Exhibit 10.2


 


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


 


EXECUTION VERSION


 


LICENSE AGREEMENT


 


BY AND BETWEEN


 


ELI LILLY AND COMPANY


 


AND


 


UNITED THERAPEUTICS CORPORATION


 


DATED


 


NOVEMBER 14, 2008


 

















 


TABLE OF CONTENTS


 


 


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  1 Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  “Adverse
  Event”

  	
   

  	
  1

  
	
  1.2

  	
  “Affiliate”

  	
   

  	
  2

  
	
  1.3

  	
  “Applicable
  Law”

  	
   

  	
  2

  
	
  1.4

  	
  “Business
  Day”

  	
   

  	
  2

  
	
  1.5

  	
  “Business
  Opportunity”

  	
   

  	
  2

  
	
  1.6

  	
  “Calendar
  Quarter”

  	
   

  	
  2

  
	
  1.7

  	
  “Calendar
  Year”

  	
   

  	
  2

  
	
  1.8

  	
  “Change
  of Control”

  	
   

  	
  2

  
	
  1.9

  	
  “Commercialize”

  	
   

  	
  2

  
	
  1.10

  	
  “Commercialization
  Plan”

  	
   

  	
  3

  
	
  1.11

  	
  “Commercially
  Reasonable Efforts”

  	
   

  	
  3

  
	
  1.12

  	
  “Competitive
  Product”

  	
   

  	
  3

  
	
  1.13

  	
  “Compound”

  	
   

  	
  3

  
	
  1.14

  	
  “Confidential
  Information”

  	
   

  	
  3

  
	
  1.15

  	
  “Confidentiality
  Agreement”

  	
   

  	
  3

  
	
  1.16

  	
  “Control”

  	
   

  	
  3

  
	
  1.17

  	
  “Corporate
  Marks”

  	
   

  	
  3

  
	
  1.18

  	
  “Detail”
  or “Detailing”

  	
   

  	
  3

  
	
  1.19

  	
  “Development”

  	
   

  	
  3

  
	
  1.20

  	
  “Dollar”
  or “$”

  	
   

  	
  4

  
	
  1.21

  	
  “Domain”

  	
   

  	
  4

  
	
  1.22

  	
  “Effective
  Date”

  	
   

  	
  4

  
	
  1.23

  	
  “Existing
  Patents”

  	
   

  	
  4

  
	
  1.24

  	
  “FDA”

  	
   

  	
  4

  
	
  1.25

  	
  “Field”

  	
   

  	
  4

  
	
  1.26

  	
  “GAAP”

  	
   

  	
  4

  
	
  1.27

  	
  “Glaxo
  ICOS License”

  	
   

  	
  4

  
	
  1.28

  	
  “GMP”

  	
   

  	
  4

  
	
  1.29

  	
  “ICOS”

  	
   

  	
  4

  
	
  1.30

  	
  “ICOS
  Lilly Agreements”

  	
   

  	
  4

  
	
  1.31

  	
  “Indemnitee”

  	
   

  	
  4

  
	
  1.32

  	
  “Information”

  	
   

  	
  4

  
	
  1.33

  	
  “Invention”

  	
   

  	
  5

  
	
  1.34

  	
  “JSC”
  or “Joint Steering Committee”

  	
   

  	
  5

  
	
  1.35

  	
  “Lilly
  Commercialization Activities”

  	
   

  	
  5

  
	
  1.36

  	
  “Lilly
  Know-How”

  	
   

  	
  5

  
	
  1.37

  	
  “Lilly
  Patents”

  	
   

  	
  5

  
	
  1.38

  	
  “Lilly
  Product Marks”

  	
   

  	
  5

  
	
  1.39

  	
  “Manufacturing
  and Supply Agreement”

  	
   

  	
  5

  
	
  1.40

  	
  “Net
  Sales”

  	
   

  	
  6

  
	
  1.41

  	
  “New
  Patents”

  	
   

  	
  6

  
	
  1.42

  	
  “Ongoing
  Lilly Trials”

  	
   

  	
  6

  
						



 


i

















 


	
  1.43

  	
  “Patents”

  	
   

  	
  6

  
	
  1.44

  	
  “Product”

  	
   

  	
  6

  
	
  1.45

  	
  “Promotion”
  or “Promote”

  	
   

  	
  6

  
	
  1.46

  	
  “Pulmonary
  Arterial Hypertension” or “PAH”

  	
   

  	
  7

  
	
  1.47

  	
  “Quality
  Agreement”

  	
   

  	
  7

  
	
  1.48

  	
  “Reasonable
  Cost”

  	
   

  	
  7

  
	
  1.49

  	
  “Regulatory
  Approval”

  	
   

  	
  7

  
	
  1.50

  	
  “Regulatory
  Authority”

  	
   

  	
  7

  
	
  1.51

  	
  “Regulatory
  Filings”

  	
   

  	
  7

  
	
  1.52

  	
  “Safety
  Agreement”

  	
   

  	
  7

  
	
  1.53

  	
  “Secondary
  Indication”

  	
   

  	
  7

  
	
  1.54

  	
  “Term”

  	
   

  	
  7

  
	
  1.55

  	
  “Territory”

  	
   

  	
  7

  
	
  1.56

  	
  “Third
  Party”

  	
   

  	
  7

  
	
  1.57

  	
  “United
  Therapeutics Commercialization Activities”

  	
   

  	
  7

  
	
  1.58

  	
  “United
  Therapeutics Know-How”

  	
   

  	
  8

  
	
  1.59

  	
  “United
  Therapeutics Promotional Materials”

  	
   

  	
  8

  
	
  1.60

  	
  “United
  Therapeutics Sales Representative”

  	
   

  	
  8

  
	
  1.61

  	
  “Useful”

  	
   

  	
  8

  
	
  1.62

  	
  “Valid
  Claim”

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2 Grant of Rights

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  License
  Grant to United Therapeutics

  	
   

  	
  8

  
	
  2.2

  	
  License
  Grant to Lilly

  	
   

  	
  8

  
	
  2.3

  	
  Sublicensing

  	
   

  	
  9

  
	
  2.4

  	
  Right
  of First Negotiation

  	
   

  	
  9

  
	
  2.5

  	
  Representation
  and Warranty, and Negative Covenant

  	
   

  	
  10

  
	
  2.6

  	
  Potential
  Preferred Partners

  	
   

  	
  10

  
	
  2.7

  	
  No
  Other Rights

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3 Governance

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  General

  	
   

  	
  11

  
	
  3.2

  	
  Joint
  Steering Committee

  	
   

  	
  11

  
	
  3.3

  	
  Areas
  Outside the JSC’s Authority

  	
   

  	
  13

  
	
  3.4

  	
  Operating
  Principles

  	
   

  	
  14

  
	
  3.5

  	
  Alliance
  Managers

  	
   

  	
  16

  
	
  3.6

  	
  Independence

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4 Joint Obligations and Diligence

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Conduct
  of the Parties

  	
   

  	
  17

  
	
  4.2

  	
  Commercially
  Reasonable Efforts

  	
   

  	
  17

  
	
  4.3

  	
  Initial
  Transfer of Know-How

  	
   

  	
  17

  
	
  4.4

  	
  Sharing
  of Development and Commercialization Information

  	
   

  	
  17

  
	
  4.5

  	
  Sharing
  of Market Research

  	
   

  	
  18

  



 


ii

















 


	
  4.6

  	
  Duty
  to Confer and Consult

  	
   

  	
  18

  
	
  4.7

  	
  Quality
  Agreement

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5 Development and Regulatory Activities

  	
   

  	
  18

  



 


	
  5.1

  	
  Current
  Status of Development of Product

  	
   

  	
  18

  
	
  5.2

  	
  Clinical
  Development Activities.

  	
   

  	
  18

  
	
  5.3

  	
  Regulatory
  Matters

  	
   

  	
  20

  
	
  5.4

  	
  Interactions
  with Authorities; Regulatory Inquiry, Inspection, and Audit

  	
   

  	
  23

  
	
  5.5

  	
  Drug
  Safety

  	
   

  	
  24

  
	
  5.6

  	
  Product
  Withdrawals and Recalls

  	
   

  	
  25

  
	
  5.7

  	
  Development
  Expenses

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  6 Commercialization

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Principles
  of Commercialization

  	
   

  	
  26

  
	
  6.2

  	
  Commercialization
  Plan

  	
   

  	
  27

  
	
  6.3

  	
  Commercialization
  Activities

  	
   

  	
  27

  
	
  6.4

  	
  Commercialization
  Costs

  	
   

  	
  28

  
	
  6.5

  	
  Advertising
  and Promotional Materials

  	
   

  	
  28

  
	
  6.6

  	
  United
  Therapeutics Sales Representatives

  	
   

  	
  29

  
	
  6.7

  	
  Complaints
  and Inquiries

  	
   

  	
  30

  
	
  6.8

  	
  Product
  Selling Prices

  	
   

  	
  30

  
	
  6.9

  	
  Product
  Integrity

  	
   

  	
  31

  
	
  6.10

  	
  Lilly
  Covenant Not to Compete

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  7 Payment

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Upfront
  Payment

  	
   

  	
  31

  
	
  7.2

  	
  Royalty
  Payments

  	
   

  	
  31

  
	
  7.3

  	
  Payments
  and Reports

  	
   

  	
  32

  
	
  7.4

  	
  Taxes

  	
   

  	
  32

  
	
  7.5

  	
  Wire
  Transfers

  	
   

  	
  33

  
	
  7.6

  	
  Audit
  Rights

  	
   

  	
  33

  
	
  7.7

  	
  Late
  Payments

  	
   

  	
  34

  
	
  7.8

  	
  Payments
  to United Therapeutics

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  8 Inventions and Patents

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Inventions

  	
   

  	
  34

  
	
  8.2

  	
  Patent
  Prosecution

  	
   

  	
  35

  
	
  8.3

  	
  Pediatric
  Exclusivity in the Territory

  	
   

  	
  36

  
	
  8.4

  	
  OTC
  Rights; Authorized Generic in the Territory

  	
   

  	
  36

  
	
  8.5

  	
  Infringement
  Defense

  	
   

  	
  37

  
	
  8.6

  	
  Enforcement
  of Patent Rights

  	
   

  	
  37

  
	
  8.7

  	
  Enforcement
  of Other Government-Conferred Rights

  	
   

  	
  38

  
	
  8.8

  	
  Information
  and Updates

  	
   

  	
  38

  
	
  8.9

  	
  No
  Challenges to the Lilly Patents

  	
   

  	
  39

  



 


iii

















 


	
  ARTICLE
  9 Trademark Usage and Maintenance

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
  Ownership
  of Trademarks

  	
   

  	
  39

  
	
  9.2

  	
  Lilly
  Product Marks License Grant

  	
   

  	
  39

  
	
  9.3

  	
  Use
  of the Trademarks

  	
   

  	
  39

  
	
  9.4

  	
  Quality
  Control

  	
   

  	
  40

  
	
  9.5

  	
  Use
  of Trademark Designations

  	
   

  	
  40

  
	
  9.6

  	
  Infringement
  of Lilly Product Marks

  	
   

  	
  41

  
	
  9.7

  	
  Costs

  	
   

  	
  41

  
	
  9.8

  	
  Third-Party
  Trademark Claims

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  10 Representations, Warranties, and Covenants

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  Representations,
  Warranties and Covenants

  	
   

  	
  41

  
	
