AND CLINICAL
DEVELOPMENT AND ALL ISS ACTIVITIES IN THE ROW.
SECTION 5.07
PERFORMANCE OF DEVELOPMENT
(A)
EACH PARTY AGREES TO PERFORM ITS
OBLIGATIONS SET OUT IN THIS ARTICLE 5 IN COMPLIANCE WITH APPLICABLE LAWS.
EACH
PARTY SHALL HAVE THE RIGHT, AT REASONABLE FREQUENCY AND ON REASONABLE ADVANCE
NOTICE TO THE OTHER PARTY, DURING OR FOLLOWING THE CONDUCT OF PRECLINICAL
DEVELOPMENT, CLINICAL DEVELOPMENT OR CMC/MANUFACTURING OF THE PRODUCT, TO VISIT
THE SITE OR SITES AT WHICH SUCH PRECLINICAL DEVELOPMENT, CLINICAL DEVELOPMENT OR
CMC/MANUFACTURING HAS BEEN OR IS BEING CONDUCTED, SUBJECT TO ANY CONTRACTUAL
RESTRICTIONS IMPOSED BY ANY THIRD PARTY.
DURING SUCH VISITS THE VISITING PARTY
SHALL HAVE THE RIGHT TO EXAMINE ALL DATA, DOCUMENTS AND RECORDS RELATING TO THE
PRODUCT TO DETERMINE WHETHER THE ACTIVITIES HAVE BEEN OR ARE BEING CONDUCTED IN
COMPLIANCE WITH THE PROTOCOL OR PROTOCOLS IN THE DEVELOPMENT PLAN AND BUDGET AND
IN COMPLIANCE WITH APPLICABLE LAWS.
RECOMMENDATIONS OF THE VISITING PARTY SHALL
BE GIVEN DUE CONSIDERATION BY THE OTHER PARTY.
(B)
IN THE EVENT THAT EITHER PARTY FAILS TO
PERFORM OR CEASES TO PERFORM ITS OBLIGATIONS SET FORTH IN THIS ARTICLE 5, AND
FAILS TO COMMENCE SUCH PERFORMANCE WITHIN A REASONABLE TIME OF RECEIPT OF
WRITTEN NOTICE FROM THE OTHER PARTY PURSUANT TO SECTION 16.02(B), THEN (BUT
WITHOUT PREJUDICE TO ANY OTHER RIGHTS OF THE OTHER PARTY) THE OTHER PARTY SHALL
HAVE THE RIGHT TO PERFORM, OR CAUSE ONE OR MORE OF ITS AFFILIATES TO PERFORM,
SUCH OBLIGATIONS.
THE REASONABLE EXPENSES INCURRED BY THE PERFORMING PARTY IN
PERFORMING THE OBLIGATIONS OF THE NON-PERFORMING PARTY SHALL BE RECOVERED BY THE
PERFORMING PARTY ON A DOLLAR-FOR-DOLLAR BASIS.
HOWEVER, IF THE NONPERFORMING
PARTY IS SONUS, SCHERING SHALL RECOVER REASONABLE EXPENSES INCURRED THROUGH
REDUCTION OF THE MILESTONE PAYMENTS AND ROYALTY PAYMENTS NEXT DUE TO SONUS
PURSUANT TO ARTICLE III.
[*]
CONFIDENTIAL PORTIONS OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
20
THE PERFORMING PARTY SHALL BE ENTITLED TO REASONABLE COOPERATION AND ASSISTANCE
FROM THE NON-PERFORMING PARTY, INCLUDING, WITHOUT LIMITATION, ASSIGNMENT TO THE
PERFORMING PARTY OF SPONSORSHIP OF APPROVAL APPLICATIONS IF NECESSARY TO PERMIT
THE EXERCISE OF THE PERFORMING PARTY'S RIGHTS HEREUNDER.
SECTION 5.08
APPROVAL APPLICATIONS AND APPROVALS
(A)
CLINICAL DEVELOPMENT.
EXCEPT IN THE CASE
OF THE PIVOTAL TRIAL, SCHERING SHALL BE RESPONSIBLE FOR PREPARING, FILING AND
PROSECUTING ALL APPROVAL APPLICATIONS FOR PERMISSION TO CONDUCT CLINICAL
DEVELOPMENT IN SUCH COUNTRIES OF THE TERRITORY WHICH REQUIRE SUCH APPLICATIONS
TO BE FILED AND WHERE SCHERING, IN GOOD FAITH AND IN THE EXERCISE OF REASONABLE
BUSINESS JUDGMENT, DETERMINES IT IS COMMERCIALLY REASONABLE TO DO SO.
WITH
RESPECT TO THE US AND ANY OTHER COUNTRY WHERE SONUS HAS AN APPROVAL APPLICATION
ON FILE WITH A GOVERNMENTAL AUTHORITY, SONUS SHALL TRANSFER SUCH APPROVAL
APPLICATION TO SCHERING PROMPTLY FOLLOWING THE REQUEST OF SCHERING, PROVIDED
THAT, FROM AND AFTER THE EXECUTION DATE, SCHERING SHALL HAVE AUTHORITY AND
CONTROL WITH RESPECT TO ANY SUCH APPROVAL APPLICATIONS AND, PRIOR TO TRANSFER TO
SCHERING, ALL COMMUNICATIONS AND INTERACTIONS WITH GOVERNMENTAL AUTHORITIES BY
SONUS WITH RESPECT TO SUCH APPROVAL APPLICATIONS SHALL BE