Rolling Target List; it being
understood that the Target Discovery Plan will not include information on the
identity of Targets that are the subject of Regeneron’s discovery research
activities under the Discovery Program that have not yet been selected as
Program Targets. The Target Discovery Plan will also include an estimated budget
for the portion of the Discovery Program covered by the Target Discovery Plan
for the ensuing Contract Year. Regeneron will submit each Target Discovery Plan,
including the estimated budget, to the JRC for review and comment.

     

                   (b) The Antibody Discovery Plan shall set forth the overall strategy and
plans over the next Contract Year for generating Antibodies against Program
Targets, conducting research on Program Targets and Antibodies generated against
Program Targets, and preclinically developing Antibodies under the Discovery
Program through IND Preparation. The Antibody Discovery Plan will also include
an estimated budget for the portion of the Discovery Program covered by the
Antibody Discovery Plan for the ensuing Contract Year. Regeneron will submit
each Antibody Discovery Plan, including the estimated budget, to the JRC for
review and comment. For each Lead Candidate, the Antibody Discovery Plan will
include activities and a planned timeline for IND Preparation. Regeneron shall
consider in good faith comments on the Antibody Discovery Plan from Sanofi’s
representatives on the JRC.

     

                   (c) Except for the initial Target Discovery Plan and Antibody Discovery Plan
(which will be provided to the JRC within ninety (90) days of the Effective
Date), Regeneron will present an updated Target Discovery Plan and Antibody
Discovery Plan to the JRC at least two (2) months prior to the end of each
Contract Year.

     

    13 

     

    

    
    


              2.4 Target List. 

     

                   (a) Subject to the other terms of this Section
2.4, (i) the Rolling
Target List will include up to ************* designated for Immunization in each
two-consecutive Contract Year period, and ********************************* (all
such Targets selected by Sanofi for the Rolling Target List pursuant to this
Section
2.4 being referred to as
“Sanofi Targets”). The Parties shall conduct a meeting of the
JRC within ten (10) Business Days of the Effective Date (the “Special JRC Meeting”) to ***********************************. The
Rolling Target List will be updated on an annual basis at a meeting of the JRC
to be held in January of each Contract Year, commencing in 2010 and ending in
2017 (the “Annual Draft Meeting”). At least thirty (30) days prior to the
Annual Draft Meeting to be held in 2017, Regeneron shall provide to Sanofi
information on the identity and status of Targets validated by Regeneron under
the Discovery Program that were not previously selected as Targets on to the
Rolling Target List. Targets on the Rolling Target List are progressed from the
Rolling Target List to the Immunized Target List at commencement of
Immunization. Any Targets on the Rolling Target List which have not progressed
to the Immunized Target List during a Contract Year shall remain on the Rolling
Target List, subject to Sections 2.4(b), 2.4(c), and 2.8 below. At each Annual Draft Meeting, the
Parties shall select Targets for the Available Slots to bring the total number
of Targets on the Rolling Target List back to ********. At the Special JRC
Meeting and each Annual Draft Meeting, the Parties shall alternate selecting
Targets for the Available Slots on the Rolling Target List, with Sanofi
designating first, Regeneron second and the process repeating until Sanofi has
selected as many Targets as it desires up to
*************************************. Regeneron shall designate all Targets for
the Available Slots remaining after Sanofi’s selections pursuant to this Section 2.4(a). For
clarity, an Excluded Target cannot be selected onto the Rolling Target List
without the mutual consent of the Parties. All Targets selected by the Parties
for the Rolling Target List pursuant to this Section 2.4 shall be identified by their HUGO name, if
applicable.

     

                   (b) Targets may be removed from the Rolling Target List or replaced by new
Targets at any time prior to Immunization by the mutual written consent of the
Parties. Targets removed (either by removal or replacement) from the Rolling
Target List pursuant to this Section 2.4(b) shall become Excluded Targets. Each Party
shall have the right to select up to **************** to be added to the Rolling
Target List outside the applicable Annual Draft Meeting at any time during each
Contract Year (such Party being a “Pre-Selecting
Party”). The applicable Pre-Selecting Party shall be considered to have
included the applicable Target(s) onto the Rolling Target List upon its written
notice to the other Party. Unless the Target selected by the Pre-Selecting Party
is excluded or removed from the Rolling Target List pursuant to Section 2.4(c) or Section 2.8, it shall be considered one of the Targets
selected by the Pre-Selecting Party for the Rolling Target List at the next
scheduled Annual Draft Meeting and the number of Targets the Pre-Selecting Party
may select for the Available Slots at such Annual Draft Meeting shall be reduced
accordingly. In addition, Regeneron shall have the right to replace a Target
removed from the Rolling Target List by Sanofi pursuant to Section 2.8 at any time during each Contract Year upon
written notice to Sanofi.

     

                   (c) Sanofi shall have the right to exclude from the Rolling Target List a
Target selected by Regeneron for the Rolling Target List as provided in Section 2.4(c)(i), and shall have the
right to remove a Program Target from the Target List, as provided in
Sections 2.4(c)(ii) and (iii).

     

    14 

     

    

    
    


                  
(i) Sanofi shall have the right to exclude from the Rolling Target List a
Target selected by Regeneron for the Rolling Target List (a “Regeneron Selected Target”) if at the time of selection by Regeneron of
such Regeneron Selected Target either (A) Sanofi or its Affiliate has an
existing Antibody against the
Regeneron Selected Target that is ****************, (B) Sanofi or its Affiliate
has *****************************, or (C) Sanofi or its Affiliate has
**************** or has ********************. With respect to its exclusion
rights under Section 2.4(c)(i)(C), Sanofi may neither ************ for the
Rolling Target List in any Contract Year, nor ******************* over any
rolling three (3) Contract Year period. Sanofi must notify Regeneron of its
exclusion pursuant to this Section 2.4(c)(i) within ten (10) Business Days of
the Annual Draft Meeting or Special JRC Meeting at which Regeneron selects the
applicable Regeneron Selected Target or Sanofi’s receipt of written notice from
Regeneron regarding Regeneron’s selection of a Regeneron Selected Target
pursuant to Section 2.4(b) above or this Section 2.4(c)(i). Sanofi’s exclusion
of a Regeneron Selected Target pursuant to this Section 2.4(c)(i) must be
followed promptly by written notice to Regeneron that describes the condition in
either (A), (B), or (C) above that has been met supporting the Target exclusion.
Regeneron shall have ten (10) Business Days from the exclusion of a Target under
this Section 2.4(c) to select replacement Regeneron Selected Target(s) for the
Rolling Target List under Section 2.4(a) or Section 2.4(b), as the case may be,
in which case the terms of this Section 2.4(c) shall remain in
effect.

     

                   (ii) Sanofi shall have the
right to remove a Target from the Rolling Target List upon written notice to
Regeneron if, ******************************** Regeneron has failed to progress
a Target to the Immunized Target List. Sanofi shall have thirty (30) days from
the Third Anniversary Date to exercise its right to remove the applicable Target
from the Rolling Target List under this Section 2.4(c)(ii). 

     

                   (iii) Sanofi shall have the
right to remove a Program Target from the Immunized Target List upon written
notice to Regeneron if, **************************************** Regeneron is no
longer actively working on Antibodies against the applicable Target under the
Discovery Program, or (B) *************************************, Regeneron has
failed to submit an Opt-In Report for a Product Candidate against such Program
Target. Sanofi shall have thirty (30) days from the applicable
********************** to exercise its right to remove the applicable Program
Target from the Immunized Target List under this Section 2.4(c)(iii).


     

                   (d) Within sixty (60) days
after the end of Contract Year 5 (ending December 31, 2012), the Executive
Officers of both Parties may agree that the maximum percentage of Targets that
Sanofi may select for the Rolling Target List should change
**********************************. In deciding whether to make such a change,
the Executive Officers shall take into consideration, among other criteria
agreed to by the Executive Officers, ************************************. If
the Executive Officers both agree to change the maximum percentage of Targets
Sanofi may select for the Rolling Target List, then the Parties will promptly
enter into an amendment to this Agreement solely for the purpose of amending the
terms of Section 2.4(a) to reflect the new agreed upon percentage for
each of the remaining Contract Years for which the Rolling Target List has not
been designated. 

     

    15 

     

    

    
    


              2.5 Commercially Reasonable Efforts; Compliance
with Laws. During the term
of the Discovery Program, Regeneron will use Commercially Reasonable Efforts to
discover and develop Product Candidates to offer for license to Sanofi pursuant
to the Opt-In Rights. Without limiting the foregoing, Regeneron will use
Commercially Reasonable Efforts to identify Lead Candidates and complete IND
Preparation for Lead Candidates in a timely manner during the term of the
Discovery Program. Each Party hereby covenants and agrees to comply with
applicable Laws in performing activities connected with the Discovery Program.


     

              2.6 Exchange of Information. Regeneron will share information with the
JRC in a timely manner concerning the progress of the Target Discovery Plan and
the Antibody Discovery Plan consistent with Sections 2.3 and 3.1(b). Without limiting the foregoing, at least
five (5) calendar days prior to each regular quarterly meeting of the JRC,
Regeneron will use its Commercially Reasonable Efforts to provide to Sanofi’s
representatives on the JRC a written report (in electronic form) summarizing the
material activities undertaken by Regeneron in connection with the Target
Discovery Plan and the Antibody Discovery Plan, including information concerning
new Program Targets, Lead Candidates and Product Candidates. Sanofi shall have
the right to reasonably request and to receive in a timely manner clarifications
and answers to questions with respect to such reports (other than with respect
to the identity and progress of Targets in the Target Discovery Plan which are
not Program Targets) and any other data and any other information it reasonably
requests with respect to the conduct of the Target Discovery Plan and the
Antibody Discovery Plan.

     

              2.7 Further Assurances and Transaction
Approvals. Upon the terms
and subject to the conditions hereof, each of the Parties will use Commercially
Reasonable Efforts to (a) take, or cause to be taken, all actions necessary,
proper or advisable under applicable Laws or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (b) obtain from the
requisite Governmental Authorities any consents, licenses, permits, waivers,
approvals, authorizations, or orders required to be obtained or made in
connection with the authorization, execution, and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement, and (c)
make all necessary filings, and thereafter make any other advisable submissions,
with respect to this Agreement and the transactions contemplated by this
Agreement required under applicable Laws. The Parties will cooperate with each
other in connection with the making of all such filings, including by providing
copies of all such non-confidential documents to the other Party and its
advisors prior to the filing and, if requested, by accepting all reasonable
additions, deletions, or changes suggested in connection therewith. Each Party
will furnish all information required for any applicable or other filing to be
made pursuant to the rules and regulations of any applicable Laws in connection
with the transactions contemplated by this Agreement. 

     

    16

     

    

    
    


              2.8 Exclusive Discovery Program.

     

                   (a) Exclusivity.

     

                   (i) General. Subject to the other subparagraphs in this
Section 2.8, until the end of the Term, neither Party nor
any of their respective Affiliates will either directly, or with any Third
Party, work to discover Antibodies against, or develop or commercialize
Antibodies against, Program Targets in the Territory, except pursuant to this Agreement or the
License and Collaboration Agreement. Furthermore, subject to the other
subparagraphs in this Section 2.8, until the earlier to occur of (A) the
Discovery Expiration Date, and (B) the effective termination of this Agreement,
neither Regeneron nor any of its Affiliates will, either directly or with any
Third Party, work to discover, develop or commercialize Antibodies in the
Territory, except pursuant to this Agreement or the License and Collaboration
Agreement. Solely as used in this Section 2.8(a) and in Section 2.8(b), the terms “develop,” “developing” or
“development” shall mean any and all activities related to Antibody discovery
and Antibody preclinical and clinical development. In the event this Agreement
is terminated early pursuant to Sections 12.2, 12.3, 12.4, 12.5, or 12.11, the obligations stated in this Section 2.8(a) shall also terminate as of the effective date
of such early termination.

     

                   (ii) Third Party Opportunities. Subject to the other sub-paragraphs in this
Section 2.8, as part of the Discovery Program, the
Parties may evaluate new Targets, Antibodies, and antibody technologies owned or
controlled by Third Parties (“Third Party Opportunities”) to determine whether such Targets,
Antibodies or antibody technologies should be licensed or acquired by the
Parties for the Discovery Program. Should a Party identify such a Third Party
Opportunity that it is interested
in acquiring or licensing for inclusion in the Discovery Program, it shall
notify the other Party for consideration and discussion. If the Parties approve
the inclusion of such Third Party Opportunity in the Discovery Program, the
Parties shall decide which Party will license or otherwise acquire rights to the
Third Party Opportunity and include the applicable Target, Antibody or antibody
technology, as the case may be, in the Discovery Program. If the applicable
Third Party Opportunity is licensed or acquired *******************************
with respect to the conduct of the Discovery Program as being conducted at the
time of such license or acquisition (such licenses being governed by Section
2.18 hereof) *******************************except that, at Regeneron’s option,
its share, or a portion of its share, of such costs shall be included in
Out-of-Pocket Costs under this Agreement and applied to the calculation of the
Maximum Annual Discovery Program Costs for one or more years as the Parties may
agree.

     

                   (b) Exclusions.

     

                   (i) Excluded Candidates. Each Party (and its Affiliates) shall have
the right to develop and commercialize Excluded Candidates either on its own or
with Third Parties outside the Discovery Program without restriction under this
Agreement; provided that Sanofi shall have no rights under this Agreement to any
Excluded Candidates developed under the Discovery Program. Regeneron shall have
and retain exclusive rights to any such Excluded Candidates developed in the
Discovery Program against such Excluded Target without restrictions under this
Agreement, subject to the royalty obligations set forth in Section 4.5. Regeneron may continue to develop and
commercialize (on its own or with one or more Third Parties) any such MTCs or
other Antibodies (or any Acquired
Antibodies of Regeneron) against Excluded Targets and may practice and use any
Regeneron Intellectual Property, including, without limitation, the Mice, in
connection with the development of Antibodies against Excluded
Targets.

     

    17 

     

    

    
    


                   (ii) Refused Candidates. Regeneron (and its Affiliates) shall have
the right to develop and commercialize Refused Candidates outside the Discovery
Program as set forth in Section 5.6 below,
**********************. 

     

                   (iii) Sanofi Acquired Antibodies. Sanofi and its Affiliates shall have the
right to develop and commercialize Acquired Antibodies that are the subject of
filed INDs, whether such acquisition is by direct acquisition, by license or
through acquisition of a Third Party) (a “Sanofi Acquired Antibody”), even if such Sanofi Acquired Antibodies
are against Program Targets. Sanofi shall promptly notify Regeneron of any such
acquisition or license (including the identity of the Program Target), and may
continue the development of such Sanofi Acquired Antibody without restriction
outside the Discovery Program and this Agreement. In the event of such an
acquisition or license, unless otherwise agreed to by the Parties, the
applicable Program Target shall be considered an Excluded Target and Sanofi
shall no longer have any rights to any Excluded Candidates against such Excluded
Target developed under this Agreement (such Antibodies being referred to herein
as “Sanofi Divested Antibodies”). Regeneron may develop and commercialize
(on its own or with one or more Third Parties) any Sanofi Divested Antibodies or
other Excluded Candidates against such Excluded Targets, and may practice and
use any Regeneron Intellectual Property, including, without limitation, the
Mice, in connection with such activities without restrictions under this
Agreement, subject to the royalty obligations set forth in Section 4.5. Until the time of IND filing for a Sanofi
Divested Antibody, Regeneron shall have the right to consider development of
Sanofi Divested Antibodies against the applicable Excluded Target as development
under the Discovery Program solely for purposes of seeking reimbursement of
Discovery Program Costs pursuant to Section 4.2.