  10.2

  	
  Representations
  and Warranties of Lilly

  	
   

  	
  42

  
	
  10.3

  	
  Covenant
  of United Therapeutics

  	
   

  	
  45

  
	
  10.4

  	
  Disclaimer

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  11 Confidentiality

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
  Treatment
  of Confidential Information

  	
   

  	
  45

  
	
  11.2

  	
  Exceptions

  	
   

  	
  45

  
	
  11.3

  	
  Authorized
  Disclosures

  	
   

  	
  46

  
	
  11.4

  	
  Securities
  Filings

  	
   

  	
  47

  
	
  11.5

  	
  Publicity

  	
   

  	
  47

  
	
  11.6

  	
  Publication

  	
   

  	
  47

  
	
  11.7

  	
  Patient
  Information

  	
   

  	
  48

  
	
  11.8

  	
  Confidentiality
  Agreement

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  12 Indemnification

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
  Indemnification
  by United Therapeutics

  	
   

  	
  48

  
	
  12.2

  	
  Indemnification
  by Lilly

  	
   

  	
  49

  
	
  12.3

  	
  Procedure

  	
   

  	
  49

  
	
  12.4

  	
  Insurance

  	
   

  	
  50

  
	
  12.5

  	
  No
  Consequential or Punitive Damages

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  13 Term and Termination

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
  Term

  	
   

  	
  50

  
	
  13.2

  	
  Unilateral
  Termination by United Therapeutics

  	
   

  	
  51

  
	
  13.3

  	
  Material
  Breach

  	
   

  	
  51

  
	
  13.4

  	
  Unilateral
  Termination by Lilly

  	
   

  	
  51

  
	
  13.5

  	
  Consequences
  of Expiration or Termination

  	
   

  	
  52

  
	
  13.6

  	
  Survival

  	
   

  	
  56

  
	
  13.7

  	
  No
  Waiver of Remedies

  	
   

  	
  56

  



 


iv

















 


	
  ARTICLE
  14 Dispute Resolution

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
  Disputes

  	
   

  	
  56

  
	
  14.2

  	
  Governing
  Law; Dispute Resolution

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  15 Miscellaneous

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  15.1

  	
  Entire
  Agreement

  	
   

  	
  58

  
	
  15.2

  	
  Assignment

  	
   

  	
  58

  
	
  15.3

  	
  Amendments

  	
   

  	
  59

  
	
  15.4

  	
  Bankruptcy

  	
   

  	
  59

  
	
  15.5

  	
  Non-Waiver

  	
   

  	
  59

  
	
  15.6

  	
  Severability

  	
   

  	
  59

  
	
  15.7

  	
  Notice

  	
   

  	
  59

  
	
  15.8

  	
  Further
  Assurances

  	
   

  	
  60

  
	
  15.9

  	
  Force
  Majeure

  	
   

  	
  60

  
	
  15.10

  	
  Independent
  Contractors

  	
   

  	
  61

  
	
  15.11

  	
  Performance
  by Affiliates

  	
   

  	
  61

  
	
  15.12

  	
  No
  Third Party Beneficiaries

  	
   

  	
  61

  
	
  15.13

  	
  Interpretation

  	
   

  	
  61

  
	
  15.14

  	
  Counterparts

  	
   

  	
  62

  



 


v

















 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.13

  	
   

  	
  Compound

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.37

  	
   

  	
  Lilly
  Patents

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.44

  	
   

  	
  Product

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.52

  	
   

  	
  Safety
  Agreement Table of Contents

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.1

  	
   

  	
  Ongoing
  Lilly Trials

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.2(f)

  	
   

  	
  [***]TM
  Phase IV Clinical Plan

  
	
   

  	
   

  	
   

  
	
  Exhibit 6.2

  	
   

  	
  Commercialization
  Plan

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.5

  	
   

  	
  Wire
  Instructions

  
	
   

  	
   

  	
   

  
	
  Exhibit 10.2(j)

  	
   

  	
  Encumbrances
  and Licenses

  
	
   

  	
   

  	
   

  
	
  Exhibit 10.2(k)

  	
   

  	
  Claims,
  Actions, Suits or Proceedings

  
	
   

  	
   

  	
   

  
	
  Exhibit 10.2(p)

  	
   

  	
  Alleged
  Inventor Claims, Actions, Suits or Proceedings

  
	
   

  	
   

  	
   

  
	
  Exhibit 11.5

  	
   

  	
  Press
  Release

  



 


vi

















 


LICENSE AGREEMENT


 


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


 


RECITALS


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 1


DEFINITIONS


 


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


 


1.1          “Adverse
Event” shall mean any undesirable medical occurrence in a patient or
clinical investigation subject administered a pharmaceutical product and which
does not necessarily have to have a causal relationship with the treatment,
including any variant of an “adverse drug experience” as those terms are defined
at either 21 C.F.R. Section 312.32 or 21


 


1

















 


C.F.R. Section 314.80 and the relevant
non-FDA equivalents, whether arising in or outside of a clinical study.


 


1.2          “Affiliate”
shall mean (a) an entity that owns directly or indirectly a controlling
interest in a Party, by stock ownership or otherwise, (b) any entity in
which a Party owns a controlling interest, by stock ownership or otherwise, or
(c) any entity under common control with a Party, directly or
indirectly.  Solely for purposes of the
foregoing sentence, “controlling interest” and “control” shall mean the power,
whether or not exercised, to direct the management and affairs of a Party,
directly or indirectly, whether through the ownership of voting securities, by
contract, or otherwise.  The direct or
indirect ownership of fifty percent (50%) or more of a Party’s outstanding
voting securities shall in any case be deemed to confer “control.”


 


1.3          “Applicable
Law” shall mean all laws, statutes, ordinances, codes, rules, and
regulations that have been enacted by a government authority and which are in
force as of the Effective Date or come into force during the Term, in each case
to the extent that the same are applicable to the performance by the Parties of
their respective obligations under this Agreement, including, with respect to
the United States, the Prescription Drug Marketing Act, the Federal Food, Drug
and Cosmetics Act of 1938, as amended, the Health Insurance Portability and
Accountability Act, the Federal Anti-Kickback Statute, and any applicable FDA
regulations relating to sampling practices.


 


1.4          “Business
Day” shall mean any day that is not a Saturday or a Sunday or a day
on which the New York Stock Exchange is closed.


 


1.5          “Business
Opportunity” shall have the meaning set forth in
Section 2.4(a).


 


1.6          “Calendar
Quarter” shall mean each of the three (3) month periods ending
on March 31, June 30, September 30, and December 31,
provided that the first Calendar Quarter during the Term shall commence on the
Effective Date and end on March 31, 2009.


 


1.7          “Calendar
Year” shall mean each twelve (12) month period beginning on
January 1 and ending on December 31, provided that the first Calendar
Year during the Term shall commence on the Effective Date and end on
December 31, 2009.


 


1.8          “Change of
Control” shall mean (a) the acquisition of control of United
Therapeutics by a Third Party or (b) the sale or other disposition of all
or substantially all of the assets of United Therapeutics to a Third
Party.  Solely for purposes of the
foregoing sentence, “control” shall mean the power whether or not exercised, to
direct the management and affairs of United Therapeutics, directly or
indirectly, whether through the ownership of voting securities, by contract, or
otherwise.  The direct or indirect
ownership of fifty percent (50%) or more of United Therapeutics’ outstanding
voting securities shall in any case be deemed to confer “control.”


 


1.9          “Commercialize”
(and, with correlative meanings, the terms “Commercializing”
and “Commercialization”) shall
mean any and all activities relating to the commercialization of the Product,
including the Promotion, Detailing, distribution, sale, offer for
sale, and importation of the
Product after Regulatory Approval of the Product, excluding any and all
manufacturing of the Product.


 


2

















 


1.10        “Commercialization
Plan” shall have the meaning set forth in Section 6.2.


 


1.11        “Commercially
Reasonable Efforts” shall mean with respect to each Party,
commercially reasonable efforts in accordance with the business, legal, medical
and scientific judgment of a similarly situated company, and in accordance with
the efforts and resources a similarly situated company would use for a product
owned by it or to which it has rights, which is of similar market potential, at
a similar stage in its product life, taking into account the competitiveness of
the marketplace, the proprietary position of the product, the regulatory
structure involved, the profitability of the product and other relevant
factors.


 


1.12        “Competitive
Product” shall mean any phosphodiesterase 5 inhibitor.


 


1.13        “Compound”
shall mean the bulk active pharmaceutical ingredient tadalafil as set forth on
Exhibit 1.13.


 


1.14        “Confidential
Information” of a Party shall mean all Information disclosed by such
Party to the other Party during the Term, including any and all Information
exchanged between the Parties under the Manufacturing and Supply Agreement or
the Confidentiality Agreement.


 


1.15        “Confidentiality
Agreement” shall mean the Confidentiality Agreement between the
Parties effective February 25, 2008.


 


1.16        “Control”
shall mean, with respect to any information or intellectual property right,
possession by a Party of the ability (whether by ownership, license, or
otherwise) to grant access, a license, or a sublicense to such information or
intellectual property right without violating the terms of any agreement or
other arrangement with any Third Party as of the time such Party would first be
required hereunder to grant the other Party such access, license or sublicense.


 


1.17        “Corporate
Marks” shall mean, with respect to each of the Parties, the
corporate name of such Party or those of Affiliates of such Party, and its and
their trade names, trademarks, service marks, domain names, and associated
logos and designs; provided that Corporate Marks shall not include the Lilly Product
Marks.


 


1.18        “Detail”
or “Detailing” shall mean, with
respect to Promotion of the Product in the Field in the Territory under the
Commercialization Plan, the activity undertaken by a United Therapeutics Sales
Representative with respect to a target physician or other individuals or
entities with prescribing authority involved or potentially involved in
prescribing the Product, to provide information about the benefits and features
of the Product in an effort to increase the number of physicians or other
individuals or entities with prescribing authority prescribing the Product,
and/or the number of prescriptions for the Product.


 


1.19        “Development”
(and, with correlative meanings, the terms “Develop”
and “Developing”) shall mean the
clinical development, and regulatory activities with respect to seeking
Regulatory Approval of the Product for any indication in the Field in the Territory,
and post-approval studies, including label extensions in support of the Product
in the Field in the


 


3
















 


Territory and any studies required by a Regulatory Authority, and
excluding any and all manufacturing of the Product.


 


1.20                        “Dollar” or “$” shall mean the legal tender of the United States of
America.


 


1.21                        “Domain” shall mean, with respect to United
Therapeutics, the Product in the Field in the Territory, and, with respect to
Lilly, products containing the Compound outside the Field in the Territory, and
in all fields outside the Territory.


 


1.22                        “Effective Date” shall mean the Closing Date
as defined in the Stock Purchase Agreement.


 


1.23                        “Existing Patents”  shall have the meaning set forth in Section 8.2(c).


 


1.24                        “FDA” shall mean the United States Food and
Drug Administration, or any successor organization.


 


1.25                        “Field” shall mean the treatment, amelioration,
and prevention of any and all forms of pulmonary hypertension in humans,
including (a) all WHO classifications of pulmonary hypertension in the
Venice 2003 Revised Classification system and (b) all forms of pulmonary
hypertension secondary to other indications.


 


1.26                        “GAAP” shall mean generally accepted
accounting principles in the United States, consistently applied.


 


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


 


1.28                        “GMP” shall mean the current Good
Manufacturing Practices of the FDA, as then in effect.


