to a Third Party products
liability claim for which such Party believes that it has the right to require
the other Party to share, in accordance with the provisions of
Section 10.3(c) above, in any payments to be made to such Third Party in
connection with such claim, such Party shall inform the other of such Third
Party products liability claim as soon as reasonably practicable after receiving
notice of the claim.
The Party that is subject to the Third Party products
liability claim shall have the right to control the defense of such claim, but
the other Party shall have the right to participate, at its own expense and with
counsel of its choice, in the defense of such Third Party products liability
claim.
Neither Party shall have any obligation to share in the cost of any
settlement of any such Third Party products liability claim if such settlement
is made without such Party's written consent, provided that such Party does not
unreasonably withhold or delay any such written consent.
10.5.
INSURANCE. EACH PARTY SHALL PROCURE AND MAINTAIN INSURANCE OR
SELF-INSURANCE, INCLUDING PRODUCT LIABILITY INSURANCE, ADEQUATE TO COVER ITS
OBLIGATIONS HEREUNDER AND WHICH ARE CONSISTENT WITH NORMAL BUSINESS PRACTICES OF
PRUDENT COMPANIES SIMILARLY SITUATED AT ALL TIMES DURING WHICH ANY LICENSED
PRODUCT IS BEING CLINICALLY TESTED WITH HUMAN SUBJECTS OR COMMERCIALLY
DISTRIBUTED OR SOLD BY CHIRON, CUBIST OR OTHER LICENSEES.
IT IS UNDERSTOOD 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 10.
EACH PARTY SHALL PROVIDE THE OTHER WITH WRITTEN EVIDENCE OF SUCH
INSURANCE (OR FINANCIAL INFORMATION THAT DESCRIBES THE AMOUNTS AVAILABLE UNDER
ANY SELF-INSURANCE FACILITY) UPON REQUEST.
* CONFIDENTIAL TREATMENT REQUESTED: MATERIAL HAS BEEN OMITTED AND FILED WITH THE
COMMISSION
66
10.6.
LIMITATION OF LIABILITY
(a)
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOST PROFITS OR FOR
ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES
OF THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE SUPPLY AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE SUPPLY AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY.
THE FOREGOING LIMITATION SHALL NOT APPLY
SO AS TO LIMIT THE LIABILITY OF EITHER PARTY FOR LOST PROFITS OR FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES THAT
MAY BE IMPOSED UPON SUCH PARTY UNDER ANY THEORY OF LIABILITY (OTHER THAN BREACH
OF CONTRACT), WHETHER BY STATUTE OR COMMON LAW, AS
A RESULT OF ANY INFRINGEMENT
BY SUCH PARTY OF THE INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY OR AS A
RESULT OF THE FAILURE OF SUCH PARTY TO PERFORM AND OBSERVE ITS CONFIDENTIALITY
OBLIGATIONS TO THE OTHER PARTY.
(b)
EXCEPT AS A RESULT OF A MATERIAL BREACH BY EITHER PARTY OF ITS
REPRESENTATIONS AND WARRANTIES PURSUANT TO ARTICLE 9 OF THIS AGREEMENT OR OF A
MATERIAL BREACH BY SUCH PARTY OF ITS COVENANTS AND AGREEMENTS IN SECTION 8.5 OR
SECTION 8.10 OF THIS AGREEMENT, AND EXCEPT FOR ANY