     

                   (iv) Company Acquisitions For clarification, where a Party or its
Affiliate acquires rights to an Acquired Antibody by the acquisition of a Third
Party or part or the whole of its business, the applicable acquiring Party may
as an alternative to any obligations herein, divest such Acquired Antibody (by
sale or license) **********************************. 

     

                   (v) Regulatory Divestitures. In the event that Sanofi acquires rights to
an Acquired Antibody as a result of its acquisition of a Third Party and
believes, based on the reasonable advice of its outside legal counsel, that it
is required by Law to divest its interest in the Antibodies against a Program
Target, then Sanofi shall have the right to exclude such Program Target from the
Discovery Program, and develop and commercialize such Acquired Antibodies
against such Program Target outside the Discovery Program and the terms of this
Agreement. Sanofi shall no longer have any rights to any Antibodies, including
MTCs, against such Program Target under this Agreement (“Sanofi Regulatory
Divested
Antibodies”) other than
rights to future royalties pursuant to Section 4.5(iv); however, such Sanofi
Regulatory Divested Antibodies shall be considered in the Discovery Program
solely for purposes of Section 4.2 until the earlier to occur of either (y) the
time of any IND filing for the applicable Product Candidate or (z) twelve (12)
months from the date Sanofi divests its interest in the applicable Antibody in
the Discovery Program. ***************************. Either Party shall have the
right to develop and commercialize Antibodies against Target(s) of the Sanofi
Regulatory Divested Antibodies outside the Discovery Program and the terms of
this Agreement, and Regeneron shall have and retain exclusive rights to any
Antibodies, including MTCs, discovered under the Discovery Program against such
Program Target(s) without restrictions under this Agreement.

     

    18 

     

    

    
    


                   (vi) Technology Licenses. Regeneron shall have the right to grant
non-exclusive licenses to its Mice and other Regeneron Intellectual Property
related to the Mice (and related technologies) and Regeneron Next Generation
Technology to Third Parties, including, without limitation, universities and for
profit and not-for-profit Third Parties, provided that (A)
********************************************. Regeneron may receive contract
fees, milestones, and royalties based on future sales of Antibodies discovered
by such Third Party licensees. In addition, under the terms of such license
agreements where Regeneron retains a license to develop and commercialize MTCs
discovered by such Third Parties, ******************************************
such decision shall not be subject to Section 3.3 and shall not be unreasonably
delayed. In the event that Sanofi’s representatives on the JRC reject any such
MTC from inclusion in the Discovery Program, Regeneron shall have the right to
develop and commercialize such MTC without restrictions under this Agreement
outside the Discovery Program and this Agreement. If Sanofi’s representatives on
the JRC agree to include these MTCs in the Discovery Program,
**********************.

     

                   (vii) **********************. Subject to the terms of Section 4.5, the Parties
may develop and commercialize the following Antibodies outside of the Discovery
Program and without restriction under this Agreement (subject to the royalty
obligations set forth in Section 4.5): *******************.

     

                   (viii) ************. Nothing in Section 2.8(a) shall limit or restrict either
Party or its Affiliate from developing and commercializing
******************************. However, in the case of Regeneron, during the
period referred to in the second sentence of Section 2.8(a)(i), the Target
****************************** must be an Excluded Target.

     

    19 

     

    

    
    


              2.9 Tail Period. At Sanofi’s sole option, upon prior written
notice to Regeneron, such notice to be delivered no later than June 30, 2017
(the “Tail Period
Notice Date”), the term of the Discovery Program may be
extended for up to three (3) additional years (as designated by Sanofi in its
notice) (the “Tail Period”). If Sanofi fails to provide such written
notice by the applicable Tail
Period Notice Date, the Discovery Program shall expire on December 31, 2017. Sanofi shall identify in
its written notice the specific Program Targets, Lead Candidates, and Product
Candidates to be included in the Discovery Program during the Tail Period. All
Program Targets not listed in this notice shall be considered Excluded Targets
as of January 1, 2018. Within ninety (90) days of receipt of Sanofi’s notice,
the Parties shall agree on a plan and budget (which shall be on a cost basis) to
perform the activities set forth below and as requested by Sanofi to be carried
out for each Contract Year of the Tail Period. In the event the Parties do not
agree on the commercial reasonableness of such budget, then such dispute shall
be referred to binding arbitration pursuant to the provisions of Article 13. During the Tail Period, Regeneron will use
Commercially Reasonable Efforts **************************.

     

              2.10 Research Licenses; Licenses
Generally. Each Party
hereby grants to the other Party and its Affiliates a non-exclusive,
non-transferable, worldwide, royalty-free, research license, without the right
to sublicense, under the Regeneron Intellectual Property and the Sanofi
Intellectual Property, respectively, solely to perform the Discovery Program.
For the avoidance of doubt, neither Party shall use the licenses granted in this
Section 2.10 for the benefit, directly or indirectly, of
any Third Party. Except as expressly provided for herein, nothing in this
Agreement grants either Party any right, title or interest in and to the
intellectual property rights of the other Party (either expressly or by
implication or estoppel). Except as expressly provided for in this Section 2.10 or elsewhere in this Agreement, neither Party
will be deemed by this Agreement to have been granted any license or other
rights to the other Party’s Patent Rights or Know-How, either expressly or by
implication, estoppel or otherwise. Upon expiration or earlier termination of
the Discovery Program, the licenses granted in Section 2.10 herein shall automatically terminate.


     

              2.11 Immunoconjugates.

     

                   (a) General. The JRC shall discuss and agree whether to include in the
Discovery Program the development of Immunoconjugates against specific Program
Targets and the type of Immunoconjugate technology to use therefore. Both
Parties’ representatives on the JRC must agree to develop Immunoconjugates in
the Discovery Program, including the type of Immunoconjugate technology to be
used in the Discovery Program, and any disagreements related to such decisions
shall be referred to the Parties’ Executive Officers with neither Party’s
Executive Officer having the deciding vote. In the event the Executive Officers
do not resolve such disagreements, then the issue shall not
***********************. 

     

    20 

     

    

    
    


                   (b) Sole Development. If either Party presents a proposal to the JRC to
include in the Discovery Program the development of an Immunoconjugate and it is
not included in the Discovery Program pursuant to Section 2.11(a), then either
Party may, at its option and at its sole expense, conduct such development
outside the scope of the Discovery Program (the “Solely Developed
Immunoconjugate”). The sole-developing Party shall propose to the JRC the Solely
Developed Immunoconjugate for inclusion in the Discovery Program when the Solely
Developed Immunoconjugate has completed IND Preparation (unless the naked
Antibody directed against the same Target as the Solely Developed
Immunoconjugate is an IFM), and shall do so by submitting to the JRC a copy of
the IND filing following the IND filing date. The JRC shall decide whether or
not to include the Solely Developed Immunoconjugate into the Discovery Program
(outside of the customary Opt-In Rights exercise under Section 5.4 below)
with the non-developing Party’s
representatives on the JRC having the final decision making authority solely
with respect to such decision and the following shall apply: 

     

                        (1) Inclusion in the Discovery Program. If the JRC decides to include the
Solely Developed Immunoconjugate into the Discovery Program, then the Solely
Developed Immunoconjugate shall be considered a Product Candidate and become a
Licensed Product under the License and Collaboration Agreement. In such case,
*************************. For clarification, the royalty as described in
Section 2.11(d)(i), to be negotiated in good faith by the Parties, shall apply
if the sole-developing Party’s Patent Rights and Know How are practiced or used
with respect to the Solely Developed Immunoconjugate as described
herein.

     

                        (2) Continue Sole Development. If at the time when such Solely Developed
Immunoconjugate has completed its IND Preparation the License and Collaboration
Agreement is not in effect, or if the JRC decides not to include the Solely
Developed Immunoconjugate into the Discovery Program, then the sole-developing
Party shall have the right to continue development and to commercialize such
Solely Developed Immunoconjugate on its own and at its sole expense, or with a
Third Party, outside the Discovery Program without restrictions under this
Agreement.

     

                        (3) Non-Exclusive License. With respect to any Solely Developed
Immunoconjugate that may be developed solely by either Party under this Section
2.11(b), each Party hereby grants to the other Party a non-transferable,
non-exclusive, worldwide, royalty-bearing (in accordance with Section 4.4
herein) license, with the right to sublicense, and ***************************.


     

                   (c) Failed MTCs. The Parties may independently develop Immunoconjugates using Failed MTCs. For the
purposes of this Section 2.11, “Failed MTC” shall mean (i) any MTC against a
Program Target that does not progress to IND Preparation in its naked Antibody
form or (ii) any Lead Candidate, in its naked Antibody form, for which an IND is
not filed, in each case (A) due to lack of evidence of biological activity and
(B) only if both Parties agree that the Program Target or Lead Candidate, as
applicable, will not be the subject of any further activities under the
Discovery Program, such agreement not to be unreasonably withheld or delayed.


     

    With respect to any
Failed MTC each Party hereby grants to the other a non-transferable,
non-exclusive, worldwide, royalty-bearing (in accordance with Section 4.4
herein) license, with the right to sublicense, and with respect to Regeneron
Target IP and Sanofi Target IP (as the case may be) solely to make, have made,
use, sell, offer to sell and import IFMs. For the avoidance of doubt, such a
license shall not include rights to any underlying Immunoconjugate technology
owned by the licensing Party. 

     

    21 

     

    

    
    


                   (d) Royalties.

     

                   (i) Discovery Program MTC’s. If the JRC agrees to include the development of
Immunoconjugates in the Discovery Program against a specific Program Target and
a Party’s Patent Rights and Know-How are practiced or used in the development of
such Immunoconjugates, then such Party shall be entitled to receive a royalty on
Net Sales of such ******************.

     

                   (ii) Failed MTCs. In the event that a Party or its Affiliate develops
Immunoconjugates using Failed MTCs (“IFMs”) outside the Discovery Program and
this Agreement, then such Party shall be required to pay to the other Party,
within sixty (60) days following the end of each calendar quarter, royalty
payments for such IFMs in accordance with Section 4.5.

     

              2.12 Sanofi Target Licenses. With respect to any Product Candidate
against a Sanofi Target that becomes a Refused Candidate (“Licensed Refused Sanofi
Candidate”) or any Sanofi
Divested Antibody or Sanofi Regulatory Divested Antibody, Sanofi hereby grants
to Regeneron a non-transferable, non-exclusive, worldwide, royalty-bearing (in
accordance with Section 4.4 herein) license, with the right to
sublicense, under the Sanofi Target IP solely to make, have made, use, sell,
offer to sell and import such Licensed Refused Sanofi Candidate, Sanofi Divested
Antibody, or Sanofi Regulatory Divested Antibody, as the case may be. Where such
Licensed Refused Sanofi Candidate is an Immunoconjugate, ********************.


     

              2.13 Non-Exclusive License to
Sanofi. Regeneron hereby
grants Sanofi and its Affiliates a perpetual, worldwide, non-exclusive,
non-transferable, royalty-free license, without the right to sublicense, under
Regeneron Intellectual Property discovered directly in connection with the
performance of the Discovery Program claiming Targets on the Target List and/or
methods of use related to the inhibition or use of such Targets for use by
Sanofi and its Affiliates in connection with the manufacture, use, sale, offer
to sell, and import of small molecule drug and diagnostic products.


     

              2.14 Invention Assignment. All of the employees, officers and
consultants of each Party that are supporting the performance of its obligations
under this Agreement shall have executed agreements or have existing obligations
under law requiring, in the case of employees and officers, assignment to such
Party of all inventions made during the course of and as the result of their
association with such Party and, in the case of employees, officers and
consultants, obligating the individual to maintain as confidential such Party’s
Confidential Information which such Party may receive, to the extent required to
support such Party’s obligations under this Agreement. 

     

              2.15 Supply of VelociGene® Mice. On August 4, 2008, Regeneron and
sanofi-aventis U.S. Inc. entered into a Mouse Purchase Agreement pursuant to
which Regeneron is using its proprietary technology for the production of
genetically modified mouse embryonic stem cell lines and mice derived from the
corresponding mouse stem cell lines. 

     

              2.16 Option for VelocImmune®
License. At Sanofi’s
request within sixty (60) days of the Discovery Expiration Date, the Parties
shall enter into a License and Material Transfer Agreement (the “License and MTA”) under which Regeneron will license
VelocImmune to Sanofi.
*************************************. As used in this Section 2.16, VelocImmune shall mean Regeneron’s Mice
technology as previously licensed by Regeneron to Third Parties as of the
Effective Date. The License and MTA shall contain such other customary terms and
conditions consistent with those included in Regeneron’s VelocImmune license
agreements existing as of the Effective Date. 

     

    22 

     

    

    
    


              2.17 Option for Additional
Technologies. To the
extent that Regeneron decides to license either
************************************* (any such technologies and Know How being
licensed by Regeneron, being referred to as the “Additional Technologies) to commercial entities, then at Sanofi’s
request, during the one hundred eighty (180) day period following the expiration
or earlier termination of the Discovery Program, the Parties shall enter into a
definitive agreement under which Regeneron will license the applicable
Additional Technologies to Sanofi. The definitive agreement(s) for the
Additional Technologies to be licensed to Sanofi shall contain commercial and
other terms and conditions that are not materially less favorable, when taken as
a whole, than those included in any then-existing license agreements with Third
Parties for such Additional Technologies, if any. 

     

              2.18 Third Party Platform
Licenses. The Parties
acknowledge that, during the Term, the Parties may mutually agree
**********************************. In such an event, including mutual agreement
of the Parties, the following provisions shall apply: 

     

                   (a) License by Regeneron. Regeneron shall use Commercially Reasonable Efforts
to obtain and maintain any Third Party licenses ***************, including
research necessary for ***************************. 

     

                   (b) License by Sanofi. In the event that ***************** pursuant to
subsection (a) above or the Parties decide that *********************, Sanofi
shall use Commercially Reasonable Efforts to obtain and maintain such Third
Party licenses.

     

                   (c) Payment. If, as a result of either Party obtaining and maintaining such Third Party
licenses *************************** Party and shall not be ************** or
included in the *********************.

     

    ARTICLE 3 

     

    JOINT RESEARCH
COMMITTEE 

     

              3.1 The Joint Research
Committee. 

     

                   (a) Formation, Composition and
Membership. The Parties
have established the JRC, which shall consist of at least three (3) senior
representatives appointed by each of Regeneron and Sanofi. Each Party may
replace its Committee members upon written notice to the other Party;
provided that such replacement is of comparable
standing and authority within that Party’s organization as the person he or she
is replacing (or is otherwise reasonably acceptable to the other Party). The JRC
will have two (2) co-chairpersons, one designated by each of Regeneron and
Sanofi.