 


1.29                        “ICOS”
shall mean ICOS Corporation.


 


1.30                        “ICOS Lilly Agreements” shall mean the
Research and Development Service Agreement dated September 30, 1998
between Lilly, and Lilly ICOS LLC, and the Marketing and Sales Service
Agreement dated as of September 30, 1998 as amended and restated as January 1, 2003 between Lilly
and ICOS (assigned to ICOS Technology Services LLC).


 


1.31                        “Indemnitee” shall mean, with respect to a
Party, such Party and its Affiliates, and their respective directors, officers,
employees, agents, contractors and licensees.


 


1.32                        “Information” shall mean (a) technical
or economic information, techniques and data relating to the research,
non-clinical development, Development, manufacture, use or Commercialization of
the Product, including inventions, practices, methods, knowledge, know-how,
skills, experience, test data, including pharmacological, toxicological,
preclinical and clinical test data, results, protocols including data relating
to Product safety, test data,


 


4

















 


formulations, specifications, analytical and quality control data, regulatory strategies, regulatory
submissions, correspondence and communications, marketing, pricing,
distribution, cost, sales, manufacturing, patent and legal data or descriptions,
and strategies for the research, non-clinical development, Development,
manufacture, use or Commercialization of the Product and (b) compositions
of matter, devices, articles of manufacture, assays and biological, chemical or
physical materials relating to research, non-clinical development, Development,
manufacture, use or Commercialization of the Product.


 


1.33                        “Invention” shall mean any invention or
discovery, whether or not patentable, made as a result of the activities of a
Party or the Parties pursuant to this Agreement performed after the Effective
Date that is necessary or useful in the research, non-clinical development,
Development, manufacture, use, or Commercialization of the Product.


 


1.34                        “JSC” or “Joint
Steering Committee” shall have the meaning set forth in Section 3.1.


 


1.35                        “Lilly Commercialization Activities” shall
have the meaning set forth in Section 6.3(c).


 


1.36                        “Lilly Know-How” shall mean all Information
that (a) is Controlled by Lilly at any time during the Term and (b) is
necessary or useful in the research, non-clinical development, Development, use
or Commercialization of the Product. 
Notwithstanding anything herein to the contrary, Lilly Know-How shall
exclude Lilly Patents, Lilly’s Corporate Marks and Lilly Product Marks.


 


1.37                        “Lilly Patents” shall mean all Patents that
cover the composition or method of using the Product in the Field in the
Territory that are Controlled by Lilly at any time during the Term.  As of the Execution Date, the Lilly Patents are
as set forth on Exhibit 1.37.


 


1.38                        “Lilly Product Marks” shall mean the
certain, separate Lilly brand name to be used in connection with marketing and
sale of the Product in the Field, distinct from the brand name Cialis®,
anticipated as of the Execution Date to be [***]TM, and all other
trademarks used or intended for use by Lilly or its Affiliates during the Term
in connection with the marketing or sale of the Product in the Field in the
Territory, or intended for use by United Therapeutics or its Affiliates during the
Term in connection with the marketing or sale of the Product in the Field in
the Territory, and approved by Lilly (which approval shall not be unreasonably
withheld), other than Corporate Marks of Lilly and the Corporate Marks of
United Therapeutics.


 


1.39                        “Manufacturing and Supply Agreement” shall
mean that certain Manufacturing and Supply Agreement entered into by Lilly, an
Affiliate of Lilly and United Therapeutics of even date herewith, pursuant to
which Lilly has agreed to supply to United Therapeutics, and United
Therapeutics has agreed to purchase from Lilly, all of United Therapeutics’
requirements for the Product, subject to, and in accordance with, the terms and
conditions set forth in this Agreement and such Manufacturing and Supply
Agreement.


 


5

















 


1.40                        “Net Sales” shall mean the amount billed for
sales of the Product by United Therapeutics, any Affiliate of United
Therapeutics, and any sublicensee of United Therapeutics or an Affiliate of
United Therapeutics to Third Parties, less:


 


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


 


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


 


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


 


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


 


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


 


1.41                        “New Patents” shall have the meaning set
forth in Section 8.2(a).


 


1.42                        “Ongoing Lilly Trials” shall have the
meaning set forth in Section 5.1.


 


1.43                        “Patents” shall mean (a) unexpired
letters patent (including inventor’s certificates) in the Territory that have
not been held invalid or unenforceable by a court of competent jurisdiction
from which no appeal can be taken or has been taken within the required time
period, including any substitution, extension, term restoration, registration,
confirmation, reissue, re-examination, renewal or any like filing thereof and (b) pending
applications for letters patent in the Territory, including any continuation,
division or continuation-in-part thereof and any provisional applications, in
each case, so long as such application is being diligently prosecuted.


 


1.44                        “Product” shall mean that prescription
pharmaceutical product, the active ingredient of which is the Compound, in
finished form and formulation, as further described on Exhibit 1.44, which
may be modified from time to time in accordance with the Manufacturing and
Supply Agreement.


 


1.45                        “Promotion” or “Promote” shall mean the marketing and advertising of the
Product in the Field in the Territory in accordance with the Commercialization
Plan, including medical education, information and communication, market
development and medical liaison activities.


 


6

















 


1.46                        “Pulmonary Arterial Hypertension”  or  “PAH” shall mean all WHO classifications of
pulmonary arterial hypertension identified in the Venice 2003 Revised
Classification system.


 


1.47                        “Quality Agreement” has the meaning set
forth in Section 4.7.


 


1.48                        “Reasonable Cost” shall mean, with respect
to a Party, the reasonable costs and expenses (including full time equivalent
costs and Third Party costs) as then calculated, from time to time, by such
Party for its internal accounting purposes, such calculation performed
consistently with the practice across such Party’s organization.  In any circumstance where Reasonable Costs
are expected to exceed one hundred thousand Dollars, the Parties will develop a
budget for such circumstance and agree upon a full time equivalent rate that is
appropriate for such circumstance.


 


1.49                        “Regulatory Approval” shall mean any
approvals, licenses, registrations or authorizations of any Regulatory
Authority, whether or not conditional, that are necessary for the commercial
sale of the Product in the Field in the Territory and obtained as a result of
activities under this Agreement.


 


1.50                        “Regulatory Authority” shall mean any and
all supranational, national, or regional, state, provincial or other local
government, court, governmental agency, authority, board, bureau,
instrumentality, regulatory agency, department, bureau, commission, council or
other government entity, whose approval or authorization is necessary for, or
to whom notice must be given prior to, the Development, manufacture, use or
Commercialization of the Product in the Territory or the designation of the
Product as an orphan drug (or equivalent designation) in the Territory,
including, with respect to the United States, the FDA.


 


1.51                        “Regulatory Filings” shall mean all
applications, filings, dossiers and the like (excluding routine Adverse Event
expedited or periodic reporting), submitted to a Regulatory Authority in the
Territory for the purpose of obtaining Regulatory Approval from that Regulatory
Authority in the Territory, but do not include submission of promotional
materials to Division of Drug Marketing, Advertising, and Communications of the
FDA (DDMAC).


 


1.52                        “Safety Agreement” shall have the meaning
set forth in Section 5.5(a).  An
example of the table of contents of a Safety Agreement is attached hereto as Exhibit 1.52.


 


1.53                        “Secondary Indication” shall mean any
indication in the Field other than PAH.


 


1.54                        “Term” shall have the meaning set forth in Section 13.1.


 


1.55                        “Territory” shall mean the United States of
America and Puerto Rico, and United States of America-based Department of
Defense and/or Department of Veterans Affairs depots to the extent that such
agencies purchase Product in the United States.


 


1.56                        “Third Party” shall mean any entity other
than a Party or its Affiliates.


 


1.57                        “United Therapeutics Commercialization Activities”
shall have the meaning set forth in Section 6.3(a).


 


7

















 


1.58                        “United Therapeutics Know-How” shall mean
Information, including any and all protocols for conducting preclinical and
clinical studies and data and results obtained from such preclinical and
clinical studies, including data relating to Product safety, that (a) is
within the Control of United Therapeutics at any time during the Term, and (b) is
necessary or useful in the research, non-clinical development, Development,
manufacture, use, or Commercialization of the Product.


 


1.59                        “United Therapeutics Promotional Materials”
shall have the meaning set forth in Section 6.5(a).


 


1.60                        “United Therapeutics Sales Representative”
shall mean an employee of United Therapeutics or its permitted contractors and a
member of United Therapeutics’ sales force engaged in the conduct of Details of
the Product and trained as provided under this Agreement and the
Commercialization Plan.


 


1.61                        “Useful” shall mean, with respect to United
Therapeutics, reasonably likely to be necessary or materially useful in the
Development or Commercialization of the Product in United Therapeutics’ Domain,
and, with respect to Lilly, reasonably likely to be necessary or materially
useful in the Development, manufacture or Commercialization of products
containing the Compound in Lilly’s Domain.


 


1.62                        “Valid Claim” shall mean a claim within a
Lilly Patent that has not expired, lapsed, or been cancelled or abandoned, and
that has not been dedicated to the public, disclaimed, or held unenforceable,
invalid, or been cancelled by a court or administrative agency of competent
jurisdiction in an order or decision from which no appeal has been or can be
taken, including through opposition, re-examination, reissue, or disclaimer.


 


ARTICLE 2


GRANT OF RIGHTS


 


2.1                               License
Grant to United Therapeutics. 
Subject to the terms and conditions of this Agreement, Lilly hereby
grants to United Therapeutics an exclusive (even as to Lilly), non-transferable
(subject to Sections 2.3 and 15.2), sublicenseable (subject to Section 2.3)
license, under the Lilly Know-How and the Lilly Patents, to Develop and
Commercialize the Product in the Field in the Territory during the Term.  Notwithstanding the foregoing, Lilly may
conduct research and other development activities with the Compound including,
in connection with Lilly’s Development, manufacture and Commercialization of
the Product in Lilly’s Domain; provided that Lilly shall not have the right to
conduct any clinical study of the Product in the Field in the Territory, other
than the Ongoing Lilly Trials, without the prior written consent of United
Therapeutics.


 


2.2                               License
Grant to Lilly.  Subject to the terms
and conditions of this Agreement, United Therapeutics hereby grants to Lilly,
under any and all United Therapeutics Know-How, a royalty-free, non-exclusive,
sublicenseable license to:


 


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


 


8

















 


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


 


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


 


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


 


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


 


2.3                               Sublicensing.


 


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


 


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


 


2.4                               Right
of First Negotiation.


 


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


 


9

















 


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


 


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


 


2.5                               Representation
and Warranty, and Negative Covenant.


 


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


 


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


 


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


 


2.6                               Potential
Preferred Partners.  Each Party sees
potential value in the other Party as a possible route to market for future
products in the other Party’s area of experience and expertise. In furtherance
thereof, from time to time, Lilly may disclose to United Therapeutics certain
opportunities available to Lilly for products for orphan indications, and
United Therapeutics may disclose to Lilly certain opportunities available to
United Therapeutics for products in Lilly’s area of expertise, and in either
case, if so disclosed, the Parties may choose to discuss the development and
commercialization of such opportunities with each other.  In order to implement the objectives under
this Section 2.6, the Parties anticipate that, on each anniversary of the
Execution Date, the CEO of United Therapeutics and the Senior Vice President of
Corporate Strategy and Policy of Lilly, or their designees, shall meet at a
mutually


 


10

















 


agreeable location in New York City to review one or two potential
strategic development and commercialization opportunities from each Party.  Notwithstanding anything to the contrary,
this Section 2.6 creates and imposes no binding obligation on either Party
with respect to the development or commercialization of any future product
opportunities.


