WITH RESPECT TO THE
ACCOMPLISHMENT OF THE MILESTONES SET FORTH IN SECTION 5.3; PROVIDED, HOWEVER,
THAT NOTHING HEREUNDER SHALL BE CONSTRUED AS REQUIRING SPL TO PROVIDE
PHARMACOPEIA WITH ANY SPECIFIC RESEARCH DATA OR RESULTS, INCLUDING, WITHOUT
LIMITATION, INFORMATION RELATING TO TARGETS OR DATA OBTAINED FROM SCREENING
PROGRAMS BEING CONDUCTED AT SPL.
UNTIL THE FIRST COMMERCIAL SALE OF EACH
AGREEMENT PRODUCT BY OR ON BEHALF OF SPL HEREUNDER, SPL SHALL KEEP PHARMACOPEIA
REASONABLY INFORMED AS TO THE STATUS OF THE PRE-CLINICAL, CLINICAL AND
COMMERCIAL DEVELOPMENT OF SUCH AGREEMENT PRODUCT BY PROVIDING PHARMACOPEIA WITH
ANNUAL WRITTEN REPORTS SUMMARIZING SUCH ACTIVITIES WITH RESPECT TO EACH
POTENTIAL AGREEMENT PRODUCT UNDER DEVELOPMENT DURING THE TERM OF THIS
AGREEMENT.
WITHIN THIRTY (30) DAYS OF THE FIRST COMMERCIAL SALE OF ANY
AGREEMENT PRODUCT, SPL SHALL GIVE PHARMACOPEIA WRITTEN NOTICE THEREOF, WHICH
NOTICE SHALL DESCRIBE THE RELEVANT AGREEMENT PRODUCT, IDENTIFY THE ACTIVE
INGREDIENTS IN SUCH AGREEMENT PRODUCT, AND IDENTIFY THE SPECIFIC TARGET(S) WHICH
LED TO THE DEVELOPMENT OF SUCH AGREEMENT PRODUCT.
3.5
DILIGENCE.
THE PARTIES ACKNOWLEDGE AND
AGREE THAT ALL BUSINESS DECISIONS REGARDING RESEARCH, DEVELOPMENT AND
COMMERCIALIZATION OF AGREEMENT PRODUCTS (INCLUDING, WITHOUT LIMITATION,
DECISIONS RELATING TO THE DEVELOPMENT AND MANUFACTURE OF AGREEMENT COMPOUNDS, OR
TO THE DESIGN, DEVELOPMENT, MANUFACTURE, SALE, PRICE, DISTRIBUTION, MARKETING
AND PROMOTION OF AGREEMENT PRODUCTS UNDER THIS AGREEMENT) AND THE DECISION
WHETHER TO DEVELOP (OR CEASE DEVELOPING) A PARTICULAR AGREEMENT COMPOUND, OR TO
DEVELOP AND COMMERCIALIZE (OR CEASE DEVELOPING AND COMMERCIALIZING) A PARTICULAR
AGREEMENT PRODUCT, SHALL BE WITHIN THE SOLE DISCRETION OF SPL.
SPL SHALL USE
REASONABLE GOOD FAITH EFFORTS TO DISCOVER AND DEVELOP AGREEMENT COMPOUNDS, AND
TO DISCOVER, DEVELOP AND COMMERCIALIZE AGREEMENT PRODUCTS; PROVIDED, HOWEVER,
THAT SPL SHALL HAVE NO QUOTAS OR OTHER MINIMUM DILIGENCE OBLIGATIONS WITH REGARD
TO NUMBER OF AGREEMENT COMPOUNDS AND AGREEMENT PRODUCTS TO BE DEVELOPED AND
14
COMMERCIALIZED HEREUNDER.
SUCH DECISION MAKING AND/OR REASONABLE GOOD FAITH
EFFORTS SHALL BE EXPENDED BY SPL, AS DETERMINED IN ITS REASONABLE COMMERCIAL
JUDGEMENT, BASED UPON THE FACTS AND CIRCUMSTANCES IN EXISTENCE AND REASONABLY
AVAILABLE TO SPL AT THAT TIME, AND SHALL BE EXERCISED IN A MANNER CONSISTENT
WITH THE DISCOVERY, DEVELOPMENT AND COMMERCIALIZATION OF SPL'S OTHER PRODUCTS OF
COMPARABLE COMMERCIAL VALUE, POTENTIAL AND STAGE OF DEVELOPMENT.
ALL OF SPL'S
DILIGENCE OBLIGATIONS HEREUNDER ARE EXPRESSLY CONDITIONED UPON THE CONTINUING
ABSENCE OF ANY ADVERSE CONDITION OR EVENT WHICH WARRANTS A DELAY IN
COMMERCIALIZATION OF AN AGREEMENT PRODUCT INCLUDING, BUT NOT LIMITED TO, AN
ADVERSE CONDITION OR EVENT RELATING TO THE SAFETY OR EFFICACY OF THE AGREEMENT
PRODUCT OR UNFAVORABLE PRICING, PRICING REIMBURSEMENT, LABELING OR LACK OF
REGULATORY APPROVAL, AND SPL SHALL HAVE NO OBLIGATION TO DEVELOP OR MARKET ANY
SUCH AGREEMENT PRODUCT SO LONG AS IN SPL'S OPINION ANY SUCH CONDITION OR EVENT
EXISTS; PROVIDED THAT SPL SHALL USE COMMERCIALLY REASONABLE EFFORTS TO OVERCOME
ANY UNFAVORABLE PRICING OR PRICING REIMBURSEMENT WITH RESPECT TO AGREEMENT
PRODUCTS BEING COMMERCIALIZED UNDER THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE AND
AGREE THAT NONE OF THE DILIGENCE OBLIGATIONS IN THIS SECTION 3.5 SHALL APPLY TO
ANY SCHERING COMPOUNDS, THE DISCOVERY, DEVELOPMENT AND