     

    23

     

    

    
    


                   (b) Meetings of the JRC. The JRC shall meet at least once every
calendar quarter, unless the JRC co-chairpersons otherwise agree. All JRC
meetings may be conducted by telephone, video-conference or in person as
determined by the JRC co-chairpersons; provided, however, that the JRC shall meet in person at least
once each calendar year, unless the Parties mutually agree to meet by
alternative means. Unless otherwise agreed by the Parties, all in-person
meetings for JRC shall be held on an alternating basis between Regeneron’s
facilities and Sanofi’s facilities. Further, each co-chairperson shall be
entitled to call meetings in addition to the regularly scheduled quarterly
meetings. The co-chairpersons, with the assistance of the Alliance Managers,
shall coordinate activities to prepare and circulate an agenda in advance of
each meeting and prepare and issue draft minutes of each meeting within fourteen
(14) days thereafter and final minutes within thirty (30) days thereafter, such
final minutes to include the updated Target List. With the consent of the
Parties (not to be unreasonably withheld or delayed), a reasonable number of
other representatives of a Party may attend any JRC meeting as non-voting
observers (provided that such additional representatives are
under obligations of confidentiality and non-use applicable to the Confidential
Information of the other Party that are at least as stringent as those set forth
in Article 9 below). Each Party shall be responsible for
all of its own personnel and travel costs and expenses relating to participation
in JRC meetings.

     

                   (c) Duties. The JRC shall:

     

    
                     (i) discuss the objectives of the Discovery Program;

       

                     (ii) review and comment on the Target Discovery Plan and the Antibody
Discovery Plan;

       

                     (iii) exchange and review scientific information and data relating to the
Target List and activities being conducted under, and the then-current progress
of, the Target Discovery Plan and the Antibody Discovery Plan, and establish
processes for the exchange of information relating to the progress of the
activities under the Target Discovery Plan and the Antibody Discovery Plan
(subject to the limitations concerning the identification of Targets in the
Target Discovery Plan as set forth in Section 2.3(a)); 

       

                     (iv) discuss experiments believed by a Party’s representatives on the JRC to
be necessary to properly evaluate Program Targets, Lead Candidates and Product
Candidates; 

       

                     (v) provide assistance and recommendations on the direction of the Target
Discovery Plan and the Antibody Discovery Plan; 

       

                     (vi) evaluate and prioritize Program Targets;

       

                     (vii) discuss the use of ****** with regard to Program Targets; 

       

                     (viii) discuss whether an Antibody, including any MTC, satisfies the criteria of
Lead Candidates attached in Schedule 4; 

       

                     (ix) review and prioritize Lead Candidates;

    

     

    24

     

    

    
    


    
                     (x) maintain the Rolling
Target List, Immunized Target List, and the list of Excluded Targets as provided
in this Agreement; 

       

                     (xi) conduct the Special JRC Meeting and Annual Draft Meetings; 

       

                     (xii) consider and act upon such other matters as specified in this Agreement
or as otherwise agreed to by the Parties, including, without limitation, any
requests for Sanofi to perform activities under the Discovery Program costs for
which to be treated as Discovery Program Costs in accordance with the last
paragraph of Section 4.2; 

       

                     (xiii) make any such decisions as are expressly allocated to the JRC under this
Agreement; and

    

     

    At the request of either Party’s
representatives to the JRC, conduct ad hoc meetings in addition to the quarterly
meetings of the JRC as reasonably necessary to coordinate and expedite all
decisions made by the JRC.

     

                   (d) Decision Making. The JRC shall operate by consensus. The
representatives of each Party shall have collectively one (1) vote on behalf of
such Party; provided that no such vote taken at a meeting shall be
valid unless a representative of each Party is present and participating in the
vote. Notwithstanding the foregoing, each Party, in its sole discretion, by
written notice to the other Party, may choose not to have representatives on the
JRC and leave decisions of the JRC to representatives of the other
Party.

     

              3.2 Alliance Management. Each of Sanofi and Regeneron shall appoint a
senior representative who possesses a general understanding of research,
clinical, and regulatory issues to act as its Alliance Manager (“Alliance Manager”). Each Alliance Manager shall be charged
with creating and maintaining a collaborative work environment between the
Parties. Each Alliance Manager will also be responsible for providing
single-point communication for seeking consensus both internally within the
respective Party’s organization and with the other Party’s organization,
including facilitating review of external corporate communications.

     

              3.3 Resolution of Governance
Matters. 

     

                   (a) Generally. The Parties shall cause their respective
representatives on the JRC to use their Commercially Reasonable Efforts to
resolve all matters presented to them as expeditiously as possible.

     

                   (b) Executive Officers’ Resolution of
Disputes. In the event
that the JRC is, after a period of thirty (30) days from the date a matter is
submitted to it for decision, unable to make a decision due to a lack of
required unanimity, or the Parties are unable to agree on the budget for the
Initial Development Plan for a Product Candidate in accordance with Section 5.3 below, either Party may require that the
matter be submitted to the Executive Officers for a joint decision. In such
event, the co-chairpersons of the JRC, by written notice to each Party delivered
within five (5) days after receipt of the notice from a Party pursuant to the
immediately preceding sentence, shall formally request that the dispute be
resolved by the Executive Officers, specifying the nature of the dispute with
sufficient specificity to permit adequate consideration by such Executive
Officers. The Executive Officers shall diligently and in good faith, attempt to
resolve the referred dispute within thirty (30) days of receiving such written
notification or such longer period of time as the Executive Officers may agree
in writing. Regeneron’s Executive Officer shall have the deciding vote over all
matters referred to the Executive Officers by the JRC, other than (i) matters
related to the commercial reasonableness of the budget for the Initial
Development Plan for a Product Candidate which shall be resolved in accordance
with Section 13.1 below should the Executive Officers fail to
resolve such matter, (ii) decisions concerning whether Sanofi shall perform any
activities under the Discovery Program, which shall require a joint decision of
both Parties’ Executive Officers, (iii) any decision of the Executive Officers
pursuant to Section 2.4(d), and (iv) any decision of the Executive
Officers pursuant to Section 4.4. 

     

    25

     

    

    
    


              3.4 Obligations of the Parties and their
Affiliates. The Parties
shall cause their respective designees on the JRC and their respective Executive
Officers to take the actions and make the decisions provided herein to be taken
and made by such respective designees and Executive Officers in the manner and
within the applicable time periods provided herein. 

     

    ARTICLE 4 

     

    PAYMENTS 

     

              4.1 Upfront Payment; Reimbursement Payments for
Manufacturing Expansion.
Within five (5) Business Days of the Original Agreement Effective Date, Sanofi
paid to Regeneron a non-refundable, non-creditable amount of US $85,000,000 as
consideration for access to Regeneron’s research capabilities and suite of
discovery technologies and the co-exclusive (with Regeneron) rights granted to
Sanofi hereunder during the Term. Regeneron plans to expand its facilities in
Rensselaer, New York (the “Expansion
Plans”) to help provide an adequate and timely supply of Formulated Bulk
Product for Clinical Supply Requirements (as those terms are defined in the
License Agreement) of Licensed Products. The Parties have agreed on the general
description, plan and budget of the Expansion Plans as set forth in Schedule 7.
Sanofi shall reimburse Regeneron for up to US$30,000,000 of costs incurred by
Regeneron to implement the Expansion Plans (the “Maximum Reimbursable Amount”). Within forty-five (45) days following the
end of each calendar quarter, until Regeneron has been reimbursed for the
Maximum Reimbursable Amount under this Section 4.1, Regeneron shall provide to Sanofi a detailed
report of the costs incurred by it in such calendar quarter to implement the
Expansion Plans, together with an invoice therefor. Sanofi shall reimburse
Regeneron for all costs set forth in such report and invoice within thirty (30)
days after its receipt thereof. Regeneron shall not be entitled to include
depreciation for equipment and other items included in the Expansion Plan as
Development Costs (as defined in the License Agreement) under the License
Agreement to the extent Sanofi has reimbursed Regeneron for such equipment and
other items pursuant to this Section 4.1, and shall provide evidence of the same.
Regeneron may only use the production suites identified in Schedule 7 to
manufacture products other than Licensed Products if the production of such
other products does not interfere with the production of Formulated Bulk Product
for Clinical Supply Requirements (as those terms are defined in the License
Agreement) of Licensed Products.

     

    26

     

    

    
    


              4.2 Discovery Program Costs. Commencing on the Original Agreement
Effective Date and continuing during the term of the Discovery Program, Sanofi
shall be responsible for paying one hundred percent (100%) of all Discovery
Program Costs, including Discovery Program Costs incurred for a Product
Candidate until the anticipated IND filing date for such Product Candidate,
regardless of whether Sanofi exercises its Opt-In Rights in accordance with
Section 5.1; provided that, except as set forth below and in
Section 4.10, the total annual Discovery Program Costs to
be paid by Sanofi in each of the first ten (10) years of the Discovery Program
(the “Maximum Annual Discovery Program
Costs”) shall not exceed
the following amounts (as calculated for each Contract Year): 

     

    
      	Contract Year	       	Maximum Annual Discovery Program Costs
	1 (ending December 31, 2008)	
            	US $75,000,000
	2 	
            	US $100,000,000
	3 	
            	US $160,000,000
	4 	
            	US $160,000,000
	5 	
            	US $160,000,000
	6 	
            	US $160,000,000
	7 	
            	US $160,000,000
	8 	
            	US $160,000,000
	9 	
            	US $160,000,000
	10 (ending December 31, 2017	
            	US
$160,000,000


    


    In the event that the
Discovery Program Costs incurred in any Contract Year are less than the Maximum
Annual Discovery Program Costs for such Contract Year, the amount of such
shortfall up to ten percent (10%) of the Maximum Annual Discovery Program Costs
stated immediately above for each Contract Year may be carried over to the
ensuing Contract Year and added to the Maximum Annual Discovery Program Costs
for such ensuing Contract Year except for any such shortfall at the end of
Contract Year 10, such that Regeneron’s right to carry over any shortfall shall
not be applicable into or during the Tail Period. At least sixty (60) days prior
to the end of each Contract Year, Regeneron shall notify Sanofi if it reasonably
believes that the total Discovery Program Costs for such Contract Year will be
less than the Maximum Annual Discovery Program Costs for such Contract Year and
whether Regeneron intends to apply such shortfall amount to the Discovery
Program Costs for the ensuing Contract Year.

     

    To the extent that
Sanofi performs any activities under the Discovery Program, it shall do so at
its sole cost and expense and such costs and expenses shall not be treated as
Discovery Program Costs for purposes of calculating the Maximum Annual Discovery
Program Costs unless the JRC expressly requests Sanofi to perform any such
activities, in which case the mutually agreed upon costs directly related to
such activities shall be included in the calculation of the Maximum Annual
Discovery Program Costs. The Parties acknowledge that payments made by Sanofi
pursuant to this Section 4.2 are being made as research and development
expenses, as defined in the U.S. Internal Revenue Code Section 41, and agree
that any and all credits or deductions to which either party may be entitled on
account of research performed pursuant to such payments shall be allocated to
Sanofi to the extent of such payments.

     

              4.3 Reports and Discovery Program Cost
Payments. Within
forty-five (45) days following the end of each calendar quarter, Regeneron shall
deliver electronically to Sanofi a written report setting forth in reasonable
detail the Discovery Program Costs incurred by Regeneron in such calendar
quarter along with an invoice therefore. Sanofi shall reimburse Regeneron for
all undisputed Discovery Program Costs set forth in each report within thirty
(30) days after its receipt thereof. Any disputed, unpaid Discovery Program
Costs that are determined to be due and payable to Regeneron under this
Agreement shall be paid with the Default Interest Rate.

     

    27

     

    

    
    


              4.4 **************** Opt-in
Payment. (a) In the event
that Sanofi exercises its Opt-In Rights in accordance with Section 5.1 with regard *********************** then
Sanofi shall, on an Opt-In Notice by Opt-In Notice basis, make a US $10,000,000
payment to Regeneron with the applicable Opt-In Notice or, in the case of a
dispute under this Section 4.4(a), upon the resolution of the dispute
hereunder. Regeneron shall indicate in the Opt-In Report
**********************************. Sanofi shall indicate in the Opt-In Notice
for such a Product Candidate whether it, in good faith, agrees or disagrees with
Regeneron, including any supporting information supporting its belief. In the
event of a disagreement between the Parties as to ***************************,
the matter shall be referred to the Executive Officers for a joint decision in
accordance with Section 3.3. In the event the Executive Officers are
unable to reach agreement with respect to the matter in accordance with
Section 3.3, then the dispute shall be referred to an
independent Third Party expert (the “Expert”). The Parties shall alternate having the
right to select an Expert to resolve disputes in accordance with this
Section 4.4, with Sanofi selecting the Expert for the
first such dispute and neither Party selecting an Expert that was used
previously by either Party without the written consent of the other Party. Each
Expert shall be selected by the applicable Party within thirty (30) days of the
end of the thirty (30) day period referred to in Section 3.3. Each Expert must be a person selected in
good faith who is knowledgeable in the field of Antibodies, possessing senior
executive experience in the biotechnology or pharmaceutical industry, and has no
known prior, current, or planned future association (by contract, employment, or
otherwise) with the selecting Party, any of its Affiliates, or any officer,
director, or employee of such Party or any of its Affiliates. The Parties will
both enter into a consulting agreement with each Expert and will share equally
in all fees charged by each Expert. Each Expert shall be instructed in the
consulting agreement to make his decision as to
*********************************** within two (2) weeks of his selection. The
Expert’s decision shall be final and binding upon the Parties. For the avoidance
of doubt, any dispute under this Section 4.4(a) shall not delay the development of the
applicable Licensed Product. 

     

                   (b) A Product Candidate
offers **************if it is expected to ***************** based on one or more
of the following actual or expected characteristics of a Product Candidate
generated using ************* compared to **********************. If, by way of
example, there is a Third Party Conventional Antibody in clinical development
against the applicable Program Target, then************************. The
existence ******************* shall be determined based on information available
at the time of such determination pursuant to this Section 4.4. If no Existing
Technology MTCs have been generated as of the date of the applicable Opt-In
Report, the determination of ********************** shall be based on
****************************.

     

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              4.5 Royalty Payments for Royalty
Products. If either Party,
or its Affiliate or licensee successfully develops and commercializes a Royalty
Product, then the commercializing Party shall pay to the non-commercializing
Party, within sixty (60) days following the end of each calendar quarter, the
following royalties on the aggregate Net Sales of such, respective Royalty
Products during the Royalty Term: 

     

    
                     (i) Refused Candidates.
Royalty payments for Refused Candidates, including a Competing Refused
Candidate, of ********* provided that no such royalty amount shall be due for
Antibodies ****************.

       

                     (ii) Licensed Refused Sanofi
Candidate. In addition to the ****************** described in subsection (i)
immediately above, a royalty payment of ************* shall apply for a Licensed
Refused Sanofi Candidate in such countries where, and for so long as,
****************** (plus any additional royalty referred to in Section
2.11(d)(i), if applicable, for a Licensed Refused Sanofi Candidate that is an
Immunoconjugate using Sanofi’s Immunoconjugate technology, for so long as it
incorporates such technology).

       

                     (iii) Sanofi Divested Antibody.
Royalty payments for a Sanofi Divested Antibody of *************** provided that
no such royalty amount shall be due for Antibodies
*********************.

       

                     (iv) Sanofi Regulatory
Divested Antibody. Royalty payments for a Sanofi Regulatory Divested Antibody of
*********** in such countries where, and for so long as, its manufacture, use or
sale is covered by a Valid Claim in any Sanofi Target IP as determined on a
country-by-country-basis. 

       

                     (v) IFMs/Failed MTCs. Royalty
payments for IFMs of **** as
described in Section 2.11(d)(ii) of this Agreement. 

       

                     (vi) Solely Developed
Immunoconjugates. Royalty payments for Solely Developed Immunoconjugates of ****
as described in Section 2.11(b). 