 


2.7                               No
Other Rights.


 


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


 


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


 


ARTICLE 3


GOVERNANCE


 


3.1                               General.  The Parties desire to establish a joint
steering committee (the “Joint Steering
Committee” or “JSC”),
which shall oversee the Parties’ activities under this Agreement and facilitate
communications between the Parties with respect to the manufacture and supply
of the Product for use, and the Development and Commercialization of the
Product, in the Field in the Territory under this Agreement.


 


3.2                               Joint
Steering Committee.


 


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


 


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


 


11

















 


(i)                                    monitor
progress of the Development of the Product in the Field in the Territory,
including the Ongoing Lilly Trials;


 


(ii)                                review
and, as further described in Section 6.2, comment upon the Commercialization
Plan, and all updates or amendments thereto;


 


(iii)                            review
and comment upon plans for Development of the Product in the Field, including
clinical trial protocols, monitoring plans, and data disclosure plans included
with each such protocol, and all updates or amendments thereto;


 


(iv)                               review
any and all clinical trials, including audit plans with respect thereto,
conducted by United Therapeutics with respect to the Product in the Field in
the Territory and conducted by Lilly with respect to the Ongoing Lilly Trials;


 


(v)                                   review
any and all audit reports and action plans with respect thereto provided by
United Therapeutics pursuant to Section 5.2(d);


 


(vi)                               review
confirmation of United Therapeutics’ completion of any monitoring and quality
oversight actions required to be taken pursuant to this Agreement;


 


(vii)                           review
any serious and/or persistent site non-compliance issues that affect patient
safety and/or data integrity along with the corrective action plan, each to the
extent regarding the Product in the Field in the Territory;


 


(viii)                       facilitate
the flow of information with respect to the Commercialization of the Product in
the Field in the Territory by United Therapeutics and Commercialization of the
Product in the Field outside the Territory by Lilly, where such information is
Useful to the other Party;


 


(ix)                              facilitate
mechanisms for discussion between the Parties with respect to submission of
Regulatory Filings for the Product in the Field in the Territory, including
processes for preparing Regulatory Filings for the Product in the Field in the
Territory consistent with Lilly’s standard operating procedures;


 


(x)                                  facilitate
mechanisms for discussion between the Parties with respect to Development of
the Product in the Field, including the contents and submission of Regulatory
Filings, to the extent such Development and such Regulatory Filings are Useful
to United Therapeutics or to Lilly;


 


(xi)                              facilitate
communication between the Parties with respect to all serious adverse events or
significant safety issues for products which contain the Compound in all fields
throughout the world to the extent such information is Useful to United
Therapeutics or to Lilly, consistent with the terms of the Safety Agreement and
coordinate efforts of the Parties to ensure proper reporting of all Adverse
Events for the Product in the Field in the Territory in accordance with
Applicable Law and consistent with the terms of the Safety Agreement;


 


12

















 


(xii)                          facilitate
the flow of information with respect to any material new studies of which
either Party becomes aware which relate to the Product in the Field (whether
inside or outside of the Territory);


 


(xiii)                      facilitate
the flow of publicly available information with respect to any material studies
of which either Party becomes aware which relate to any Competitive Product
controlled by a Third Party in the Field throughout the world, in either case
to the extent such information is Useful to United Therapeutics or to Lilly;


 


(xiv)                         facilitate
the flow of information with respect to any material studies being conducted by
Lilly which relate to products which contain the Compound outside the Field
throughout the world, to the extent such information would be reasonably likely
to materially adversely affect the Product in United Therapeutics’ Domain;


 


(xv)                             implement
policies and procedures for providing United Therapeutics with copies of all
correspondence and communications with Regulatory Authorities relating to
products which contain the Compound in PAH, and in the event that United
Therapeutics pursues any Secondary Indication with the approval of Lilly  as described in Section 5.2(i), such
Secondary Indication, to the extent such correspondence and communications are
Useful to United Therapeutics;


 


(xvi)                         implement
policies and procedures for providing United Therapeutics with updates
regarding all correspondence and communications with Regulatory Authorities
relating to products which contain the Compound in all fields throughout the
world other than PAH, and in the event that United Therapeutics pursues any
Secondary Indication with the approval of Lilly as described in Section 5.2(i),
such Secondary Indication, to the extent such correspondence and communications
are reasonably likely to materially adversely affect the Product;


 


(xvii)                     coordinate
the availability, timing, and amount of placebo to be supplied by Lilly to
United Therapeutics for the Development of the Product in the Field in the
Territory and for supply of the Product in the Field in the Territory, and
procedures for forecasting and ordering such placebo and Product pursuant to
the Manufacturing and Supply Agreement;


 


(xviii)                 monitor Lilly’s
manufacturing capacity for the Product for use in the Field in the Territory
pursuant to the Manufacturing and Supply Agreement;


 


(xix)                        establish
subcommittees as needed to address issues in the Development and
Commercialization of the Product in the Field in the Territory, and address
disputes or disagreements arising in any subcommittee so established; and


 


(xx)                            perform
such other functions as the Parties may agree in writing.


 


3.3                               Areas
Outside the JSC’s Authority.  The JSC
shall have no authority other than that expressly set forth in Section 3.2,
and, except as expressly stated therein, shall have no authority with respect
to any action or decision relating to Lilly’s Domain, or the manufacture of


 


13
















 


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


 


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


 


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


 


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


 


(c)                  Decision Making. The JSC is an advisory body only, and
the rights and authorities of the Parties are set forth in this Agreement,
including Section 3.4(c)(ii) and 3.4(c)(iii). The Parties shall use
Commercially Reasonable Efforts to cause their respective members of the JSC to
act in good faith and cooperate with one another. Any disagreement between the
Parties shall be first submitted to the Alliance Managers in order to
facilitate a resolution and then, if not resolved, at the election of either
Party, be referred for resolution pursuant to ARTICLE 14.  Notwithstanding the foregoing, each Party has
final decision-making authority with respect to certain matters pursuant to
3.4(c)(ii) and 3.4(c)(iii), and no decision made in accordance with such
final decision-making authority shall be subject to any dispute resolution
mechanism or procedure under ARTICLE 14. 
Notwithstanding anything else in this Agreement or the Manufacturing and
Supply Agreement, in no event shall either Party exercise its final
decision-making authority in a manner that would have the effect of modifying,
or would


 


14

















 


otherwise be in conflict with, the terms of this Agreement or the
Manufacturing and Supply Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


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


 


3.5                               Alliance
Managers.


 


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


 


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


 


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


 


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


 


16

















 


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


 


ARTICLE 4


JOINT OBLIGATIONS AND DILIGENCE


 


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


 


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


 


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


 


4.4                               Sharing
of Development and Commercialization Information


 


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


 


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


 


17

















 


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


 


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


 


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


 


ARTICLE 5


DEVELOPMENT AND REGULATORY ACTIVITIES


 


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


 


5.2                               Clinical
Development Activities.


 


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


 


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


 


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


 


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


 


18

















 


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


 


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


 


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


 


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


 


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


 


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


 


19

















 


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


 


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


 


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


 


5.3                               Regulatory
Matters.


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


22

















 


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


 


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


 


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


 


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


 


23
















 


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


 


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


 


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


 


5.5          Drug Safety.


 


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


 


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


 


24

















 


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


 


5.6          Product
Withdrawals and Recalls.  In
the event that (a) an event, incident, or circumstance has occurred which
may result in the need for a recall or other removal of the Product or any lot
or lots thereof from the market in the Field in the Territory; (b) any
Regulatory Authority in the Territory threatens or initiates any action to
remove the Product from the market in the Field in the Territory; or (c) any
Regulatory Authority in the Territory requires distribution of a “Dear Doctor”
letter or its equivalent, regarding use of the Product in the Field in the
Territory, Lilly shall promptly advise United Therapeutics in writing with
respect thereto, and shall provide to United Therapeutics copies of all
relevant correspondence, notices, and any other related documents.  Unless otherwise agreed by the Parties, Lilly
shall be responsible for conducting the recall. 
No recall shall be commenced in the Territory without Lilly’s prior
written consent, such consent not to be unreasonably withheld.  United Therapeutics shall, upon reasonable
request by Lilly assist Lilly in the conduct of any such recall or withdrawal
in the Territory, which recall or withdrawal shall be controlled by Lilly in
Lilly’s sole discretion.  Each Party will
cooperate with the other Party in the performance of any recall or withdrawal.
To the extent any recall of the Product is implemented as a result of Lilly’s
fault or negligence, in addition to any obligations under ARTICLE 12, Lilly
shall (i) bear all of Lilly’s costs and all Reasonable Costs incurred by
United Therapeutics in connection with such recall and (ii) either, at its
sole option, replace or credit United Therapeutics for the cost of the relevant
lots of the Product subject to the recall.  For any and all recalls of the Product in the
Field in the Territory required to the extent due to any other reason, United
Therapeutics shall bear all of United Therapeutics’ costs and Lilly’s
Reasonable Costs incurred in connection with such recall.


 


5.7          Development Expenses.  As between Lilly and United Therapeutics:


 


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


 


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


 


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


 


25

















 


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


 


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


 


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


 


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


 


ARTICLE
6


COMMERCIALIZATION


 


6.1          Principles
of Commercialization.  The
Parties intend to Commercialize the Product in the Field in the Territory as
set forth in this ARTICLE 6.  Initially,
the Parties intend to Develop and Commercialize the Product for PAH in the
Territory but, if United Therapeutics requests that Development and
Commercialization be pursued in any Secondary Indication, and Lilly approves
such Development and Commercialization as described in Section 5.2(i), the
Parties may seek to obtain Regulatory Approvals under this Agreement for one or
more Secondary Indications within the Territory.  Lilly shall manufacture and supply the
Product for such Development and Commercialization pursuant to the
Manufacturing and Supply Agreement.  Each
Party shall appoint a representative to be such Party’s single point of contact
to facilitate information flow between the Parties relating to each Party’s
experience and relationships in such Party’s Domain to assist the other Party
in the other Party’s Domain.  Each Party
shall first address any communications relating to Commercialization to such
representatives unless otherwise agreed to by the Parties on a case-by-case
basis.   Such representatives shall,
without limitation, coordinate direct involvement or meetings with subject
matter experts within each Party’s internal organization and/or its field
account management 


 


26

















 


organization.  Notwithstanding
the foregoing, Lilly’s representative shall not be required to provide details
relating to any customer specific transaction or agreement.


