DEVELOPMENT MILESTONE PAYMENTS, TIERED SALES MILESTONES AND TIERED ROYALTIES ON
NET SALES CUSTOMARY FOR SUCH AGREEMENTS AND TO BE PAID BY DS UNDER THE LICENSE
AGREEMENT(S) FOR EACH LICENSED PRODUCT THAT IS DEVELOPED AND COMMERCIALIZED
UNDER THIS AGREEMENT AND/OR A LICENSE AGREEMENT, WHICH MILESTONE PAYMENTS AND
ROYALTIES SHALL INCLUDE THE MILESTONE AND ROYALTY PAYMENTS DESCRIBED IN SCHEDULE
3 AND SHALL CONFORM IN ALL MATERIAL RESPECTS WITH THE TERMS AND CONDITIONS SET
FORTH IN SCHEDULE 3, AND (B) SUCH ADDITIONAL PROVISIONS RELATING TO ROYALTY
REPORTS, PAYMENT MECHANISMS AND DATES, AUDIT RIGHTS, OVERDUE PAYMENTS, TAXES,
CURRENCY CONVERSION RATES AND OTHER PROVISIONS AS ARE USUAL AND CUSTOMARY FOR
INCLUSION IN PROVISIONS RELATING TO MILESTONES AND ROYALTIES IN COLLABORATION
AND LICENSE AGREEMENTS BETWEEN COMPANIES IN THE PHARMACEUTICAL INDUSTRY OF
COMPARABLE SIZES TO THE RESPECTIVE PARTIES.
FOR PURPOSES OF CLARITY, SUCH
ADDITIONAL PROVISIONS SHALL SUPPLEMENT AND SHALL NOT MATERIALLY EXPAND, LIMIT OR
CHANGE THE PROVISIONS SET FORTH ON SCHEDULE 3.
THE PARTIES SHALL NEGOTIATE SUCH
AMENDMENT TO THIS AGREEMENT OR SEPARATE AGREEMENT IN GOOD FAITH AND WITH
SUFFICIENT DILIGENCE AS IS REQUIRED TO EXECUTE AND DELIVER SUCH AMENDMENT OR
SEPARATE AGREEMENT WITHIN * (*) DAYS OF THE EFFECTIVE DATE.
IN THE EVENT THE
PARTIES FAIL TO EXECUTE AND DELIVER THE AMENDMENT TO THIS AGREEMENT OR SEPARATE
AGREEMENT WITHIN SUCH * (*) DAY PERIOD, THE PARTIES SHALL (A) USE REASONABLE
EFFORTS TO COMPLETE SUCH NEGOTIATIONS AND TO EXECUTE AND DELIVER THE AMENDMENT
TO THIS AGREEMENT OR SEPARATE AGREEMENT AS SOON AS POSSIBLE AFTER SUCH * (*) DAY
PERIOD AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AFTER THE
EXPIRATION OF SUCH * (*) DAY PERIOD, EACH PRODUCE A LIST OF
48
ISSUES ON WHICH THEY HAVE FAILED TO REACH AGREEMENT AND SUBMIT ITS LIST TO THE
JEC TO BE RESOLVED AS A UNANIMOUS DECISION IN ACCORDANCE WITH SECTION 2.1.5.
6.
TREATMENT OF CONFIDENTIAL INFORMATION;
PUBLICITY; NON-SOLICITATION.
6.1
CONFIDENTIALITY.
6.1.1
CONFIDENTIALITY OBLIGATIONS.
ARQULE AND
DS EACH RECOGNIZE THAT THE OTHER PARTY'S CONFIDENTIAL INFORMATION AND
PROPRIETARY MATERIALS CONSTITUTE HIGHLY VALUABLE ASSETS OF SUCH OTHER PARTY.
ARQULE AND DS EACH AGREES THAT, SUBJECT TO SECTION 6.1.2, IT WILL NOT DISCLOSE,
AND WILL CAUSE ITS AFFILIATES AND SUBLICENSEES (OR SUBLICENSEES, AS THE CASE MAY
BE) NOT TO DISCLOSE, ANY CONFIDENTIAL INFORMATION OR PROPRIETARY MATERIALS OF
THE OTHER PARTY AND IT WILL NOT USE, AND WILL CAUSE ITS AFFILIATES AND
SUBLICENSEES (OR SUBLICENSEES, AS THE CASE MAY BE) NOT TO USE, ANY CONFIDENTIAL
INFORMATION OR PROPRIETARY MATERIALS OF THE OTHER PARTY EXCEPT AS EXPRESSLY
PERMITTED HEREUNDER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, THE OBLIGATIONS OF EACH PARTY UNDER THIS SECTION 6.1.1 SHALL REMAIN
IN EFFECT DURING THE TERM AND FOR AN ADDITIONAL TEN (10) YEARS FOLLOWING THE
TERMINATION OR EXPIRATION OF THIS AGREEMENT.
6.1.2
LIMITED DISCLOSURE.
ARQULE AND DS EACH
AGREES THAT DISCLOSURE OF ITS CONFIDENTIAL INFORMATION OR ANY TRANSFER OF ITS
PROPRIETARY MATERIALS MAY BE MADE BY THE OTHER PARTY TO ANY EMPLOYEE, CONSULTANT
OR AFFILIATE OF SUCH OTHER PARTY TO ENABLE SUCH OTHER PARTY TO