       

                     (vii) Antibodies Pursuant to
Section 12.11(b). Royalty payments for Antibodies referred to and described in
Section 12.11(b) of ************ in such countries where, and for so long as,
its manufacture, use or sale is covered by a Valid Claim in any Sanofi Target IP
as determined on a country-by-country basis.

    

     

    In the event that any Royalty
Product requires a sub-license to Sanofi Patent Rights or Regeneron Patent
Rights, as applicable, and such sub-license is granted under this Agreement,
then any financial remuneration that the licensing Party is required to pay to a
Third Party for its license from the Third Party shall be considered a
pass-through cost to be borne by the Party developing and/or commercializing the
Royalty Product.

     

    29

     

    

    
    


              4.6 Royalty Term and Reporting. The royalties payable under Sections 4.5 (i), 4.5(iii), and 4.5(v) of this Agreement shall each be paid for the
period of time, as determined on a Royalty Product-by-Royalty Product and
country-by-country basis, commencing on the Effective Date and ending on the
later to occur of (a) ***********************, (b) the expiration of the last to
expire Valid Claim of the Licensed Sanofi Target IP or Regeneron Target IP, as
the case may be. The royalties payable under Sections 4.5 (ii), 4.5 (iv), 4.5(vi), and 4.5(vii) of this Agreement shall each be paid on a
Royalty Product-by-Royalty Product and country-by-country basis, commencing on
the Effective Date and ending on the expiration of the last to expire Valid
Claim of the licensed Sanofi Target IP (the applicable period of time during
which royalties are payable pursuant to this sentence and the preceding sentence
being referred to as the applicable “Royalty Term”). During the applicable Royalty Term, the
Party owing royalties shall deliver to the other Party with each royalty payment
a report detailing in reasonable detail the information necessary to calculate
the royalty payments due under this Agreement for such calendar quarter,
including the following information, specified on a Royalty Product-by-Royalty
Product and country-by-country basis: (a) total gross invoiced amount from sales
of each Royalty Product by a Party, its Affiliates and sublicensees; (b) all
relevant deductions from gross invoiced amounts to calculate Net Sales; (c) Net
Sales; and (d) royalties payable.

     

              4.7 Payment Method and Currency. All payments under this Agreement shall be
made by bank wire transfer in immediately available funds to an account
designated by the Party to which such payments are due. All sums due under this
Agreement shall be payable in United States Dollars. In those cases where the
amount due in United States Dollars is calculated based upon one or more
currencies other than United States Dollars, such amounts shall be converted to
United States Dollars using the average of the buying and selling exchange rate
for conversion of the applicable foreign currency into United States Dollars,
using the spot rates (the “Closing Mid-Point Rates” found in the “Dollar spot
forward against the Dollar” table published by The Financial Times, or any other publication as agreed to by the Parties) from the last
Business Day of the preceding month.

     

              4.8 Late Payments. All late payments made under this Agreement
(including payments made pursuant to Sections 4.4 and 4.5 above), shall earn interest, to the extent
permitted by applicable Law, from the date due until paid at a rate equal to the
thirty (30) day London Inter-Bank Offering Rate (LIBOR) U.S. Dollars, as quoted
in The Wall Street Journal (U.S., Eastern Edition) effective for the
date on which the payment was due, ***** (such sum being referred to as the “Default Interest Rate”). 

     

              4.9 Taxes. Except as set forth in Section 4.1, any withholding or other taxes that a Party
is required by Law to withhold or pay on behalf of the other Party, with respect
to any payments to such other Party hereunder, shall be deducted from such
payments and paid to the appropriate tax authority contemporaneously with the
remittance to such other Party; provided, however, that the remitting Party shall furnish the
other Party with proper evidence, including any self-reporting documentation, of
the taxes so paid. Each Party shall cooperate with the other and furnish the
other Party with appropriate documents to secure application of the most
favorable rate of withholding tax under applicable Law (or exemption from such
withholding tax payments, as applicable).

     

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              4.10 Special Adjustment. If during the period beginning January 1,
2012 and ending on December 31, 2013, both *************************** then, at
Sanofi’s option, which must be exercised by written notice to Regeneron no later
than *************, the Maximum Annual Discovery Program Costs set forth in
Section 4.1 shall be reduced to US$120,000,000 for each
of Contract Years 7, 8, 9, and 10 (the “Special Adjustment”). Notwithstanding
the foregoing, ****************************** against which Lead Candidates have
been developed under the Discovery Program prior to such exclusion, and Regeneron files
IND(s) for Excluded Candidate(s) against such Excluded Target(s), then each such
IND filing shall be considered the submission of a Sanofi Opt-In Report for a
Product Candidate solely for purposes of determining whether
*************************. If Sanofi exercises its option for the Special
Adjustment following the occurrence of the conditions set forth above, then
Regeneron shall have the right (the “Catch Up Right”), in its sole discretion, to fund up to
US$40,000,000 of Discovery Program Costs on its own for each of the remaining
Contract Years through the Discovery Expiration Date (the actual aggregate
amount of such Discovery Program Costs funded by Regeneron on its own during
Contract Years 7, 8, 9, and 10 being referred to as the “Catch-Up Amount”). Regeneron shall have sixty (60) days from
the date of the Special Adjustment to exercise the Catch Up Right and shall
notify Sanofi promptly in writing of such exercise. Regeneron shall provide
Sanofi within sixty (60) days of the beginning of each subsequent Contract Year
with a written report setting forth in reasonable detail the calculation of the
Catch-Up Amount. If Regeneron exercises this Catch Up Right,
then********************************* then Sanofi shall be required to make a
payment to Regeneron equal to the Catch-Up Amount within forty-five (45) days
after receipt of a written report setting forth in reasonable detail the
calculation of the Catch-Up Amount. Effective upon the occurrence of the Special
Adjustment, unless Regeneron exercises the Catch Up Right, the annual
Collaboration Objectives shall be adjusted as follows: ***********************.


     

    ARTICLE 5

     

    OPT-IN RIGHTS TO LICENSE PRODUCT
CANDIDATES

     

              5.1 Opt-In Rights to License Product
Candidates. Subject to the
penultimate sentence of this Section 5.1 and the other terms of this Agreement, Sanofi
shall have the exclusive right during the term of the Discovery Program to elect
to jointly (with Regeneron) develop and commercialize each Product Candidate as
set forth below, under the terms and conditions set forth in the License and
Collaboration Agreement (the “Opt-In
Rights”). While the Opt-In Rights are in effect with respect to an
Antibody from the Discovery Program, including a MTC in the Discovery Program,
Regeneron will not grant to any Third Party rights to any such Antibody. The
Opt-In Rights will expire and Sanofi will no longer have any rights or licenses
to any Antibodies, including MTCs, under this Agreement upon the expiration or
earlier termination of the Discovery Program. After the first ten (10) years of
the Discovery Program, the Opt-In Rights shall remain in effect during the Tail
Period solely with respect to Lead Candidates and other Antibodies and MTCs
against any applicable Program Targets properly identified by Sanofi in its
notice to extend the Discovery Program through the Tail Period provided under
Section 2.9. For the avoidance of doubt, Sanofi shall
have no Opt-In Rights to Excluded Candidates owned or licensed by Regeneron or
its Affiliates. 

     

              5.2 Process for Opt-In Rights. At least *********** prior to the
anticipated filing date for the IND for a Product Candidate, Regeneron will
provide Sanofi with a report containing
*****************************************, as well as the anticipated date of
the filing of the applicable IND (the “Opt-In Report”). Following Sanofi’s
receipt of the Opt-In Report, Regeneron shall also provide Sanofi with updated
information, when available, that is required for or intended to be included in
the IND for such Product Candidate and any other information regarding the
Product Candidate Sanofi reasonably requests, which is reasonably available to
Regeneron. Regeneron shall provide a draft of the IND containing all material
information to be included in such draft IND at least one (1) month prior to the
anticipated filing date for such IND, it being understood that this draft IND
shall not be required to include
***********************************.

     

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              5.3 Initial Development Plan. Within thirty (30) days after Sanofi’s
receipt of the Opt-In Report, the Parties shall jointly commence, and thereafter
as promptly as practicable complete, preparation of a plan and budget for the
planned development activities for such Product Candidate through the completion
of the Phase I Clinical Trial (the “Initial Development Plan”), the final budget included in which shall
be subject to Sanofi’s written approval, not to be unreasonably withheld or
delayed; provided, however, that (i) the Parties shall not be required
to continue or complete such preparation if the Opt-In Period for such Product
Candidate has expired without Sanofi having timely exercised its Opt-In Rights
with respect thereto or Sanofi shall have otherwise advised Regeneron in writing
that it will not exercise its Opt-In Rights with respect to such Product
Candidate and (ii) if the Parties are unable to agree on a final budget the
matter shall first be referred to the Executive Officers in accordance with
Section 3.3(b) above, and if such Executive Officers are
unable to resolve such matter, it shall be submitted to binding arbitration to
be conducted in accordance with Section 13.1 below. If Sanofi properly exercises its
Opt-In Rights with respect to a Product Candidate, such Product Candidate shall
be developed in accordance with the Initial Development Plan until the Parties
agree to the “Global Development Plan” as such term is defined in the License and
Collaboration Agreement. 

     

              5.4 Opt-In Exercise. Sanofi may exercise its Opt-In Rights under
this Agreement and license a Product Candidate under the License and
Collaboration Agreement by delivering to Regeneron a written notice of exercise
in the form annexed hereto as Exhibit A (an “Opt-In Notice”) on or before ***************************
and (ii) ************* before the revised anticipated filing date of such IND
notified by Regeneron, if any, (“the “Opt-In Period”), unless Regeneron has not
submitted to Sanofi the draft of the IND in accordance with Section 5.2 above,
in which case Sanofi ************************* to exercise the Opt-In Rights..
Upon the timely exercise of the Opt-In Rights by Sanofi, the applicable Product
Candidate shall become a Licensed Product. Unless otherwise agreed by the
Parties, Regeneron shall exercise Commercially Reasonable Efforts to file the
IND **************************. 

     

              5.5 Dll4 and REGN 88. Sanofi exercised its Opt-In Rights to REGN
88 as of the Original Agreement Effective Date and was deemed to have exercised
its Opt-In Rights with respect to the MTC against Delta-like ligand 4 (Dll4) as
of the Original Agreement Effective Date.

     

              5.6 Refused Candidates. If Sanofi does not provide Regeneron with an
Opt-In Notice within the Opt-In Period with respect to a particular Product
Candidate, or Sanofi notifies Regeneron that it will not exercise Opt-In Rights
with respect to the Product Candidate, then the following shall
apply:

     

    
                          (i) Refused Candidate. The Opt-In Rights shall expire with respect
to that Product Candidate (a “Refused Candidate”). All licenses granted in Section 2.10 shall automatically expire with respect to
each Product Candidate upon such Product Candidate becoming a Refused Candidate.
Following such time as a Product Candidate becomes a Refused Candidate, except
as set forth below, the applicable Target shall no longer be deemed a Program
Target and shall be removed from the Target List and Sanofi shall no longer have
any rights to any Antibodies, including MTCs, against such Target under this
Agreement. Sanofi shall have a one-time right within four (4) weeks of the date
a Product Candidate becomes a Refused Candidate to designate the Target for such
Refused Candidate as one of its Sanofi Targets, otherwise it shall be considered
an Excluded Target.

    

     

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                     (ii) Regeneron Rights. Regeneron may continue to develop and
commercialize (on its own or with one or more Third Parties) any Refused
Candidate without restriction outside the Discovery Program and this Agreement,
unless the Refused Candidate is a Competing Refused Candidate, in which case,
Section 2.8(b)(ii) shall apply. In addition, unless Sanofi has
exercised its right under Section 5.6(i) to designate the applicable Target for a
Refused Candidate as one of its Sanofi Targets, then Regeneron may continue to
develop and commercialize (on its own or with one or more Third Parties) any
MTCs or other Antibodies against such Target and may practice and use any
Regeneron Intellectual Property, including, without limitation, the Mice, in
connection with such activities. If Sanofi has designated the applicable Target
for the Refused Candidate as a Sanofi Target pursuant to Section 5.6(i), then all Antibodies (including MTCs) against
such Target that were generated under the Discovery Program other than the
Refused Candidate shall remain part of the Discovery Program. 

       

                     (iii) Sanofi Rights. Neither Sanofi nor its Affiliates, either
directly or through any Third Party, may develop or commercialize an Antibody
that is against the Target of a Refused Candidate ****************** following
such date that it becomes a Refused Candidate, provided that ****************
shall not apply to the following:
************************************.

    

     

    ARTICLE 6 

     

    NEWLY CREATED
INVENTIONS 

     

              6.1 Ownership of Newly Created Intellectual
Property. 

     

                   (a) Each Party shall
exclusively own all intellectual property (including, without limitation,
Know-How, Patents and Patent Applications and copyrights) discovered, invented,
authored or otherwise created solely by such Party, its employees, agents and
consultants under the Discovery Program (“Sole Inventions”). Sole Inventions made solely by Sanofi, its
employees, agents and consultants are referred to herein as “Sanofi Sole Inventions.” Sole Inventions made solely by Regeneron,
its employees, agents and consultants are referred to herein as “Regeneron Sole Inventions.” The Parties agree that nothing in this
Agreement, and no use by a Party of the other Party’s Intellectual Property
pursuant to this Agreement, shall vest in a Party any right, title or interest
in or to the other Party’s Intellectual Property, other than the license rights
expressly granted hereunder.

     

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                   (b) The Parties shall jointly
own all intellectual property (including, without limitation, Know-How, Patents
and Patent Applications and copyrights) discovered, invented, authored or
otherwise created under the Discovery Programs that is invented or authored
jointly by an individual or individuals having an obligation to assign such
intellectual property to Sanofi (or for which ownership vests in Sanofi by
operation of law), on the one hand, and an individual or individuals having an
obligation to assign such intellectual property to Regeneron (or for which
ownership vests in Regeneron by operation of law), on the other hand, on the
basis of each Party having an undivided interest in the whole (“Joint Inventions”). 

     

                   (c) Notwithstanding the
foregoing in Section 6.1(b), (i)
for purposes of determining whether a patentable invention is a Sanofi Sole
Invention, a Regeneron Sole Invention or a Joint Invention, questions of
inventorship shall be resolved in accordance with United States patent laws, as
determined, if necessary, by an independent third party, (ii) for purposes of
determining whether a copyrighted work is a Sanofi Sole Invention, a Regeneron
Sole Invention or a Joint Invention, questions of copyright authorship shall be
resolved in accordance with United States copyright laws, and (iii) for purposes
of determining whether Know-How (other than copyrighted work and Patent
Applications) is a Sanofi Sole Invention, a Regeneron Sole Invention or a Joint
Invention, questions of authorship or inventorship shall be resolved in
accordance with the laws of the State of New York, United States. 

     

                   (d) To the extent that any
right, title or interest in or to any intellectual property discovered,
invented, authored or otherwise created under this Agreement vests in a Party or
its Affiliate, by operation of Law or otherwise, in a manner contrary to the
agreed upon ownership as set forth in this Agreement, such Party (or its
Affiliate) shall, and hereby does, irrevocably assign to the other Party any and
all such right, title and interest in and to such intellectual property to the
other Party without the need for any further action by any Party. 