 


6.2          Commercialization
Plan.  All
Commercialization of the Product in the Field in the Territory shall be
conducted pursuant to a commercialization plan, which shall set forth the plan
for the Detailing and Promotion of the Product in the Field in the Territory in
accordance with Applicable Laws and the activities to be carried out related
thereto (the “Commercialization Plan”).  The Parties have agreed upon a high-level
outline of the Commercialization Plan, as further described on Exhibit 6.2.  No later than ninety (90) days after the
Effective Date, and prior to January 1 of each and every Calendar Year
after the first Calendar Year, United Therapeutics shall submit to the JSC for
review an updated Commercialization Plan. 
For purposes of clarification, after submission of the first updated
Commercialization Plan and not later than ninety (90) days after the Effective
Date, United Therapeutics shall submit the first annual updated
Commercialization Plan to the JSC prior to the start of the second Calendar
Year (i.e., prior to January 1, 2010). 
If Lilly determines that such updated Commercialization Plan does not
comply with Applicable Laws, including laws relating to promotional and
advertising materials as well as accepted industry standards and Lilly’s
ethical policies, in each case with respect to the Product in the Field in the
Territory, or that the activities conducted under such updated
Commercialization Plan are reasonably
likely to materially adversely affect products in Lilly’s Domain, Lilly
shall be permitted to propose, in good faith, revisions to such updated
Commercialization Plan, and United Therapeutics shall revise such
Commercialization Plan. In the event of any inconsistency between the
Commercialization Plan and this Agreement, the terms of this Agreement shall
prevail.


 


6.3          Commercialization Activities.


 


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


 


(b)           Compensation for Sales Outside the
Field.


 


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


 


27

















 


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


 


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


 


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


 


6.4          Commercialization
Costs.  United
Therapeutics shall bear all costs and expenses incurred by United Therapeutics
in connection with the United Therapeutics Commercialization Activities.  Lilly has no obligation to conduct any
Commercialization activities other than the Lilly Commercialization Activities
set forth in Section 6.3(c).  If
Lilly agrees to conduct any Commercialization activities requested by United
Therapeutics other than the Lilly Commercialization Activities set forth in Section 6.3(c),
United Therapeutics shall reimburse Lilly’s Reasonable Costs in connection with
such Lilly Commercialization Activities in accordance with a budget to be
agreed upon by the Parties.


 


6.5          Advertising and Promotional Materials.


 


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


 


28

















 


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


 


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


 


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


 


6.6          United Therapeutics Sales
Representatives.


 


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


 


29

















 


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


 


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


 


6.7          Complaints and Inquiries.  The Parties shall mutually develop a protocol,
under the Quality Agreement, for responding to any and all complaints, medical
questions, or other inquiries relating to the Product in the Field in the
Territory, which are directed to such Parties’ respective sales representatives.  All United Therapeutics Sales Representatives
will be instructed to direct complaints, medical questions, or other inquiries
regarding appropriate uses of the Product in the Field in the Territory to the
call center established pursuant to Section 6.3(a)(ii).  United Therapeutics shall be responsible for
responding to complaints, medical questions, or other inquiries relating to the
United Therapeutics Commercialization Activities and Lilly shall be responsible
for responding to all other complaints, medical questions, or other inquiries;
provided, however, that Lilly shall in any event inform United Therapeutics of
any complaints, medical questions, or other inquiries (or issues related
thereto) that would materially affect United Therapeutics’ rights or
obligations under this Agreement.  Each
Party shall notify the other Party of, and provide all pertinent information in
the notifying Party’s possession relating to, any and all suspected or actual
tampering, counterfeiting, or contamination or other similar problems with
respect to the Product in the Field in the Territory or products containing the
Compound in the  Field in any territory.


 


6.8          Product
Selling Prices. 
Lilly shall set the list price for the Product for use in the Field in
the Territory, and shall be responsible for any changes to such list price;
provided that the list price for the [***] ([***]) milligram dose of the
Product will be on parity with, and not, when considered in the aggregate, less
than Lilly’s pricing for the [***] ([***]) milligram dose of Cialis® in the
Territory.  Lilly will provide United
Therapeutics pricing parameters for the 
[***] ([***]) milligram dose of the Product for use in the Field in the
Territory, including a schedule of permitted discounts and rebates, and net
effective selling prices, all of which shall be on parity with, and not, when
considered in the aggregate, less than Lilly’s pricing parameters for the [***]
([***]) milligram dose of Cialis® in the Territory, and shall update and/or
revise such parameters at least on an annual basis, which will remain in effect
during the period covered by such update and/or revision; provided that United
Therapeutics will control the NDC number for the Product and shall be
responsible for any and all reports required to be submitted to government
authorities under Applicable Law.  Lilly
shall consider in good faith any input provided by United Therapeutics
regarding the list price, and such pricing parameters, with


 


30

















 


respect to the Product in the Field in the Territory.  United Therapeutics shall be responsible for
administering its own discount and rebate systems; provided that such systems
are consistent with the schedule of permitted discounts and rebates provided to
United Therapeutics by Lilly.  At such
time that there ceases to be a Valid Claim covering the Commercialization of
the Product in the Field in the Territory and there is no government-conferred
exclusivity respecting the use
of the Product in the Field in the Territory, then United Therapeutics shall
have the right to set the price and pricing parameters for a generic version of
the Product.


 


6.9          Product Integrity.


 


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


 


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


 


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


 


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


 


6.10        Lilly
Covenant Not to Compete.  Lilly hereby covenants and agrees, and shall
cause its Affiliates to agree, not to, in whole or in part, Commercialize any
Competitive Product in the Field in the Territory during the Term, directly for
themselves or by a Third Party, licensee or sublicensee.


 


ARTICLE
7


PAYMENT


 


7.1          Upfront
Payment.  In
consideration for the rights granted to United Therapeutics under this
Agreement, United Therapeutics, within ten (10) days after the Effective
Date, shall pay to Lilly a one-time-only, nonrefundable, non-creditable payment
of Twenty-Five Million Dollars ($25,000,000).


 


7.2          Royalty
Payments.  In
consideration for the rights granted to United Therapeutics under this
Agreement and the supply of the Product under the Manufacturing and


 


31

















 


Supply Agreement, United Therapeutics shall pay Lilly a royalty in an
amount equal to five percent (5%) of Net Sales. 
In the event United Therapeutics receives any non-monetary consideration
in connection with the sale of the Product, United Therapeutics’ payment
obligation under this Section 7.2 shall be based on the fair market value
of such other consideration.  In such
case, United Therapeutics shall disclose to Lilly the terms of any such
arrangement, and the Parties shall endeavor in good faith to agree on the fair
market value of the consideration received by United Therapeutics under such
arrangement. If Lilly’s obligation to pay royalties under the Glaxo ICOS
License terminates or is reduced, the obligation to pay royalties under this
Agreement shall likewise terminate or be so reduced.


 


7.3          Payments and Reports.


 


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


 


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


 


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


 


7.4          Taxes.
 The Parties
acknowledge and agree that it is their mutual objective and intent to minimize,
to the extent feasible, taxes payable with respect to the payment under Section 7.1
and that they shall use their best efforts to cooperate and coordinate with
each other to achieve such objective.  If
Applicable Law requires that taxes be deducted and withheld from such payment,
including taxes imposed on United Therapeutics as a result of making any
payment to an Affiliate of Lilly instead of to Lilly, United Therapeutics shall
(a) deduct those taxes from the payment; (b) pay the taxes to the
proper taxing authority; and (c) send evidence of the obligation together
with proof of payment to Lilly within sixty (60) days following that payment.


 


32

















 


7.5          Wire
Transfers.  All
payments hereunder shall be made to Lilly by bank wire transfer in immediately
available funds to Lilly in accordance with the wire instructions set forth in Exhibit 7.5,
which may be changed by written notice to United Therapeutics in accordance
with Section 15.7.


 


7.6          Audit Rights.


 


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


 


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


 


33
















 


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


 


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


 


7.7                               Late
Payments.  Subject to the terms of
this Agreement, payments not made to Lilly within the time period set forth in
this ARTICLE 7 shall bear interest at a rate of two percent (2%) per month or
the highest rate allowed under Applicable Law, whichever is lower, until paid
in full.  The payment of such interest
shall not limit Lilly from exercising any other rights it may have as a
consequence of the lateness of any payment.


 


7.8                               Payments
to United Therapeutics.  Pursuant to
the terms and conditions of Sections 5.7(c) and 5.7(e), Lilly will have
payment obligations to United Therapeutics relating to the sharing and
reimbursement of certain costs and expenses of United Therapeutics.  As a consequence, the Parties intend for
United Therapeutics to have the same rights with respect of the payments owed
by Lilly to United Therapeutics as Lilly has with respect to the payments owed
by United Therapeutics to Lilly under Sections 7.3(a), 7.4, 7.5 and 7.7, mutatis mutandis, except that the wire
instructions to United Therapeutics shall be as set forth in Exhibit 7.8.


 


ARTICLE 8


INVENTIONS AND
PATENTS


 


8.1                               Inventions.


 


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


 


34

















 


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


 


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


 


8.2                               Patent
Prosecution.


 


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


 


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


 


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


 


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


 


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


 


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


 


8.3                               Pediatric
Exclusivity in the Territory.  Lilly
shall have the right, but not an obligation, to apply for, obtain and maintain
any Pediatric Exclusivity or any other government-conferred exclusivity
available with respect to the Product in the Field in the Territory and, at its
discretion, shall act with reasonable promptness in light of the stage of
Development of the Product to apply for any such government-conferred
exclusivity so long as such application is not reasonably likely to materially adversely
affect Lilly’s Domain.  United
Therapeutics shall cooperate reasonably with Lilly in making such filings or
actions.  For the purposes of this Section 8.3,
“Pediatric Exclusivity” means the
additional six (6) months of exclusivity extension provided under the Food
and Drug Administration Modernization Act of 1997, section 505A of the Federal
Food, Drug and Cosmetic Act (21 U.S.C. § 355(a)), or any replacement
thereto.  For purposes of clarification,
however, Lilly, in its sole discretion, shall have the right to seek any
government-conferred exclusivity available with respect to products containing
the Compound, whether or not such exclusivity is based on PAH.


 


8.4                               OTC
Rights; Authorized Generic in the Territory.


 


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


 


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


 


36

















 


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


 


8.5                               Infringement
Defense.


 


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


 


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


 


8.6                               Enforcement
of Patent Rights.


 


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


 


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


 


37

















 


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


 


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


 


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


 


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


 


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


 


8.7                               Enforcement
of Other Government-Conferred Rights.  If either Party becomes aware of any Third
Party activity in the Territory that is in violation of government-conferred
exclusivity (e.g., an Orphan Drug designation, Patent Term Extension and/or
Pediatric Exclusivity) with respect to the Product, then that Party shall give
prompt written notice to the other Party within five (5) Business Days
after gaining knowledge of such infringement or violation.  Lilly shall use Commercially Reasonable
Efforts to institute, prosecute, and control any action or proceeding with
respect to such government-conferred exclusivity, including settlement of any such
action or proceeding, by counsel of its own choice, unless instituting such
action or proceeding is reasonably
likely to materially adversely affect Lilly’s Domain.  United Therapeutics agrees to be joined as a
party plaintiff, if necessary or appropriate, and to give Lilly reasonable
assistance and authority to file and prosecute any such action or proceeding.
If Lilly fails to institute, prosecute, and control any action or proceeding or
settles any such action or proceeding and such failure or settlement has a
materially adverse effect on United Therapeutics’ Domain, United Therapeutics
shall have the option referred to in Section 3.5.


 


8.8                               Information
and Updates.  Lilly recognizes that
United Therapeutics will have a legitimate business interest in obtaining and
maintaining patent protection with respect to the Product in the Field in the
Territory.  As a result, Lilly will
timely keep the JSC informed as to


 


38

















 


such patent protection.  In
addition, on United Therapeutics request, Lilly will provide updates to the JSC
regarding the status of Lilly’s efforts to obtain and maintain patent
protection, and other patent-related activities, with respect to the Product in
the Field in the Territory.


 


8.9                               No Challenges to
the Lilly Patents.  United Therapeutics shall not and shall cause
its Affiliates not to challenge in a court of competent jurisdiction or in any
interference or opposition proceeding, the validity, scope or enforceability of
any Patent included in the Lilly Patents. 
If a sublicensee of United Therapeutics or its Affiliate challenges in a
court of competent jurisdiction or in any interference or opposition
proceeding, the validity, scope or enforceability of any Patent included in the
Lilly Patents, then United Therapeutics or its Affiliate, as applicable, shall,
upon written notice from Lilly, terminate such sublicense.  United Therapeutics and each of its
Affiliates shall include provisions in all agreements under which a Third Party
obtains a license under any Patent included in the Lilly Patents providing
that, if the sublicensee challenges in a court of competent jurisdiction or in
any interference or opposition proceeding, the validity, scope or
enforceability of any Patent included in the Lilly Patents under which the
sublicensee is sublicensed, then United Therapeutics may terminate such
sublicense agreement with such sublicensee, and United Therapeutics shall, upon
request by Lilly, enforce such right if such sublicensee breaches such
restriction.


 


ARTICLE 9


TRADEMARK USAGE AND MAINTENANCE


 


9.1                               Ownership
of Trademarks.  Lilly or its Affiliates shall exclusively own
all Lilly Product Marks and shall be responsible for the procurement and
maintenance of trademark registrations therefor and shall bear all expenses
attributable thereto.  Except for the
license granted in Section 9.2, nothing herein shall create any rights of
United Therapeutics in and to the Lilly Product Marks or the Lilly Corporate
Marks.  Lilly agrees to execute any required
documents, to provide upon United Therapeutics’ request any required records,
and otherwise to cooperate fully with United Therapeutics as may be necessary
to accomplish the recordation of such license for any jurisdiction in which
United Therapeutics seeks such recordation, and the expenses for recordation
will be borne by United Therapeutics. 
Nothing herein shall create any rights of Lilly in and to the United
Therapeutics Corporate Marks. Lilly will not change the separate Lilly brand
name for the Product in the Territory without the consent of United
Therapeutics, such consent not to be unreasonably withheld.


 


9.2                               Lilly
Product Marks License Grant.  Subject to the terms and conditions of this
Agreement, Lilly hereby grants to United Therapeutics and United Therapeutics’
Affiliates an exclusive license to use and display the Lilly Product Marks
during the Term in the Field in the Territory, solely in connection with the
Commercialization of the Product in the Field in the Territory, as provided
under and in accordance with this ARTICLE 9. 
Solely to the extent required by Applicable Law, United Therapeutics
shall have the non-exclusive right use and display the Lilly Corporate Marks.


 


9.3                               Use
of the Trademarks.  United Therapeutics shall use the Lilly
Product Marks and Lilly Corporate Marks solely as permitted in Section 9.2
as provided in this ARTICLE 9.


 


39

















 


9.4                               Quality
Control.


 


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


 


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


 


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


 


9.5                               Use
of Trademark Designations.  The TM
designation shall be used in conjunction with each Lilly Product Mark and each
Lilly Corporate Mark within the Territory until such time as registrations
issue.  Once registrations issue, the ®
designation shall be used in connection with the Lilly Product Mark and each
Lilly Corporate Mark.  An appropriate
statutory notice of trademark ownership shall be affixed to or imprinted on any
material wherever the Lilly Product Marks or Lilly Corporate Marks are used (subject
to reasonable size and artistic constraints) in substantially the following
form (tailored to reflect which trademark is being used): “{trademark}TM” is a
trademark owned by Eli Lilly and Company.” 
Lilly’s ownership of such marks shall be identified on all materials on
which they appear.  The exact language
for identification of ownership shall be in accordance with implementation
guidelines to be agreed upon by the Parties.


 


40

















 


9.6                               Infringement
of Lilly Product Marks.  In the event
that either Party becomes aware of (a) actual infringement of a Lilly
Product Mark in the Territory; (b) a mark or name confusingly similar to a
Lilly Product Mark in the Territory; or (c) any unfair trade practices,
trade dress imitation, passing off, or like offenses in the Territory that
relate to the Lilly Product Marks in the Territory, such Party shall promptly
so notify the other Party in writing. 
Lilly shall have the right, but not the obligation, at its sole cost and
expense, to initiate, prosecute, and control an infringement action or file any
other appropriate action or claim related to infringement of the Lilly Product
Mark or any Lilly Corporate Mark against any Third Party in the Territory.  If Lilly fails to bring an such infringement
action within a period of ninety (90) days after delivery of the notice set forth
above, then United Therapeutics shall have the right, but not the obligation,
at its sole cost and expense, to initiate, prosecute, and control an
infringement action or file any other appropriate action or claim related to
infringement of the Lilly Product Mark against any Third Party.  In either event, the Party not bringing any
such action (i) shall have the right (at its own expense) to participate
in such action and to be represented by counsel of its own choice, and (ii) agrees,
at the request and expense of the Party bringing such action, to be joined as a
party to the suit and to provide reasonable assistance in any such action.  The Party controlling such action shall take
all reasonable and appropriate steps to protect, defend, and maintain the Lilly
Product Marks for use by the Parties and shall have the right to control
settlement of such action; provided, however, that no settlement shall be
entered into without the written consent of the other Party, which consent shall not be unreasonably
withheld.


 


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


 


9.8                               Third-Party
Trademark Claims.  If a claim is
brought by a Third Party that use of any Lilly Product Mark or Lilly Corporate
Mark infringes such Third Party’s trademarks, the Party against which the
action is brought will give prompt written notice to the other Party of such
claim.  Lilly shall have the right, but
not the obligation, to defend or settle such claim and any resulting suit at
its expense and shall indemnify United Therapeutics against any resulting final
judgments and settlements; provided that Lilly shall not settle any claim or
suit in a manner that would have a materially adverse effect on United
Therapeutics’ Domain  without
obtaining United Therapeutics’ prior written consent, which consent shall not be unreasonably
withheld.


 


ARTICLE 10


REPRESENTATIONS,
WARRANTIES, AND COVENANTS


 


10.1                        Representations,
Warranties and Covenants.  Each Party
represents, warrants and covenants to the other Party the following:


 


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


 


41

















 


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


 


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


 


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


 


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


 


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


 


10.2                        Representations
and Warranties of Lilly.  Lilly
hereby represents and warrants to United Therapeutics that, as of the Effective
Date:


 


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


 


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


 


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


 


42

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


43
















 


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


 


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


 


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


 


(p)                                  Lilly
is not aware of:


 


(i)                                    any
facts that Lilly believes
would result in invalidity or unenforceability of the Lilly Patents or Lilly
Trademarks;


 


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


 


(iii)                            any claim, action, suit, or
proceeding, pending or, to Lilly’s knowledge, threatened, that any of the Lilly
Patents is invalid or unenforceable; and


 


(iv)                               the abandonment, disclaimer
(other than with respect to terminal disclaimers) or expiration of any of the
Lilly Patents due to failure to timely pay applicable maintenance and renewal
fees;


 


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


 


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


 


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


 


44

















 


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


 


10.3                        Covenant
of United Therapeutics.  United Therapeutics
covenants that, except as expressly set forth in this Agreement, it will not
conduct, either directly or indirectly, any research, non-clinical or clinical
development activities with respect to the Product.


 


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


 


ARTICLE 11

CONFIDENTIALITY


 


11.1                        Treatment
of Confidential Information.  Except
as provided below, the Parties agree that during the Term, and for a period of
eight (8) years thereafter, each Party (the “Receiving Party”) shall (a) maintain Confidential
Information of the other Party (the “Disclosing
Party”) in confidence to the same extent and with the same degree of
care as the Receiving Party maintains its own proprietary industrial
information of similar kind and value (but at a minimum each Party shall use
commercially reasonable efforts), (b) not disclose such Confidential
Information to any Third Party without prior written consent of the Disclosing
Party, except for disclosures made in confidence to any Third Party that are
explicitly permitted by the Commercialization Plan or approved by the JSC, and (c) not
use such Confidential Information for any purpose except those permitted by
this Agreement or the Manufacturing and Supply Agreement.


 


11.2                        Exceptions.
 Notwithstanding the foregoing, the
Receiving Party shall have no such confidentiality obligations with respect to
any portion of the Confidential Information of the Disclosing Party that:


 


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


 


45

















 


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


 


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


 


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


 


11.3                        Authorized
Disclosures.  Nothing in this
Agreement shall prohibit the Receiving Party from disclosing Confidential
Information of the other Party, as well as the terms and conditions of this
Agreement:


 


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


 


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


 


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


 


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


 


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


 


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


 


46

















 


11.4                        Securities
Filings.  Subject to the Securities
Act of 1933, as amended, the Exchange Act, or any other applicable securities
law: (a) if either Party proposes to file with the Securities and Exchange
Commission or the securities regulators of any state or other jurisdiction a
registration statement or any other disclosure document which describes this
Agreement under the Securities Act of 1933, as amended, the Exchange Act, or
any other applicable securities law, such Party shall notify the other Party of
such intention and shall provide, to the extent practicable, such other Party
with a copy of relevant portions of the proposed filing reasonably prior to
such filing (and any revisions to such portions of the proposed filing a
reasonable time prior to the filing thereof), including any exhibits thereto;
and (b) each Party shall have a right to provide comments in a timely manner
on any portion of any such proposed filing of the other Party that describes
this Agreement prior to the filing thereof.


 


11.5                        Publicity.
 The Parties agree that the joint
public announcement of the execution of this Agreement shall be substantially
in the form of the press release attached as Exhibit 11.5 and they shall
cooperate in the issuance thereof as soon as practicable after the execution of
this Agreement unless they agree otherwise. 
In addition, the Parties recognize that each Party may from time to time
desire to issue additional press releases and make other public statements or
disclosures regarding the subject matter of this Agreement. Such publication
shall be permitted without the other Party’s consent to the extent that such
additional releases or statements that do not contain information beyond that
which is included in the press release attached as Exhibit 11.5 or in
subsequent press releases approved by both Parties, or are not reasonably
likely to have a materially adverse effect on the other Party’s reputation or
Domain.  Any other publication, news
release or other public announcement relating to this Agreement or to the
performance hereunder shall first be reviewed and approved by both Parties,
which approval shall not be unreasonably withheld.  Notwithstanding anything else in this ARTICLE
11, any disclosure which is required by law or the rules of a securities
exchange, as advised by the disclosing Party’s counsel, may be made without the
prior consent of the other Party, although the other Party shall be given
prompt written notice of any such legally required disclosure and to the extent
practicable shall provide the other Party an opportunity to comment on the
proposed disclosure.


 


11.6                        Publication.


 


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


 


47

















 


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


 


11.7                        Patient
Information.  The Parties shall abide
by Applicable Laws concerning the confidentiality or protection of patient
identifiable information and/or patients’ protected health information, as
defined by U.S. C.F.R. Part 160 or personal data as defined by EU
Directive 95/46/EC or any other applicable legislation, in the course of their
performance under this Agreement.


 


11.8                        Confidentiality
Agreement.  Disclosures of
information made by the Parties pursuant to the Confidentiality Agreement are deemed to have been made
pursuant to this Agreement and subject to this ARTICLE 11.  The Confidentiality Agreement is hereby terminated as of the
Effective Date and of no further force or effect, except with respect to any
breach of the Confidentiality Agreement prior to the Effective Date.