     

                   (e) The Parties hereby agree
that each Party’s use of the Joint Inventions shall be governed by the terms and
conditions of this Agreement including the following: each Party’s interest in
the Joint Inventions may be sublicensed to Third Parties, and any ownership
rights therein transferred, in whole or in part, by each Party without consent
of the other Party (unless otherwise prohibited by this Agreement or the License
and Collaboration Agreement); provided that (i) each of the Parties acknowledges
that it receives no rights to any Intellectual Property of the other Party
underlying or necessary for the use of any Joint Invention, except as otherwise
set forth herein or in the License and Collaboration Agreement, (ii) each Party
agrees not to transfer any of its ownership interest in any of the Joint
Inventions without securing the transferee’s written agreement to be bound by
the terms of this Section 6.1(e), (iii) during the Discovery Program, each
Party agrees not to license its interest in any Joint Invention with the right
to use such Joint Invention for developing, manufacturing or commercializing
antibodies (except for developing, manufacturing or commercializing a Party’s
Antibodies that may be included in the exclusions described in Section 2.8 (b) of the Agreement), and (iv) nothing in this
Article 6 shall relieve a Party or its Affiliates of
their obligations under Article 9 with respect to Confidential Information
provided by the other Party or such other Party’s Affiliates. Neither Party
hereto shall have the obligation to account to the other Party for any revenues
or profits obtained from any transfer of its interest in, or its use, sublicense
or other exploitation of, the Joint Inventions outside the scope of the
Discovery Program. Each of the Parties (or its Affiliate), as joint owner of the
Joint Inventions, agrees to cooperate with any enforcement actions brought by
the other joint owner(s) against any Third Parties, and further agrees not to
grant any licenses to any such Third Parties against which such enforcement
actions are brought during the time of such dispute, without the prior written
consent of the other joint owner(s), such consent not to be unreasonably
withheld. The provisions governing Joint Inventions set forth in this
Section 6.1(e) shall survive the expiration or termination
of this Agreement. 

     

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              6.2 Prosecution and Maintenance of Patent
Rights. 

     

                   (a) Subject to the terms of
the License and Collaboration Agreement with respect to Licensed Products,
Regeneron shall prepare, file, prosecute and maintain Patents and Patent
Applications (as applicable) included in the Regeneron Patent Rights and
Regeneron shall confer with and keep Sanofi reasonably informed regarding the
status of such activities to the extent they are Product Patent Rights. With
respect to the preparation, filing, prosecution and maintenance of those
inventions that are Product Patent Rights, ********************* except that all
provisionals, the priority application based thereon and the corresponding PCT
application ************************. Sanofi shall prepare, file, prosecute and
maintain Patents and Patent Applications (as applicable) included in the Sanofi
Patent Rights provided that ***************************** except that all
provisionals, the priority application based thereon and the corresponding PCT
application *******************************. 

     

                   (b) With respect to any Joint
Patent Rights, the Parties shall consult with each other regarding the filing,
prosecution and maintenance of any Patents and Patent Applications, and
responsibility for such activities shall be the obligation of Regeneron.
Regeneron shall undertake such filings, prosecutions and maintenance in the
names of both Parties as co-owners using outside counsel reasonable acceptable
to Sanofi, ***************************************.

     

                   (c) The Parties shall have
the following obligations with respect to the filing, prosecution and
maintenance of any Joint Patent Rights, as well as any Product Patent Rights:
(i) the prosecuting Party (the “Prosecuting Party”) shall provide the other Party (the
“Non-Prosecuting Party”) with notice and a copy of a substantially
completed draft of any Patent Application at least thirty (30) days prior to the
filing of any such Patent Application by the Prosecuting Party and incorporate
all reasonable comments provided by the Non-Prosecuting Party within such thirty
(30) day period unless the Prosecuting Party reasonably believes that such
comments will adversely affect the scope or validity of the Patent Application
or resulting Patent (it being understood that the Parties will discuss any
points of disagreement and work to resolve disagreements during this thirty (30)
day period); (ii) the Prosecuting Party shall notify the Non-Prosecuting Party
prior to its filing of a Patent Application; (iii) the Prosecuting Party shall
consult with the Non-Prosecuting Party promptly following the filing of the
Patent Application to mutually determine in which countries it shall file
convention Patent Applications; (iv) the Prosecuting Party shall provide the
Non-Prosecuting Party promptly with copies of all material communications
received from or filed in patent offices with respect to such applications and
incorporate all reasonable comments provided by the Non-Prosecuting Party,
unless the Prosecuting Party reasonably believes that such comments will
adversely affect the validity or scope of the Patent Application or resulting
Patent for both Parties; and (v) the Prosecuting Party shall provide the
Non-Prosecuting Party a reasonable time prior to taking or failing to take
action that would affect the scope or validity of rights under any Patent
Applications or Patents, but in no event less than sixty (60) days prior to the
next deadline for any action that may be taken with the applicable patent
office, (including but not limited to substantially narrowing or canceling any
claim without reserving the right to file a continuing or divisional Patent
Application, abandoning any Patent or not filing or perfecting the filing of any
Patent Application in any country), with notice of such proposed action or
inaction so that the Non-Prosecuting Party has a reasonable opportunity to
review and make comments, and take such actions as may be appropriate in the
circumstances, including assuming the Prosecuting Party’s responsibility for
filing, prosecution and maintenance of any such Product Patent Right or Joint
Patent Right and becoming the Prosecuting Party. With respect to Joint
Inventions, it is understood that the Prosecuting Party and Non-Prosecuting
Party shall use all reasonable efforts to reach agreement on all material
filings and amendments and no such material filings or amendments shall be made
by the Non-Prosecuting Party without the prior written agreement of the
Non-Prosecuting Party, such agreement not to be unreasonably withheld or
delayed. In addition, in the event that the Prosecuting Party materially
breaches the foregoing obligations and such material breach is not cured within
thirty (30) days of a written notice from the Non-Prosecuting Party describing
such breach in reasonable detail, or in the event that the Prosecuting Party
fails to undertake the filing of a Patent Application within the earlier of (i)
ninety (90) days of a written request by the Non-Prosecuting Party to do so, and
(ii) sixty (60) days prior to the anticipated filing date, the Non-Prosecuting
Party may assume the Prosecuting Party’s responsibility for filing, prosecution
and maintenance of any such Product Patent Right and will thereafter be deemed
the Prosecuting Party for purposes hereof. Notwithstanding the foregoing, the
Prosecuting Party may withdraw from or abandon any Patent or Patent Application
on thirty (30) days’ prior notice to the Non-Prosecuting Party (provided that such notice shall be given no later than
sixty (60) days prior to the next deadline for any action that may be taken with
respect to such Patent or Patent Application with the applicable patent office),
providing the Non-Prosecuting Party a free-of-charge option to assume the
prosecution or maintenance thereof. The Parties will file and prosecute Patent
Applications described in this Section 6.2(a) in the list of countries set forth in
Exhibit B, unless otherwise agreed upon by the Parties.


     

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                   (d) All costs incurred in the
filing, prosecution and maintenance of any Joint Patent Rights and Product
Patent Rights and in performing freedom to operate analyses on Program Targets
or Lead Candidates shall be shared equally by the Parties.

     

                   (e) Each Party shall have the
right to invoke the Cooperative Research and Technology Enhancement Act of 2004,
35 U.S.C. 103(c)(2)-(c)(3) (the "CREATE Act") with respect to Joint Inventions,
without the prior written consent of the other Party. In the event that a Party
intends to invoke the CREATE Act, as permitted by the preceding sentence, it
shall notify the other Party and the Parties shall reasonably cooperate and
coordinate their activities with respect to any submissions, filings or other
activities in support thereof. The Parties acknowledge and agree that this
Agreement is a "joint research agreement" as defined in the CREATE Act. For the
avoidance of doubt, nothing in this Section 6.2(e) shall amend or modify the determination of
ownership of intellectual property as set forth in Section 6.1. 

     

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              6.3 Third Party Claims. In the normal course of business, Regeneron
shall carry out patent searches in relation to the Program Targets, Lead
Candidates, and Product Candidates, as well as the technologies used to
discover, develop and commercialize any of the foregoing, and will disclose,
along with any analysis, to Sanofi’s counsel any conflict or likely conflict of
which Regeneron is aware with respect to the Patent Rights of any Third Party
with respect to any such Program Targets, Lead Candidates and Product Candidates
prior to selection to enter IND Preparation. If either Party or its Affiliates
shall learn of a Third Party claim that the activities under the Discovery
Program infringe or otherwise violate the intellectual property rights of any
Third Party in the Territory, then such Party shall promptly notify the other
Party in writing of this claim, assertion or certification. As soon as
reasonably practical after the receipt of such notice, the Parties shall cause
their respective legal counsel to meet to confer on such allegation of
infringement. In particular, with regard to issues related to freedom to operate
concerning Targets pursued under this Agreement, the Parties shall conduct and
maintain ongoing and regular communications between their legal/intellectual
property departments. 

     

    ARTICLE 7

     

    BOOKS, RECORDS AND INSPECTIONS; AUDITS AND
ADJUSTMENTS 

     

              7.1 Books and Records. Each Party shall keep proper books of record
and account in which full, true and correct entries (in conformity with GAAP)
shall be made for the purpose of determining the amounts payable or owed
pursuant to this Agreement. Each Party shall permit auditors, as provided in
Section 7.2, to visit and inspect, during regular
business hours and under the guidance of its employees, the books of record and
account of such Party to the extent relating to this Agreement and discuss its
affairs, finances and accounts to the extent relating to this Agreement.


     

              7.2 Audits and Adjustments.

     

                   (a) Each Party shall have the
right, upon no less than thirty (30) days’ advance written notice and at such
reasonable times and intervals and to such reasonable extent as the Party shall
request, not more than once during any Contract Year, to have the books and
records of the other Party to the extent relating to this Agreement for the
preceding two (2) years audited by an independent “Big Four” (or equivalent)
accounting firm of its choosing under reasonable, appropriate confidentiality
provisions, for the sole purpose of verifying the accuracy of all financial,
accounting and numerical information and calculations provided, and payments
made, under this Agreement; provided that no period may be subjected to audit more
than one (1) time unless a material discrepancy is found in any such audit of
such period, in which case additional audits of such period may be conducted
until no material discrepancies are found. 

     

                   (b) The results of any such
audit shall be delivered in writing to each Party and shall be final and binding
upon the Parties, unless disputed by a Party within ninety (90) days of
delivery. If a Party over billed or underpaid an amount due under this Agreement
resulting in a cumulative discrepancy during any year of more than ******, it
shall also reimburse the other Party for the costs of such audit (with the cost
of the audit to be paid by the Party initiating the audit in all other cases).
Such accountants shall not reveal to the Party requesting the audit the details
of its review, except for the findings of such review and such information as is
required to be disclosed under this Agreement, and shall be subject to the
confidentiality provisions contained in Article
9.

     

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                   (c) If any examination or
audit of the records described above discloses an over billing or underpayment
of amounts due hereunder, then unless the result of the audit is contested
pursuant to Section 7.2(b) above, the Party that overbilled or underpaid
shall pay the same (plus interest thereon at the Default Interest Rate from the
date of such over billing or underpayment through the date of payment of the
amount required to be paid pursuant to this Section 7.2(c)) to the Party entitled thereto within thirty
(30) days after receipt of the written results of such audit pursuant to this
Section 7.2. 

     

                   (d) Disputes. Any disputes with respect to the results of
any audit conducted under Section 7.2 above shall be resolved by binding
arbitration in accordance with Section 13.1 below.

     

              7.3 IAS/IFRS/GAAP. Except as otherwise provided herein, all
costs and expenses and other financial determinations with respect to this
Agreement shall be determined in accordance with IAS/IFRS, and for the US, if
desired, GAAP, as generally and consistently applied. 

     

    ARTICLE 8

     

    REPRESENTATIONS, WARRANTIES AND
COVENANTS 

     

              8.1 Joint Representations and
Warranties. Each Party
hereto represents and warrants to the other Party, as of the Effective Date, as
follows: (a) it is duly organized and validly existing under the Laws of its
jurisdiction of incorporation; (b) it has full corporate power and authority and
has taken all corporate action necessary to enter into and perform this
Agreement; (c) the execution and performance by it of its obligations hereunder
will not constitute a breach of, or conflict with, its organizational documents
nor any other material agreement or arrangement, whether written or oral, by
which it is bound or requirement of applicable Laws or regulations; (d) this
Agreement is its legal, valid and binding obligation, enforceable in accordance
with the terms and conditions hereof (subject to applicable Laws of bankruptcy
and moratorium); (e) such Party is not prohibited by the terms of any agreement
to which it is a party from performing the Discovery Program or granting the
rights and/or licenses hereunder; and (f) no broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee in connection with this
Agreement or the transactions contemplated hereby based on arrangements made by
it or on its behalf. 

     

         8.2 Knowledge of Pending or Threatened
Litigation. Each Party
represents and warrants to the other Party that, as of the Effective Date, there
is no claim, announced investigation, suit, action or proceeding pending or, to
such Party’s knowledge, threatened, against such Party before or by any court,
arbitrator, or Governmental Authority that, individually or in the aggregate,
could reasonably be expected to (a) materially impair the ability of such Party
to perform any of its obligations under this Agreement or (b) prevent or
materially delay or alter the consummation of any or all of the transactions
contemplated hereby. During the term of the Discovery Program, each Party shall
promptly notify the other Party in writing upon learning of any of the
foregoing.

     

    38

     

    

    
    


              8.3 Additional Regeneron Representations,
Warranties and Covenants.
Regeneron additionally represents and warrants to Sanofi that, as of the
Effective Date: 

     

                   (a) Regeneron owns or has a valid license to all Regeneron Patent Rights in
existence as of the Effective Date; 

     

                   (b) Regeneron has the right and authority to grant the rights (including the
Opt-In Rights) granted pursuant to the terms and conditions of this Agreement
and Regeneron has not granted, and will not grant during the term of this
Agreement, any rights that would be inconsistent with or in conflict with or in
derogation of the rights granted herein; 

     

                   (c) there is no pending litigation of which Regeneron has received notice or
is otherwise aware that alleges that any of Regeneron’s activities relating to
the Mice or the Regeneron Intellectual Property have violated, or would violate,
the intellectual property rights of any Third Party (nor has it received any
written communication threatening such litigation);

     

                   (d) to Regeneron’s knowledge, no litigation has been otherwise threatened
which alleges that any of its activities relating to the Mice or the Regeneron
Intellectual Property have violated or would violate, any intellectual property
rights of any Third Party; 

     

                   (e) to Regeneron’s knowledge, after due inquiry, the use of the Mice and the
Regeneron Intellectual Property generally in the Discovery Program (but not with
respect to a specific MTC or Target) does not and will not infringe or otherwise
violate any valid Patent or provisional rights to applications or other
intellectual property of any Third Party claiming genetically modified mice or
the use thereof to make antibodies; 

     

                   (f) neither the development or reproduction of the Mice nor the conception,
development and reduction to practice of any Regeneron Intellectual Property
existing as of the Effective Date has constituted or involved the
misappropriation of trade secrets or other rights of any Person; 

     

                   (g) to Regeneron’s knowledge, the issued Patents included in the Regeneron
Intellectual Property existing as of the Effective Date are not invalid or
unenforceable, in whole or part; 

     

                   (h) Regeneron has not received any written notice of any threatened claims or
litigation seeking to invalidate or otherwise challenge the Regeneron Patent
Rights or Regeneron’s rights therein, and, to Regeneron’s knowledge, none of the
Regeneron Patent Rights are subject to any pending re-examination, opposition,
interference or litigation proceedings; and

     

    39 

     

    

    
    



                   (i) neither Regeneron nor any of its Affiliates shall transfer ownership,
assign ownership, grant a security interest in or otherwise encumber any of its
rights in, to or under any Regeneron Intellectual Property in a way that will
impair Sanofi’s rights or
Regeneron ability to perform its obligations under this
Agreement. 