 


ARTICLE 12

INDEMNIFICATION


 


12.1                        Indemnification
by United Therapeutics.  Subject to Section 12.3,
United Therapeutics agrees to defend any and all Lilly Indemnitees at United
Therapeutics’ cost and expense, and shall indemnify and hold harmless the Lilly
Indemnitees from and against any liabilities, losses, costs, damages, fees, or
expenses (including reasonable legal expenses and attorneys’ fees incurred by
the Lilly Indemnitees until such time as United Therapeutics has acknowledged
and assumed its indemnification obligation hereunder with respect to a Claim)
payable to a Third Party (collectively, “Losses”)
arising out of any claim, action, lawsuit, or other proceeding (collectively, “Claims”) brought against any Lilly
Indemnitee by a Third Party to the extent resulting directly or indirectly from:


 


(a)                                  the
Development, manufacture, use, or Commercialization of the Product by any and
all United Therapeutics Indemnitees;


 


(b)                                  any
and all recalls of the Product in the Field in the Territory required due to
the activities of the United Therapeutics Indemnitees with respect to United
Therapeutics’ Development, manufacture, use, or Commercialization of the
Product;


 


(c)                                  the
negligence or willful misconduct of the United Therapeutics Indemnitees;


 


(d)                                  any
material breach by United Therapeutics of any of its representations,
warranties, covenants or obligations pursuant to this Agreement or the
Manufacturing and Supply Agreement; or


 


(e)                                  any
violation of Applicable Law by the United Therapeutics Indemnitees;


 


except to the extent such Losses result from activities for which Lilly
must indemnify the United Therapeutics Indemnitees  pursuant to Section 12.2.


 


48

















 


12.2                        Indemnification
by Lilly.  Subject to Section 12.3,
Lilly agrees to defend the United Therapeutics Indemnitees, at Lilly’s cost and
expense, and shall indemnify and hold harmless the United Therapeutics
Indemnitees from and against any Losses arising out of any Claims brought
against any United Therapeutics Indemnitee by a Third Party to the extent
resulting directly or indirectly from:


 


(a)                                  the
research, non-clinical development, Development, manufacture, use or
Commercialization of the Product or the Compound by the Lilly Indemnitees,


 


(b)                                  any
and all recalls of the Product in the Field in the Territory required due to
the activities of the Lilly Indemnitees with respect to Lilly’s research,
non-clinical development, Development, manufacture, use or Commercialization of
the Product or the Compound;


 


(c)                                  the
negligence or willful misconduct of the Lilly Indemnitees;


 


(d)                                  any
material breach by Lilly of any of its representations, warranties, covenants
or obligations pursuant to this Agreement or the Manufacturing and Supply
Agreement; or


 


(e)                                  any
violation of Applicable Law by the Lilly Indemnitees;


 


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


 


12.3                        Procedure.


 


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


 


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


 


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


 


49

















 


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


 


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


 


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


 


12.4                        Insurance.  During the Term and for seven (7) years
thereafter, United Therapeutics shall maintain, at its sole expense, such types
and amounts of insurance coverage as are appropriate and customary in the
pharmaceutical industry in light of the nature of the activities to be
performed by United Therapeutics hereunder. 
During the Term and for seven (7) years thereafter, Lilly shall (a) maintain,
at its sole expense, such types and amounts of insurance coverage as are
appropriate and customary in the pharmaceutical industry in light of the nature
of the activities to be performed by Lilly hereunder, or (b) self insure
for such risks.  The Parties acknowledge
and agree that such insurance shall not be construed to create a limit of
either Party’s liability with respect to its indemnification obligations under
this ARTICLE 12.  Each Party shall
provide the other with written evidence of such insurance upon request.  Each Party shall provide the other with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance or self-insurance which materially
adversely affects the rights of the other Party hereunder.


 


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


 


ARTICLE 13

TERM AND TERMINATION


 


13.1                        Term.  Unless earlier terminated in accordance with
the terms of this ARTICLE 13, the term of this Agreement shall begin on the
Effective Date and will continue until the later


 


50

















 


of:  (a) the expiration, lapse, cancellation,
abandonment or invalidation of the last Valid Claim covering the
Commercialization of the Product in the Field in the Territory or (b) expiration
of any government-conferred exclusivity respecting the use of the Product in the Field
in the Territory (the “Term”).


 


13.2                        Unilateral
Termination by United Therapeutics.  United Therapeutics shall have the right to
terminate this Agreement  at any
time during the Term upon six (6) months written notice to Lilly, which
right may be exercised in United Therapeutics’ discretion.


 


13.3                        Material
Breach.


 


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


 


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


 


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


 


13.4                        Unilateral
Termination by Lilly.  Lilly shall
have the right to terminate this Agreement at any time upon:


 


51

















 


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


 


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


 


13.5                        Consequences
of Expiration or Termination.


 


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


 


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


 


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


 


(2)                                 if
Lilly is continuing to manufacture the Compound or the Product for exploitation
in Lilly’s Domain, the Parties will discuss the possibility of Lilly continuing
to supply United Therapeutics with the Compound or the Product under the
Manufacturing and Supply Agreement or a replacement therefor;


 


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


 


(4)                                 Lilly shall transfer to
United Therapeutics all Regulatory Approvals for the Product in the Field in
the Territory; provided that United Therapeutics hereby grants and shall grant
to Lilly a right to reference to any and all such Regulatory Approvals for the
purpose of seeking Regulatory Approvals for the Compound in Lilly’s Domain;


 


(5)                                 to
the extent not already provided to United Therapeutics, Lilly shall provide United Therapeutics
with a copy of all Regulatory Filings relating to such Regulatory Approvals;
and


 


52

















 


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


 


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


 


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


 


(i)                                    the
licenses granted to United Therapeutics under this Agreement shall terminate,
and, after a wind-down period to be mutually agreed by the Parties, United
Therapeutics shall cease all Development and Commercialization activities;


 


(ii)                                United
Therapeutics shall deliver to Lilly or destroy the United Therapeutics
Promotional Materials and any and all promotional materials for the Product
then in possession of United Therapeutics and/or its Affiliates.  Lilly shall have the right to use all aspects
of the United Therapeutics Promotional Materials solely in connection with the Commercialization
of the Product in the Field in the Territory, other than the Corporate
Marks of United Therapeutics;


 


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


 


(iv)                               to
the extent that United Therapeutics owns or otherwise Controls any Patents
covering any aspect of the Development or Commercialization of the Product,
United Therapeutics hereby grants and shall grant to Lilly, effective upon the
effective date of termination of this Agreement, a perpetual, non-exclusive,
fully-paid, sublicenseable, assignable license under such Patents to make, have
made, use, sell, offer for sale and import the Product in the Field in the
Territory; provided that, if United Therapeutics would incur any expense to a
Third Party by granting to Lilly such license that included such Third Party
Patents, Lilly, at Lilly’s option, exercisable at Lilly’s sole discretion, may
elect to include such Third Party Patents in the license from United
Therapeutics and reimburse United Therapeutics for costs and expenses actually
incurred by United Therapeutics in granting such rights to Lilly under such
Third Party Patents;


 


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


 


53

















 


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


 


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


 


(vii)                           notwithstanding
anything to the contrary in this Agreement or the Manufacturing and Supply Agreement, United
Therapeutics shall not have the right, for a period of two (2) years after
such termination, to Develop, manufacture, use, or Commercialize the Product in
the Field in the Territory.


 


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


 


(i)                                    the
licenses granted to United Therapeutics under this Agreement shall terminate,
and, after a wind-down period to be mutually agreed by the Parties, United
Therapeutics shall cease all Development and Commercialization activities;


 


(ii)                                United
Therapeutics shall deliver to Lilly or destroy the United Therapeutics
Promotional Materials, any and all promotional materials for the Product then
in Control of United Therapeutics and/or its Affiliates;


 


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


 


(iv)                               to
the extent that United Therapeutics owns or otherwise Controls any Patents
covering any aspect of the Development or Commercialization of the Product,
United Therapeutics hereby grants and shall grant to Lilly, effective upon the
effective date of termination of this Agreement, a perpetual, non-exclusive,
fully-paid, sublicenseable, assignable license under such Patents to make, have
made, use, sell, offer for sale and import the Product in the Field in the
Territory; provided that, if United Therapeutics would incur any expense to a
Third Party by granting to Lilly such license that included such Third Party
Patents, Lilly, at Lilly’s option, exercisable at Lilly’s sole discretion, may
elect to include such Third Party Patents in the license from United
Therapeutics and reimburse United Therapeutics for costs and expenses actually
incurred by United Therapeutics in granting such rights to Lilly under such
Third Party Patents;


 


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


 


54
















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


55

















 


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


 


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


 


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


 


13.6        Survival.


 


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


 


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


 


13.7        No
Waiver of Remedies. 
Expiration or termination of this Agreement shall not preclude either
Party from (a) claiming any other damages, compensation or relief that it
may be entitled to upon such expiration or termination, (b) any right to
receive any amounts accrued under this Agreement prior to the expiration or
termination date but which are unpaid or become payable thereafter and (c) any
right to obtain performance of any obligation provided for in this Agreement
which shall survive expiration or termination.


 


ARTICLE 14


DISPUTE RESOLUTION


 


14.1        Disputes.
 The Parties
recognize that disputes as to certain matters may from time to time arise
during the Term that relate to either Party’s rights and/or obligations
hereunder.  It is the desire of the
Parties to establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual cooperation and
without resort to arbitration or 


litigation.  To accomplish this
objective, the Parties agree to follow the procedures set forth in this ARTICLE
14 if and when a dispute 


arises under this Agreement. 
Either Party may refer a dispute under this Agreement to the Parties’
Alliance Managers. If the Alliance Managers are unable to resolve any such
dispute within ninety (90) days after such dispute is submitted to it, either
Party may, by written notice to the other Party, have such dispute referred 


 


56

















 


to their respective executive officers designated below or their
successors, for attempted resolution by good faith negotiations within
forty-five (45) days after such notice is received.  Such designated officers are as follows:


 


	
   

  	
  For Lilly:

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  For United Therapeutics:

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

  
				



 


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


 


14.2        Governing
Law; Dispute Resolution.


 


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


 


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


 


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


 


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


 


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


 


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


 


57

















 


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


 


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


 


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


 


ARTICLE 15


MISCELLANEOUS


 


15.1        Entire
Agreement.  This
Agreement, the Manufacturing and Supply Agreement and the Stock Purchase
Agreement, including the exhibits hereto and thereto, constitute the entire
understanding between the Parties with respect to the subject matter contained
herein and supersedes any and all prior and contemporaneous agreements,
understandings and arrangements whether oral or written between the Parties
relating to the subject matter hereof, including the Confidentiality
Agreement.  This Agreement will control
in the event of any conflict between this Agreement and the Commercialization
Plan.


 


15.2        Assignment.  A Party may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the non-assigning Party, and any attempted assignment without such consent shall be null
and void. Notwithstanding the foregoing, Lilly may assign this Agreement to any
of its Affiliates, or in connection with a merger or acquisition of or by
Lilly, or a sale of Lilly’s assets to which this Agreement relates. This
Agreement shall 


 


58

















 


be binding upon and, subject to the terms of this Section 15.2,
inure to the benefit of a Party’s successors and permitted assigns.


 


15.3        Amendments.  No amendment, change, modification or
alteration of the terms and conditions of this Agreement shall be binding upon
either Party unless in writing and signed by the Party to be charged.