     

    ***************************************. 

     

              8.4 Disclaimer of Warranties. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
CONCERNING THE SUCCESS OR POTENTIAL SUCCESS OF THE DEVELOPMENT,
COMMERCIALIZATION, MARKETING OR SALE OF ANY PRODUCT. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 

     

    ARTICLE 9 

     

    CONFIDENTIALITY 

     

              9.1 Confidential Information. During the term of this Agreement and for a
period of five (5) years thereafter, each Party (in such capacity, the
“Receiving Party”) shall keep confidential, and other than as
provided herein or in the License and Collaboration Agreement, shall not use or
disclose, directly or indirectly, any and all trade secrets or other proprietary
information, including, without limitation, any proprietary data, inventions,
documents, ideas, information, discoveries, or materials, owned, developed, or
possessed by the other Party (in such capacity, the “Disclosing Party”), whether in tangible or intangible form,
the confidentiality of which the Disclosing Party takes reasonable measures to
protect, including but not limited to Regeneron Know-How and Sanofi Know-How
disclosed by the Disclosing Party under this Agreement (the “Confidential Information”). For purposes of this Agreement, all
confidential information disclosed by Regeneron under the terms of the
confidentiality agreements between Sanofi Parent and Regeneron dated February 1,
2007 and October 23, 2007 is hereby deemed Confidential Information of
Regeneron. Each of Sanofi and Regeneron covenants that neither it nor any of its
respective Affiliates shall disclose any Confidential Information of the other
Party to any Third Party except to its employees, agents, consultants or any
other Person under its authorization; provided such employees, agents, consultants or other
Persons are subject in writing to confidentiality obligations applicable to the
Disclosing Party’s Confidential Information no less strict than those set forth
herein. 

     

                   (a) Notwithstanding the foregoing, Confidential Information shall not be
deemed to include information and materials (and such information and materials
shall not be considered Confidential Information under this Agreement) to the
extent that it can be established by written documentation by the Receiving
Party that such information or material is: (i) already in the public domain as
of the Effective Date or becomes publicly known through no act, omission or
fault of the Receiving Party or any Person to whom the Receiving Party provided
such information; (ii) is or was already in the possession of the Receiving
Party at the time of disclosure by the Disclosing Party; (iii) is disclosed to
the Receiving Party on an unrestricted basis from a Third Party not under an
obligation of confidentiality to the Disclosing Party or any Affiliate of the Disclosing Party with respect to such
information; (iv) information that has been independently created by the
Receiving Party (or its Affiliate), as evidenced by written or electronic
documentation, without any aid, application or use of the Disclosing Party’s
Confidential Information; or (v) required by Law to be disclosed, provided that the Receiving Party uses reasonable
efforts to give the disclosing Party advance notice of such required disclosure
in sufficient time to enable the Disclosing Party to seek confidential treatment
for such information, and provided further that the Receiving Party provides all
reasonable cooperation to assist the Disclosing Party to protect such
information and limits the disclosure to that information which is required by
Law to be disclosed.

     

    40 

     

    

    
    



                   (b) Information and other Know-How that is discovered by Regeneron in
connection with the Discovery Program will be considered Regeneron’s
Confidential Information, except to the extent it relates to a Licensed Product,
in which case it shall be Confidential Information of both Parties, subject to
the terms of the License and Collaboration Agreement. 

     

                   (c) Specific aspects or details of Confidential Information will not be
deemed to be within the public knowledge or in the prior possession of a Person
merely because such aspects or details of the Confidential Information are
embraced by general disclosures in the public domain. In addition, any
combination of Confidential Information will not be considered in the public
knowledge or in the prior possession of either Person merely because individual
elements thereof are in the public domain or in the prior possession of a Person
unless (i) the combination and its principles are in the public knowledge or in
the prior possession of that Person and (ii) the combination is documented, in a
single contemporaneous document, as in the public knowledge or in the prior
possession of a Person. 

     

                   (d) Notwithstanding anything else in this Agreement to the contrary, each
Party hereto (and each employee, representative, or other agent of any Party)
may disclose to any and all Persons, without limitation of any kind, the Federal
income tax treatment and Federal income tax structure of any and all
transaction(s) contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to any Party (or
to any employee, representative, or other agent of any party) relating to such
tax treatment or tax structure, provided, however, that this authorization of disclosure shall
not apply to restrictions reasonably necessary to comply with securities laws.
This authorization of disclosure is retroactively effective immediately upon
commencement of the first discussions regarding the transactions contemplated
herein, and the Parties aver and affirm that this tax disclosure authorization
has been given on a date which is no later than thirty (30) days from the first
day that any Party hereto (or any employee, representative, or other agent of
any party hereto) first made or provided a statement as to the potential tax
consequences that may result from the transactions contemplated
hereby.

     

              9.2 Injunctive Relief. The Parties hereby acknowledge and agree
that the rights of the Parties hereunder are special, unique and of
extraordinary character, and that if any Party refuses or otherwise fails to
act, or to cause its Affiliates to act, in accordance with the provisions of
this Agreement, such refusal or failure would result in irreparable injury to
the other Party, the exact amount of which would be difficult to ascertain or
estimate and the remedies at law for which would not be reasonable or adequate
compensation. Accordingly, if any Party
refuses or otherwise fails to act, or to cause its Affiliates to act, in
accordance with the provisions of this Agreement, then, in addition to any other
remedy which may be available to any damaged Party at law or in equity, such
damaged Party will be entitled to seek specific performance and injunctive
relief, without posting bond or other security, and without the necessity of
proving actual or threatened damages, which remedy such damaged party will be
entitled to seek in any court of competent jurisdiction. 

     

    41 

     

    

    
    



              9.3 Publications. If either Sanofi or Regeneron (the
“Publishing Party”) desires to publish or publicly present any
results from the Discovery Program in scientific journals, publications or
scientific presentations or otherwise, the Publishing Party shall provide the
other Party an advance final copy of any proposed publication or summary of a
proposed oral presentation relating to the information from the Discovery
Program prior to submission for publication or disclosure. Such other Party
shall have a reasonable opportunity to recommend any changes it reasonably
believes are necessary to preserve the confidentiality of its Confidential
Information and to recommend any changes it reasonably believes are necessary to
prevent any specific, material adverse effect to it as a result of the
publication or disclosure, to which the Publishing Party shall give due
consideration. If such other Party informs the Publishing Party, within thirty (30) days of
receipt (or such other period agreed to by the JRC) of an advance copy of a
proposed publication or summary of a proposed oral presentation, that such
publication in its reasonable judgment should not be published or presented, the
Publishing Party shall delay or prevent such disclosure or publication as
proposed by the other Party. In the case of patentable inventions, the delay
shall be sufficiently long to permit the timely preparation and filing of a
patent application(s) or application(s) for a certificate of invention on the
information involved. The Parties shall establish a publication review process
to ensure compliance with this Section 9.3. 

     

              9.4 Disclosures Concerning this
Agreement. The Parties
will mutually agree upon the contents of a their respective press releases with
respect to the execution of this Agreement and the License and Collaboration
Agreement which shall be issued simultaneously by both Parties on the Effective
Date. Sanofi and Regeneron agree not to (and to ensure that their respective
Affiliates do not) issue any other press releases or public announcements
concerning this Agreement or any other activities contemplated hereunder without
the prior written consent of the other Party (which shall not be unreasonably
withheld or delayed), except as required by a Governmental Authority or
applicable Law (including the rules and regulations of any stock exchange or
trading market on which a Party’s (or its parent entity’s) securities are
traded); provided that the Party intending to disclose such
information shall use reasonable efforts to provide the other Party advance
notice of such required disclosure, an opportunity to review and comment on such
proposed disclosure (which comments shall be considered in good faith by the
disclosing Party) and all reasonable cooperation to assist the other Party to
protect such information and shall limit the disclosure to that information
which is required to be disclosed. Notwithstanding the foregoing, without prior
submission to or approval of the other Party, either Party may issue press
releases or public announcements which incorporate information concerning this
Agreement or any activities contemplated hereunder which information was
included in a press release or public disclosure which was previously disclosed
under the terms of this Agreement or which contains only non-material factual
information regarding this Agreement. Except as required by a Governmental
Authority or applicable Law (including the rules and regulations of any stock
exchange or trading market on which a Party’s (or its parent entity’s) securities are traded), or in connection with
the enforcement of this Agreement, neither Party (or their respective
Affiliates) shall disclose to any Third Party, under any circumstances, any
financial terms of this Agreement that have not been previously disclosed
publicly pursuant to this Article 9 without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed; except
for disclosures to Third Parties that are bound by obligations of
confidentiality and nonuse substantially equivalent in scope to those included
herein with a term of at least five (5) years. Each Party acknowledges that the
other Party as a publicly traded company is legally obligated to make timely
disclosures of all material events relating to its business. The Parties
acknowledge that either or both Parties may be obligated to file a copy of this
Agreement with the United States Securities and Exchange Commission or its
equivalent in the Territory. Each Party will be entitled to make such filing but
shall cooperate with one another and use reasonable efforts to obtain
confidential treatment of confidential, including trade secret, information in
accordance with applicable Law. The filing Party will provide the non-filing
Party with an advance copy of the Agreement marked to show provisions for which
the filing Party intends to seek confidential treatment and will reasonably
consider the non-filing Party’s timely comments thereon. 

     

    42 

     

    

    
    



    ARTICLE 10 

     

    INDEMNITY 

     

              10.1 Indemnity and Insurance. 

     

                   (a) Sanofi will defend, indemnify and hold harmless Regeneron, its Affiliates
and their respective officers, directors, employees and agents (“Regeneron Indemnitees”) from and against all claims, demands,
liabilities, damages, penalties, fines and expenses, including reasonable
attorneys’ fees and costs (collectively, “Damages”), arising from or occurring as a result of a
Third Party’s claim, action, suit, judgment or settlement against a Regeneron
Indemnitee that is due to or based upon: 

     

                   (i) the negligence, recklessness, bad faith, intentional wrongful acts or
omissions of Sanofi or its Affiliates in connection with the Discovery Program,
except to the extent that Damages arise out of the negligence, recklessness, bad
faith or intentional wrongful acts, or omissions committed by Regeneron or its
Affiliates; or 

     

                   (ii) material breach by Sanofi of the terms of, or the inaccuracy of any
representation or warranty made by it in, this Agreement. 

     

                   (b) Regeneron will defend, indemnify and hold harmless Sanofi, its Affiliates
and their respective officers, directors, employees and agents (“Sanofi Indemnitees”) from and against
all Damages arising from or occurring as a result of a Third Party’s claim,
action, suit, judgment or settlement against a Sanofi Indemnitee that is due to
or based upon: 

     

                   (i) the negligence, recklessness, bad faith, intentional wrongful acts or
omissions of Regeneron or its Affiliates in connection with the Discovery
Program, except to the extent that Damages arise out of the negligence, recklessness, bad faith or intentional
wrongful acts, or omissions committed by Sanofi or its Affiliates; or


     

    43 

     

    

    
    



                   (ii) material breach by
Regeneron of the terms of, or the inaccuracy of any representation or warranty
made by it in, this Agreement.

     

              10.2 Indemnity Procedure. 

     

                   (a) The Party entitled to
indemnification under this Article 10 (an “Indemnified Party”) shall notify the Party potentially
responsible for such indemnification (the “Indemnifying Party”) within five (5) Business Days of becoming
aware of any claim or claims asserted or threatened in writing against the
Indemnified Party which could give rise to a right of indemnification under this
Agreement; provided, however, that the failure to give such notice shall
not relieve the Indemnifying Party of its indemnity obligation hereunder except
to the extent that such failure materially prejudices its rights hereunder.


     

                   (i) If the Indemnifying Party
has acknowledged in writing to the Indemnified Party the Indemnifying Party’s
responsibility for defending such claim, the Indemnifying Party shall have the
right to defend, at its sole cost and expense, such claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party; provided, however, that the Indemnifying Party may not enter
into any compromise or settlement unless (i) such compromise or settlement
includes as an unconditional term thereof, the giving by each claimant or
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim; and (ii) the Indemnified Party consents to such compromise or
settlement, which consent shall not be withheld or delayed unless such
compromise or settlement involves (A) any admission of legal wrongdoing by the
Indemnified Party, (B) any payment by the Indemnified Party that is not
indemnified hereunder or (C) the imposition of any equitable relief against the
Indemnified Party. If the Indemnifying Party does not elect to assume control of
the defense of a claim or if a good faith and diligent defense is not being or
ceases to be materially conducted by the Indemnifying Party, the Indemnified
Party shall have the right, at the expense of the Indemnifying Party, upon at
least ten (10) Business Days’ prior written notice to the Indemnifying Party of
its intent to do so, to undertake the defense of such claim for the account of
the Indemnifying Party (with counsel reasonably selected by the Indemnified
Party and approved by the Indemnifying Party, such approval not unreasonably
withheld or delayed), provided, that the Indemnified Party shall keep the
Indemnifying Party apprised of all material developments with respect to such
claim and promptly provide the Indemnifying Party with copies of all
correspondence and documents exchanged by the Indemnified Party and the opposing
party(ies) to such litigation. The Indemnified Party may not compromise or
settle such litigation without the prior written consent of the Indemnifying
Party, such consent not to be unreasonably withheld or delayed. 

     

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                   (ii) The Indemnified Party may participate in, but not control, any defense or
settlement of any claim controlled by the Indemnifying Party pursuant to this
Section 10.2 and shall bear its own costs and expenses
with respect to such participation; provided, however, that the Indemnifying Party shall bear such
costs and expenses if counsel for the Indemnifying Party shall have reasonably
determined that such counsel may not properly represent both the Indemnifying
and the Indemnified Party. 

     

                   (iii) The amount of any Damages for which indemnification is provided under
this Article 10 will be reduced by the insurance proceeds
received, and any other amount recovered, if any, by the Indemnified Party in
respect of any Damages. 

     

                   (iv) If an Indemnified Party receives an indemnification payment pursuant to
this Article 10 and subsequently receives insurance proceeds
from its insurer with respect to the damages in respect of which such
indemnification payment(s) was made, the Indemnified Party will promptly pay to
the Indemnifying Party an amount equal to the difference (if any) between (i)
the sum of such insurance proceeds or other amounts received, and the
indemnification payment(s) received from the Indemnifying Party pursuant to this
Article 10 and (ii) the amount necessary to fully and
completely indemnify and hold harmless the Indemnified Party from and against
such Damages. However, in no event will such refund ever exceed the Indemnifying
Party’s indemnification payment(s) to the Indemnified Party under this
Article 10. 

     

    ARTICLE 11 

     

    FORCE MAJEURE 

     

         Neither Party will be held liable or responsible to the other Party nor
be deemed to have defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of this Agreement when such failure
or delay is caused by or results from causes beyond the reasonable control of
the affected Party including, without limitation, embargoes, acts of terrorism,
acts of war (whether war be declared or not), insurrections, strikes, riots,
civil commotions, or acts of God (“Force Majeure”). Such excuse from liability and
responsibility shall be effective only to the extent and duration of the
event(s) causing the failure or delay in performance and provided that the affected party has not caused such
event(s) to occur. The affected Party will notify the other Party of such Force
Majeure circumstances as soon as reasonably practical and will make every
reasonable effort to mitigate the effects of such Force Majeure circumstances.
In the event of a Force Majeure, the performance of the Party giving such
notification shall be abated and any time deadlines shall be extended for so
long as the performance is prevented by Force Majeure. In no event will any
Force Majeure extend beyond one hundred eighty (180) days. In the event of a
Force Majeure affecting satisfaction of the criteria set forth in Section 4.10,
the applicable time deadline set forth in Section 4.10 shall be extended for so
long as such Force Majeure continues, but in no event shall such extension
period exceed one hundred eighty (180) days. 

     

    45 

     

    

    
    


    ARTICLE 12 

     

    TERM AND TERMINATION 

     

              12.1 Term. The “Term” of this Agreement commenced on the Original
Agreement Effective Date and shall end upon the end of the Discovery Program,
including any Tail Period, unless this Agreement is earlier terminated in
accordance with this Article 12 in which event the Term shall end on the
effective date of such termination. 

     

              12.2 Termination For Material
Breach. Upon and subject
to the terms and conditions of this Section 12.2, this Agreement shall be terminable by a
Party in its entirety if the other Party commits a material breach of this
Agreement. Such notice of termination shall set forth in reasonable detail the
facts underlying or constituting the alleged breach (and specifically
referencing the provisions of this Agreement alleged to have been breached), and
the termination which is the subject of such notice shall be effective ninety
(90) days after the date such notice is given unless the breaching Party shall
have cured such breach within such ninety (90) day period. Notwithstanding the
foregoing, in the case of breach of a payment obligation not subject to a bona
fide dispute hereunder, the ninety (90) day period referred to in the
immediately preceding sentence shall instead be forty-five (45) days. For
purposes of this Section 12.2, the term “material breach” shall mean an
intentional, continuing (and uncured within the time period described above),
material breach by a Party as determined by binding arbitration consistent with
the provisions of Section 13.1 of this Agreement. 

     

              12.3 Termination for Insolvency. Either Party shall have the right to
terminate this Agreement in its entirety if, at any time, (a) the other Party
shall file in any court or agency pursuant to any statute or regulation of any
state or country, a petition in bankruptcy or insolvency or for reorganization
or for an arrangement or for the appointment of a receiver or trustee of the
Party or of its assets, or (b) if the other Party proposes a written agreement
of composition or extension of its debts, or (c) if the other Party shall be
served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or (d) if the other Party shall propose or be a party
to any dissolution or liquidation, or (e) if the other Party shall make an
assignment for the benefit of creditors. In the event that this Agreement is
terminated or rejected by a Party or its receiver or trustee under applicable
bankruptcy Laws due to such Party’s bankruptcy, then all rights and licenses
granted under or pursuant to this Agreement by such Party to the other Party
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
U.S. Bankruptcy Code and any similar Laws in any other country in the Territory,
licenses of rights to “intellectual property” as defined under Section 101(52)
of the U.S. Bankruptcy Code. The Parties agree that all intellectual property
rights licensed hereunder, including, without limitation, any Patent Rights in
any country of a Party covered by the license grants under this Agreement, are
part of the “intellectual property” as defined under Section 101(52) of the
Bankruptcy Code subject to the protections afforded the non-terminating Party
under Section 365(n) of the Bankruptcy Code, and any similar law or regulation
in any other country.

     

    46 

     

    

    
    



              12.4 Termination for Breach of
Standstill. Regeneron
shall have the unilateral right to terminate this Agreement in its entirety,
effective immediately upon written notice to Sanofi, if Sanofi or any of its
Affiliates shall have breached their obligations under any of Sections 3, 4 or 5
of the Investor Agreement (to the extent such sections of the Investor Agreement
is then in effect). Furthermore, Regeneron shall have the unilateral right to
terminate this Agreement in its entirety, effective immediately upon written
notice to Sanofi, if Sanofi or any of its Affiliates shall have (a) breached
their obligations under Section 20.16 of the Aventis Collaboration Agreement, to
the extent that such Section 20.16 remains in effect after the Effective Date,
or (b) breached its obligations under Section 5.3 of the Stock Purchase
Agreement, dated as of September 5, 2003, by and between Sanofi and Regeneron
(the “Aventis Stock Purchase Agreement”), to the extent that such Section 5.3
remains in effect after the Effective Date. Any such breach of the Investor
Agreement, the Aventis Stock Purchase Agreement or the Aventis Collaboration
Agreement, as the case may be, shall be treated as a breach of this Agreement.
Notwithstanding the foregoing and for the avoidance of doubt, Regeneron shall
not have the right to terminate this Agreement as a result of (i) a de minimus
breach of Section 3.1(a) of the Investor Agreement (to the extent such Section
3.1(a) is in effect after the Effective Date) or of Section 20.16(a) of the
Aventis Collaboration Agreement (to the extent such Section 20.16(a) remains in
effect after the Effective Date) or (ii) an inadvertent breach of Section 3.1(g)
of the Investor Agreement (to the extent such Section 3.1(g) is in effect after
the Effective Date) or an inadvertent breach of Section 20.16(g) of the Aventis
Collaboration Agreement (to the extent such Section 20.16(g) remains in effect
after the Effective Date), arising from informal discussions covering general
corporate or other business matters the purpose of which is not intended to
effectuate or lead to any of the actions referred to in paragraphs (a) through
(e) of such Section 20.16 or of paragraphs (a) through (e) of Section 3.1 of the
Investor Agreement, as applicable. Sanofi’s rights under Sections 2.16 and 2.17 shall survive termination of this Agreement
pursuant to this Section 12.4. 

     

              12.5 Termination for Breach of License and
Collaboration Agreement.
Notwithstanding anything to the contrary herein, (a) Regeneron shall have the
unilateral right to terminate this Agreement in its entirety, effective
immediately upon providing written notice to Sanofi, if Regeneron has terminated
the License and Collaboration Agreement, in its entirety, pursuant to Section
19.3, 19.4, or 19.5 of the License and Collaboration Agreement, and (b) Sanofi
shall have the unilateral right to terminate this Agreement in its entirety,
effective immediately upon providing written notice to Regeneron, if Sanofi has
terminated the License and Collaboration Agreement, in its entirety, pursuant to
Section 19.3 or 19.4 of the License and Collaboration Agreement. 

     

              12.6 Effect of Termination by Sanofi for
Breach. In addition to the
provisions of Section 12.8 below, notwithstanding anything herein to the
contrary, in the event that Sanofi terminates this Agreement pursuant to
Section 12.2 of this Agreement the following shall apply:


     

                   (a) Sanofi shall be granted a non-exclusive, non-transferable, royalty free,
worldwide license, without the right to sublicense, for a period that shall
expire eleven (11) years from the Original Agreement Effective Date, to the Mice
and the underlying Regeneron Intellectual Property for Sanofi and its Affiliates
to use to discover and develop MTCs for any and all purposes; 

     

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                   (b) Regeneron shall perform a timely and expeditious technology transfer as
required by Sanofi to pursue its rights under subsection (a) without delay above subject to the execution
of a material transfer agreement containing non-financial terms and conditions
related to the use of the Mice consistent with Regeneron’s commercial license
agreements for the Mice; 

     

                   (c) the licenses granted to Regeneron under this Agreement shall
automatically terminate; 

     

                   (d) Sanofi shall be granted an exclusive, fully paid-up, non-transferable,
royalty-free, worldwide license, with the right to sublicense, under Regeneron
Target IP existing at the effective time of termination solely for use to
develop and commercialize Antibodies against Sanofi Targets (and for no other
uses), and the co-exclusive (with Regeneron and its Affiliates) fully paid-up,
non-transferable, royalty-free, worldwide license, with the right to sublicense
under Regeneron Target IP to develop and commercialize Antibodies against all
other Program Targets at the effective time of termination (and for no other
uses); 

     

                   (e) Sanofi’s rights under Sections 2.16, and 2.17 shall survive; and 

     

                   (f) Sanofi shall have no further funding obligations under Section 4.2 of the Agreement.

     

              12.7 Effect of Termination by Regeneron for
Breach. In addition to the
provisions of Sections 12.8 and 12.10 below, notwithstanding anything herein to the
contrary, in the event that Regeneron terminates this Agreement pursuant to
Section 12.2 or 12.4 of this Agreement, the following shall apply:


     

                   (a) the licenses granted to Sanofi under this Agreement shall automatically
terminate; 

     

                   (b) the rights granted to Sanofi under this Agreement in Sections 2.16 and 2.17 shall automatically terminate; 

     

                   (c) Regeneron shall be granted an exclusive, fully paid-up, non-transferable,
royalty-free, worldwide, exclusive license, with the right to sublicense, under
Sanofi Target IP existing at the effective time of termination solely for use to
develop and commercialize Antibodies against Program Targets other than Sanofi
Discovery Targets (and for no other uses), and the co-exclusive (with Sanofi and
its Affiliates) fully paid-up, non-transferable, royalty-free, worldwide
license, with the right to sublicense under Sanofi Target IP to develop and
commercialize Antibodies against all Sanofi Discovery Targets at the effective
time of termination (and for no other uses).

     

              12.8 Survival of Obligations. Subject to Sections 12.6, 12.7, and 12.11 and except as otherwise provided below, upon
expiration or termination of this Agreement, the rights and obligations of the
Parties hereunder shall terminate, and this Agreement shall cease to be of
further force or effect: 

     

    48 

     

    

    
    



                   (a) neither Sanofi nor Regeneron shall be relieved of any obligations
(including payment obligations) of such Party arising prior to such expiration
or termination, including, without limitation, the payment of any non-cancelable
costs and expenses incurred as part of the Discovery Program (even if such costs
and expenses arise following termination or expiration, as the case may be);
provided, however, that Sanofi shall not be obligated to pay or
reimburse Regeneron for any such costs or expenses in the event Sanofi
terminates this Agreement pursuant to Section 12.2 above; 

     

                   (b) the obligations of the Parties with respect to the protection and
nondisclosure of the other Party’s Confidential Information in accordance with
Article 9, as well as other provisions (including,
without limitation, Sections 2.11(b), 2.11(c), 2.12 (except as set forth in Section 12.6 above), 2.13 (except as set forth in Section 12.7 above), 2.16, 2.17, 6.1(e), 6.2(b), 6.2(c), 6.2(d)(as it relates to Joint Patent Rights),
7.2, 10.1, 10.2, this Article 12, and Article 13) which by their nature are intended to
survive any such expiration or termination, shall survive and continue to be
enforceable;

     

                   (c) for the avoidance of doubt, the early termination of this Agreement by
either Party, and the expiration of this Agreement shall not relieve either
Party of any of its royalty or other obligations under Article 4 with respect to any Royalty Product, for
which royalties remain payable to the other Party under this Agreement; and such
royalty provisions of Article 4 shall survive; 

     

                   (d) for the avoidance of doubt, the licenses granted in Sections 2.11(b)(3), 2.11(c), 2.12, and 2.13 shall survive the termination or expiration
of this Agreement; and

     

                   (e) such expiration or termination and this Article 12 shall be without prejudice to any rights or
remedies a Party may have for breach of this Agreement. 

     

              12.9 Return of Confidential
Information. Subject to
either Parties’ licenses that survive termination or expiration, Confidential
Information disclosed by the Disclosing Party, including permitted copies, shall
remain the property of the Disclosing Party. Subject to the terms of the License
and Collaboration Agreement (with respect to Licensed Products), upon the
earlier to occur of (a) the termination of this Agreement or (b) the expiration
of the Discovery Program, or upon written request of the Disclosing Party, the
Receiving Party shall promptly return to the Disclosing Party or, at the
Disclosing Party’s request, destroy, all documents or other tangible materials
representing the Disclosing Party’s Confidential Information (or any designated
portion thereof); provided that one (1) copy may be maintained in the
confidential files of the Receiving Party for the purpose of complying with the
terms of this Agreement. An officer of the Receiving Party also shall certify in
writing that it has satisfied its obligations under this Section 12.9 within ten (10) days of a written request by
the Disclosing Party. 

     

              12.10 Special Damages. If Regeneron terminates this Agreement
pursuant to Section 12.2 or 12.4, then Sanofi shall pay to Regeneron, within
sixty (60) days of the termination of this Agreement, in addition to any other
amount payable by Sanofi to Regeneron under this Agreement under Laws, or
pursuant to any contractual remedies available to Regeneron, an amount equal to
the sum of the Maximum Annual Discovery Program Costs for each of the years, including the remaining
unpaid Maximum Annual Discovery Program Cost for the Contract Year in which such
termination is effective, that would have been the remainder of the term of the
Discovery Program but for the termination of this Agreement.


     

    49 

     

    

    
    



              12.11 Termination by Sanofi At
Will. Sanofi shall be
entitled to terminate this Agreement at any time (except following a material
breach of this Agreement by Sanofi pursuant to Section 12.2) without cause upon three months’ written
notice to Regeneron. If Sanofi terminates the Agreement under this Section 12.11, then Sanofi shall pay to Regeneron within
five (5) days of its notice of termination, an amount equal to the sum of the
Maximum Annual Discovery Program Costs for each of the years, including the
Remaining Unpaid Maximum Annual Discovery Program Cost for the Contract Year in
which such termination is effective, that would have been the remainder of the
term of the Discovery Program but for the termination of this Agreement. In
addition, Sanofi shall complete GLP toxicology studies conducted by Sanofi at
the time of termination, if applicable, and such other critical activities
conducted by Sanofi at the time of termination that cannot be transferred to
Regeneron without a material adverse effect on the completion of such
activities. In the event of such termination, in addition to the provisions of
Section 12.8, the following shall apply: 

     

                   (a) the rights granted to Sanofi under Sections 2.16 and 2.17 shall automatically terminate; and


     

                   (b) Regeneron shall be granted a non-exclusive, non-transferable, royalty
bearing (in accordance with Section 4.5) worldwide license with the right to
sublicense under Sanofi Target IP existing at the effective time of termination
solely for use to develop and commercialize (i) MTCs against Program Targets,
and (ii) any other Antibodies against Program Targets in existence and included
in the Discovery Program at the effective time of termination. 

     

    ARTICLE 13 

     

    ARBITRATION 

     

              13.1 Binding Arbitration. In the event the Parties cannot reach
agreement with respect to (i) the commercial reasonableness of the budget for
the Initial Development Plan for a Product Candidate, (ii) the royalty on Net
Sales of Immunoconjugates under Section 2.11(d)(i) of this Agreement, (iii) whether a breach
constitutes a “material breach” as described in Section 12.2 of this Agreement, and (iv) audits under
Section 7.2(d) above, and such disputes are not resolved by
the Executive Officers in accordance with Section 3.3(b) above, then the following shall apply:


     

                   (a) General. The respective disputed issue shall be
referred to binding arbitration by one (1) arbitrator who shall be an
independent expert in the pharmaceutical or biotechnology industry mutually
acceptable to the Parties. The Parties shall use their best efforts to mutually
agree upon one (1) arbitrator; provided, however, that if the Parties have not done so within
ten (10) days after initiation of arbitration hereunder, or such longer period
of time as the Parties have agreed to in writing, then such arbitrator shall be
an independent expert as described in the preceding sentence selected by the New
York office of the American Arbitration Association. Such arbitration shall be
limited to casting the deciding vote with respect to the disputed issues as more fully described in
Sections 13.1 (b)-(e) below. In connection therewith, each Party
shall submit to the arbitrator in writing its position on and desired resolution
of such matter. Such submission shall be made within ten (10) days of the
selection or appointment of the arbitrator, and the arbitrator shall rule on
such matter within ten (10) days of receipt of the written submissions by both
Parties. The arbitrator shall select one of the Party’s positions as his or her
decision, and shall not have authority to render any substantive decision other
than to so select the position of either Regeneron or Sanofi. Except as provided
in the preceding sentence, such arbitration shall be conducted in accordance
with the then-current Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator’s ruling shall be final and binding upon the
Parties. The costs of any arbitration conducted pursuant to this Section 13.1 shall be borne equally by the Parties. The
Parties shall use diligent efforts to cause the completion of any such
arbitration within sixty (60) days following a request by any Party for such
arbitration.