 


15.4        Bankruptcy.
 All rights and
licenses granted under or pursuant to this Agreement by Lilly or United
Therapeutics are, and will otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, licenses of right to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that the Parties, as
licensees of such rights under this Agreement, will retain and may fully
exercise all of their rights and elections under the U.S. Bankruptcy Code.  The Parties further agree that, in the event
of the commencement of a bankruptcy proceeding by or against either Party under
the U.S. Bankruptcy Code, the Party hereto that is not a Party to such
proceeding will be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property and all embodiments of such intellectual
property, and same, if not already in their possession, will be promptly
delivered to them (a) upon any such commencement of a bankruptcy
proceeding upon their written request therefor, unless the Party subject to
such proceeding elects to continue to perform all of its obligations under this
Agreement, or (b) if not delivered under (a) above, following the
rejection of this Agreement by or on behalf of the Party subject to such
proceeding upon written request therefor by the non-subject Party.


 


15.5        Non-Waiver.  The waiver by either
of the Parties of any breach of any provision hereof by the other Party shall
not be construed to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself.


 


15.6        Severability.  If and to the extent that any court or
tribunal of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the application thereof to any circumstances, to be invalid or
unenforceable in a final nonappealable order, the Parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize
the intent of the Parties as fully as practical, and the remainder of this
Agreement and the application of such invalid term or provision to
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby, and each of the remaining terms and provisions
of this Agreement shall remain valid and enforceable to the fullest extent of
the law.


 


15.7        Notice.  Any notice to be given under this Agreement
must be in writing and delivered either in person, by any method of mail
(postage prepaid) requiring return receipt, or by international courier or
facsimile confirmed thereafter by any of the foregoing, to the Party to be
notified at its address(es) given below, or at any address such Party has
previously designated by prior written notice to the other.  Notice shall be deemed sufficiently given for
all purposes upon the earlier of:  (a) the
date of actual receipt; (b) if mailed, five (5) calendar days after
the date of postmark; or (c) if delivered by international courier, the
next business day the overnight courier regularly makes deliveries in the
country of the recipient:


 


59

















 


If to Lilly, as follows:


 


Eli Lilly and Company

Lilly Corporate Center

Indianapolis, Indiana 46285

Facsimile: 

Attn:  President, U.S. Affiliate


 


With a copy to:


 


Eli Lilly and Company

Lilly Corporate Center

Indianapolis, Indiana 46285

Facsimile:  

Attn:  General Counsel


 


If to United Therapeutics, as follows:


 


United Therapeutics Corporation

1110 Spring Street

Silver Spring, Maryland  20910

Attention: Martine Rothblatt, Ph.D.

Facsimile:  


 


With copies to:


 


United Therapeutics Corporation
 1110 Spring Street

Silver Spring, Maryland  20910

Attention: John Ferrari, CFO

Facsimile:  


 


United Therapeutics Corporation

1735 Connecticut Avenue, N.W.

Washington, D.C.  20009

Attention: Paul A. Mahon, General Counsel

Fax Number:  


 


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


 


15.8        Further
Assurances.  Each
Party shall, at its own expense, furnish, execute, and deliver all documents
and take all actions as may reasonably be required to effect the terms and
purposes of this Agreement.


 


15.9        Force
Majeure.  Except
with respect to United Therapeutics’ obligation to make payments to Lilly, no
failure or omission by the Parties in the performance of any obligation of this
Agreement shall be deemed a breach of this Agreement nor shall it create any
liability if the same shall arise from any cause or causes beyond the
reasonable control of the affected Party, including the following, which for
purposes of this Agreement shall be regarded as beyond the control of the Party
in question: acts of nature; acts or omissions of any government; any rules, 


 


60

















 


regulations, or orders issued by any governmental authority or by any
officer, department, agency or instrumentality thereof; fire; storm; flood;
earthquake; accident; war; rebellion; insurrection; riot; invasion; strikes;
and lockouts or the like; provided that the Party so affected shall use its
best efforts to avoid or remove such causes or nonperformance and shall
continue performance hereunder with the utmost dispatch whenever such causes
are removed.


 


15.10      Independent
Contractors.  It
is understood that both Parties are independent contractors and engage in the
operation of their own respective businesses, and neither Party is to be
considered the agent or partner of the other Party for any purpose whatsoever,
except as otherwise expressly provided in this Agreement.  Neither Party has any authority to enter into
any contracts or assume any obligations for the other Party or make any
warranties or representations on behalf of the other Party.  Furthermore, nothing in this Agreement shall
be construed as creating a partnership or joint venture among the Parties.


 


15.11      Performance
by Affiliates.  The Parties recognize that each
Party may perform some or all of its obligations, or exercise some or all of
its rights, under this Agreement or the Manufacturing and Supply
Agreement through one or more
Affiliates of such Party. In each such case, the Party permitting such
delegation or exercise by such Affiliate shall remain responsible for and be
guarantor of the performance by such Affiliate. Lilly and United Therapeutics
shall each cause its respective Affiliates to comply with the provisions of
this Agreement in connection with such performance or exercise.  In such event, each reference to a Party in
this Agreement shall be deemed to include a reference to each Affiliate engaged
in such performance or exercise. Lilly shall cause each of its Affiliates to
comply with the terms of Sections 2.1 and 2.4 as if such Affiliate were Lilly
hereunder.


 


15.12      No
Third Party Beneficiaries.  This Agreement is neither expressly nor
impliedly made for the benefit of any Party other than those executing it.


 


15.13      Interpretation.


 


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


 


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


 


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


 


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


 


61

















 


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


 


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


 


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


 


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


 


[Signature
Page Follows]


 


62

















 


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


 


	
  ELI LILLY AND COMPANY

  	
  UNITED THERAPEUTICS

  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John C. Lechleiter

  	
   

  	
  By:

  	
  /s/ Roger A. Jeffs

  
	
   

  	
   

  
	
  Name: John C. Lechleiter

  	
  Name: Roger A. Jeffs

  
	
   

  	
   

  
	
  Title: President & Chief Executive Officer

  	
  Title: President & Chief Operating Officer

  
					



 


 


[Signature Page to License Agreement]


 
















 


Exhibit 1.13


Compound


 





 

















 


Exhibit 1.37


Lilly Patents


 


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


 


6,821,975, Granted November 23, 2004


 


7, 182, 958, Granted February 27, 2007


 


US Application 10/521,393


 

















 


Exhibit 1.44


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


 


	
  Test

  	
   

  	
  Analytical

  Procedure

  	
   

  	
  Acceptance Criteria

  
	
  Identification Test

  	
   

  	
   

  	
   

  	
   

  
	
  Identification

  	
   

  	
  IR

  	
   

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

  
	
  Potency Tests

  	
   

  	
   

  	
   

  	
   

  
	
  Assay

  	
   

  	
  LC

  	
   

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

  
	
  Uniformity
  of Dosage Units

  	
   

  	
  USP

  	
   

  	
  Meets
  USP requirements

  
	
  Purity Tests

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Degradation Products

  	
   

  	
  LC

  	
   

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

  
	
  Any
  Unspecified Degradation Product

  	
   

  	
  LC

  	
   

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

  
	
  Other Tests

  	
   

  	
   

  	
   

  	
   

  
	
  Physical
  Appearance(2)

  	
   

  	
  Visual

  	
   

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

  
	
  Dissolution

  	
   

  	
  USP

  	
   

  	
  Meets
  USP requirements;

  Q = [***]% at [***]
  and

  Q = [***]% at [***]

  



 






NLT
= Not less than; NMT = Not more than


 


(1)  Pending regulatory agency approval


 


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


 

















 


Exhibit 1.52


Safety Agreement Table of Contents


 


A.            Background


 


B.            General
Considerations


 


Management of a Single Global Safety Database


 


Adherence to Standard Operating Procedures


 


European Qualified Person for
Pharmacovigilance (QPPV)


 


Rights of Pharmacovigilance Audit


 


Records Retention


 


Data Reconciliation


 


C.            Adverse
Event Reporting and Exchange


 


Clock Start Date for Expedited Reporting


 


Regulatory Reporting Responsibilities


 


Language, Format and Mode for Information
Exchange


 


Timing Requirements


 


Assessing Listedness


 


Responsibilities for Obtaining Follow-Up
Information


 


Literature Review


 


Collection of Lot Numbers


 


Data Required for Internal Committees


 


D.            Risk
Management


 


Risk Management Plan Development and
Maintenance


 


Safety Signal Detection and Surveillance


 


E.             Periodic
Reports


 


F.             Regulatory
Inquiry from Health Authorities


 


G.            Regulatory
Inspections


 


H.            Dispute
Resolution


 


I.              Safety
Agreement Termination


 


Attachment 1: Contacts


 


Attachment 2: 
Adverse Event Reporting Contacts


 


Attachment 3: 
Territories


 


Attachment 4: 
AE Process Flow and Case Receipt Reconciliation


 

















 


Exhibit 5.1


Ongoing Lilly Trials


 


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


 


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


 


·      The LVGX trial has two
parts:


 


·      A blinded 52-week phase (Part 1)


 


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


 


·      An open-label phase (Part 2).


 


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


 


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


 


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


 


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


 


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


·      Empty study drug packaging.


·      Dispense a 13-week supply of
study drug.


·      Collect adverse event
information (including SAEs).


·      Collect concomitant
medication information.


·      Collect reason for
discontinuation.


 


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


 

















 


Exhibit 5.2(f)


[***]TM
Phase IV Clinical Plan*


 


	
  Study Title

  	
   

  	
  Study Description

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  



 






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


 

















 


Exhibit 6.2


Commercialization Plan


 


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


 


UT Brand Plan Outline


 


I.      Business Objectives


 


II.    Situation Analysis


 


III.   Strategies


 


IV.   Tactics


 


V.    Medical Plan


 


VI.   Budgets


 

















 


Exhibit 7.5


Wire Instructions for Payments to Lilly


 


Swift code for 


 


ABA#:  


For account of:  Eli Lilly & Company


Account No.: 



Ref: 
                                                  (Key
words to identify payment)


 

















 


Exhibit 7.8


Wire Instructions for Payments to United
Therapeutics


 


Bank: 


 


ABA/Routing #: 


Account name: United Therapeutics Corporation


Account number: 


 

















 


Exhibit 10.2(j)


Encumbrances, Security Interests, Options and
Licenses


 


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


 

















 


Exhibit 10.2(k)


Claims, Actions, Suits or Proceedings


 


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


 

















 


Exhibit 10.2(p)(ii)


Other Claims, Actions, Suits or Proceedings


 


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


 

















 


Exhibit 11.5


Press Release


 


(SEE ATTACHED)


 

















 





 


Eli Lilly and Company


Lilly Corporate Center


Indianapolis, Indiana 46285


U.S.A.


www.lilly.com


 


Date: November 17, 2008


 


	
  For Release:

  	
   

  	
  Immediately

  
	
  Refer to:

  	
   

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

  
	
   

  	
   

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

  



 


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


Lilly Takes $150 Million Equity Stake in United Therapeutics


Companies Also Sign Manufacturing and Supply Agreement


 


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


 


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


 


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


 

















 


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


 


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


 


About Pulmonary Arterial Hypertension 


 


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


 


About United Therapeutics


 


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


 


About Lilly


 


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


 


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


 


2

















 


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


 


#           #          #


 


3