     

    50 

     

    

    
    



                   (b) Initial Development Plan
Budget. The specific issue
that shall be submitted to the arbitrator shall be limited to determining the
overall commercial reasonableness of the budget that is the subject of the
dispute. If the arbitrator determines that such budget is commercially
reasonable, then the dispute shall be deemed finally resolved and such
resolution shall be binding on the Parties. However, if the arbitrator
determines that such budget is not commercially reasonable, then the arbitrator
shall, within fifteen (15) days after such determination, render a final
determination as to what modifications must be made to such budget in order for
it to be commercially reasonable (the “Budget Modification
Decision”). In connection
with reaching a Budget Modification Decision, the arbitrator may order the
Parties to produce any documents or other information which are relevant to such
final decision, and the Parties shall submit such documents or other
information, together with their respective proposed resolutions which shall
consist of their proposed modifications to the budget in order for it to be
commercially reasonable, at least five (5) days prior to the date a Budget
Modification Decision is required to be rendered as provided above. In rendering
the final decision, the arbitrator shall be limited to choosing a resolution
proposed by a Party without modification. 

     

                   (c) Royalty on Net Sales of
Immunoconjugates: The
issue that shall be submitted to the arbitrator shall be the royalty rate to
apply under Section
2.11(d)(i).

     

                   (d) Material Breach Under Section 12.2:
The issue that shall be
submitted to the arbitrator shall be whether the breach committed by a Party
meets the requirements for a material breach under Section 12.2 of this Agreement.

     

                   (e) Audit Disputes. The issue that shall be submitted to the
arbitrator shall be disputes as described under Section 7.2(d) of this Agreement.

     

    ARTICLE 14 

     

    MISCELLANEOUS 

     

              14.1 Governing Law; Submission to
Jurisdiction. This
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York, without regard to the conflict of laws principles thereof
that would require the application of the Law of any other jurisdiction. Except
as set forth in Article 13 and 7.2(d), the Parties irrevocably and unconditionally submit to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York solely and specifically for the purposes of any action or proceeding
arising out of or in connection with this Agreement. 

     

    51 

     

    

    
    



              14.2 Waiver. Waiver by a Party of a breach hereunder by
the other Party shall not be construed as a waiver of any subsequent breach of
the same or any other provision. No delay or omission by a Party in exercising
or availing itself of any right, power or privilege hereunder shall preclude the
later exercise of any such right, power or privilege by such Party. No waiver
shall be effective unless made in writing with specific reference to the
relevant provision(s) of this Agreement and signed by a duly authorized
representative of the Party granting the waiver. 

     

              14.3 Notices. All notices, instructions and other
communications required or permitted hereunder or in connection herewith shall
be in writing, shall be sent to the address of the relevant Party set forth on
Schedule 10 attached hereto and shall be (a) delivered personally, (b) sent via
a reputable nationwide overnight courier service, or (c) sent by facsimile
transmission, with a confirmation copy to be sent by registered or certified
mail, return receipt requested, postage prepaid. Any such notice, instruction or
communication shall be deemed to have been delivered upon receipt if delivered
by hand, one (2) Business Days after it is sent via a reputable nationwide
overnight courier service or when transmitted with electronic confirmation of
receipt, if transmitted by facsimile (if such transmission is made during
regular business hours of the recipient on a Business Day; or otherwise, on the
next Business Day following such transmission). Either Party may change its
address by giving notice to the other Party in the manner provided above.


     

              14.4 Entire Agreement. This Agreement and the License and
Collaboration Agreement contain the complete understanding of the Parties with
respect to the subject matter hereof and thereof and supersede all prior
understandings and writings relating to the subject matter hereof and thereof.
It is understood and agreed that in the event of any conflict or inconsistency
between this Agreement and the License and Collaboration Agreement, this
Agreement shall control regarding the Parties’ rights and obligations with
respect to any Antibody (including any MTC), Lead Candidate or Product Candidate
in the Discovery Program (prior to Sanofi’s exercise of its Opt-In Rights with
respect to such Product Candidate), and the License and Collaboration Agreement
shall control regarding the Parties’ rights and obligations with respect to any
Licensed Product from and after the time a Product Candidate becomes a Licensed
Product. 

     

              14.5 Amendments. No provision in this Agreement shall be
supplemented, deleted or amended except in a writing executed by an authorized
representative of each of Sanofi and Regeneron. 

     

              14.6 Interpretation. The captions to the several Articles and
Sections of this Agreement are included only for convenience of reference and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, this Agreement. In this Agreement: (a) the word “including”
shall be deemed to be followed by the phrase “without limitation” or like
expression; (b) references to the singular shall include the plural and vice
versa; (c) references to masculine, feminine and neuter pronouns and expressions
shall be interchangeable; and (d) the
words “herein” or “hereunder” relate to this Agreement. Each accounting term
used herein that is not specifically defined herein shall have the meaning given
to it under GAAP, but only to the extent consistent with its usage and the other
definitions in this Agreement. 

     

    52 

     

    

    
    



              14.7 Severability. If, under applicable Laws, any provision
hereof is invalid or unenforceable, or otherwise directly or indirectly affects
the validity of any other material provision(s) of this Agreement in any
jurisdiction (“Modified Clause”), then, it is mutually agreed that this
Agreement shall endure and that the Modified Clause shall be enforced in such
jurisdiction to the maximum extent permitted under applicable Laws in such
jurisdiction; provided that the Parties shall consult and use all
reasonable efforts to agree upon, and hereby consent to, any valid and
enforceable modification of this Agreement as may be necessary to avoid any
unjust enrichment of either Party and to match the intent of this Agreement as
closely as possible, including the economic benefits and rights contemplated
herein.

     

              14.8 Assignment. Except as otherwise expressly provided
herein, neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Sanofi or Regeneron without (a) the prior written
consent of Regeneron in the case of any assignment by Sanofi or (b) the prior
written consent of Sanofi in the case of an assignment by Regeneron, except in
each case (i) to an Affiliate of the assigning Party that has and will continue
to have the resources and financial wherewithal to fully meet its obligations
under this Agreement, provided that the assigning Party shall remain
primarily liable hereunder notwithstanding any such assignment, or (ii) to any
Third Party who acquires all or substantially all of the business of the
assigning Party by merger, sale of assets or otherwise, so long as such
Affiliate or Third Party agrees in writing to be bound by the terms of this
Agreement. The assigning Party shall remain primarily liable hereunder
notwithstanding any such assignment. Any attempted assignment in violation
hereof shall be void. 

     

              14.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns, and shall also inure to the benefit of the Regeneron
Indemnitees and Sanofi Indemnitees to the extent provided in the last sentence
of Section 14.12 below. 

     

              14.10 Affiliates. Each Party may carry out its obligations
under this Agreement through its Affiliates and absolutely, unconditionally and
irrevocably guarantees to the other Party prompt performance when due and at all
times thereafter of the responsibilities, liabilities, covenants, warranties,
agreements and undertakings of its Affiliates pursuant to this Agreement.
Without limiting the foregoing, neither Party shall cause or permit any of its
Affiliates to commit any act (including any act or omission) which such Party is
prohibited hereunder from committing directly. Sanofi shall not, directly or
indirectly, cause or direct Sanofi Pasteur or Merial Limited to take any action
for which Sanofi and its Affiliates are prohibited hereunder from committing.
Each Party represents and warrants to the other Party that it has licensed or
will license from its Affiliates the Patents and Know-How owned by its
Affiliates that are to be licensed (or sublicensed) to the other Party under
this Agreement. 

     

    53 

     

    

    
    


              14.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument. 

     

              14.12 Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party, including any
creditor of any Party hereto. No Third Party shall obtain any right under any
provision of this Agreement or shall by reason of any such provision make any
claim in respect of any debt, liability or obligation (or otherwise) against any
Party hereto. Notwithstanding the foregoing, Article 10 is intended to benefit, in addition to the
Parties, the other Regeneron Indemnitees and Sanofi Indemnitees as if they were
parties hereto, but this Agreement is enforceable only by the Parties.


     

              14.13 Relationship of the Parties. Each Party shall bear its own costs incurred
in the performance of its obligations hereunder without charge or expense to the
other Party except as expressly provided in this Agreement. Neither Sanofi nor
Regeneron shall have any responsibility for the hiring, termination or
compensation of the other Party’s employees or for any employee compensation or
benefits of the other Party’s employees. No employee or representative of a
Party shall have any authority to bind or obligate the other Party to this
Agreement for any sum or in any manner whatsoever, or to create or impose any
contractual or other liability on the other Party without said Party’s approval.
For all purposes, and notwithstanding any other provision of this Agreement to
the contrary, Regeneron’s legal relationship under this Agreement to Sanofi, and
Sanofi’s legal relationship under this Agreement to Regeneron, shall be that of
an independent contractor. Nothing in this Agreement shall be construed to
establish a relationship of partners or joint ventures between the Parties or
any of their respective Affiliates. 

     

              14.14 Limitation of Damages. EXCEPT AS SET FORTH IN SECTION 12.10, IN NO EVENT SHALL REGENERON OR SANOFI BE
LIABLE FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY,
REGARDLESS OF THE THEORY OF LIABILITY (INCLUDING CONTRACT, TORT, NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE) AND REGARDLESS OF ANY PRIOR NOTICE OF SUCH
DAMAGES. HOWEVER, NOTHING IN THIS SECTION 14.14 IS INTENDED TO LIMIT OR RESTRICT THE
INDEMNIFICATION RIGHTS AND OBLIGATIONS OF EITHER PARTY HEREUNDER WITH RESPECT TO
THIRD PARTY CLAIMS . 

     

              14.15 Non-Solicitation. During the Term and for a period of two (2)
years thereafter, neither Party shall solicit or otherwise induce or attempt to
induce any employee of the other Party directly involved in the performance of
the Discovery Program to leave the employment of the other Party and accept
employment with the first Party. Notwithstanding the foregoing, this prohibition
on solicitation does not apply to actions taken by a Party solely as a result of
an employee’s affirmative response to a general recruitment effort carried
through a public solicitation or general solicitation. 

     

              14.16 No Strict Construction. This Agreement has been prepared jointly and
will not be construed against either Party. 

     

    54 

     

    

    
    



    [Remainder of page intentionally left blank;
signature page follows] 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    55 

     

    

    
    



         IN WITNESS WHEREOF, Sanofi and Regeneron have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written. 

     

    
      	
            	AVENTIS PHARMACEUTICALS
INC.
	
            	 
	
            	 
	
            	By	       	/s/ John M.
      Spinnato	 
	
            	
            	
            	Name: John M. Spinnato
	
            	
            	
            	Title: VP & General Counsel, US
      Legal
	
            	 
	
            	 
	
            	 
	
            	By	
            	/s/ Christian
      Blin	 
	
            	
            	
            	Name: Christian Blin
	
            	
            	
            	Title: VP, R&D Finance
	
            	 
	 	 
	
            	 
	
            	 
	
            	REGENERON PHARMACEUTICALS,
  INC.
	
            	 
	
            	 
	
            	By	
            	/s/ Murray
      Goldberg	 
	
            	
            	
            	Name: Murray A. Goldberg
	
            	
            	
            	Title: Senior Vice President, Finance
      &
	
            	Administration and Chief Financial
      Officer


    


    56 

     

    

    
    



    Execution Version

     

    SCHEDULE 1

     

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    SCHEDULE 2 

     

    Excluded Targets 

     

    ***************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    2

     

    

    
    



    SCHEDULE 3

     

    Initial
Immunized Target List

     

    ************************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    3

     

    

    
    



    Execution Version

     

    SCHEDULE 4

     

    Lead
Candidate Criteria

     

    ***********************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    



    Execution Version

     

    SCHEDULE 5

     

    Manufacturing
Cost

     

    ******************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    



    Execution Version

     

    SCHEDULE 6


     

    Initial Rolling Target List


     

    ***************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    



    Execution Version


     

    SCHEDULE 7


     

    Expansion Plan 

     

         Technical Appendices 1 through 4 describe the general capacity expansion
plans for Regeneron’s Rensselaer Operations in
Rensselaer, New York. The “IN” items described in appendices 1 and 2 will be initiated immediately. 
********************************************** 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    



    SCHEDULE 8

     

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    2

     

    

    
    



    Execution
Version

     

    SCHEDULE
9

     

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    Execution Version


     

    SCHEDULE 10


     

    Notices 

     

    If to Sanofi:


     

    Aventis Pharmaceuticals
Inc. 
200 Crossing Boulevard 
Bridgewater, New Jersey 08807 
United
States 
Attn: President US
Research and Development 

     

    
      	Copy:	  	Sanofi Aventis
	
            	
            	174 Avenue de France
	
            	
            	75013 Paris
	
            	
            	France
	Attn:	
            	Senior Vice President and
      General Counsel


    


    If to Regeneron:


     

    Regeneron
Pharmaceuticals, Inc. 
777 Old Saw Mill River Road 
Tarrytown, New York
10591 
Attention: President & CEO 
Copy: General Counsel 

     

    

    
    



    Execution Version


     

    EXHIBIT A


     

    Form of Opt-In Notice 

     

    [Sanofi Letterhead]


     

    [DATE] 

     

    Regeneron
Pharmaceuticals, Inc. 
777 Old Saw Mill River Road 
Tarrytown, New York
10591 
Attention: President & CEO 
Copy: General Counsel Regeneron
Pharmaceuticals, Inc. 

     

         Reference is hereby made to the Amended and Restated Discovery and
Preclinical Development Agreement (the “Discovery Agreement”) by and between
Aventis Pharmaceuticals Inc., a [ ], corporation with a principal place of
business located at
[                      
], and Regeneron Pharmaceuticals, Inc., a New York corporation with a principal
place of business located at 777 Old Saw Mill River Road, Tarrytown, New York
10591. Capitalized terms used herein shall have the defined meanings set forth
in the Discovery Agreement. 

     

         Pursuant to Section 5.4 of the Discovery Agreement, Sanofi hereby
provides this Opt-In Notice to Regeneron to license [INSERT PRODUCT CANDIDATE]
under the License and Collaboration Agreement. Effective immediately, [INSERT
PRODUCT CANDIDATE] shall be considered a Licensed Product. 

     

    
      	
            	AVENTIS PHARMACEUTICALS
INC.
	
            	


 
	
            	 	 
	
            	Name:
	
            	 
	
            	            
      Title:


    


    

    
    



    Execution Version

     

    EXHIBIT B

     

    ***************