FOLLOWING PROVISIONS SHALL APPLY:
(I)
IF THE PARTY WHO HAS NOT PROPOSED THE
ACTIVITY HAS OBJECTIVE MEDICAL OR ETHICAL REASONS TO OPPOSE SUCH DEVELOPMENT
ACTIVITY OR CAN REASONABLY DEMONSTRATE THAT THE PERFORMANCE OR OUTCOME OF ANY
SUCH PROPOSED DEVELOPMENT ACTIVITY COULD JEOPARDIZE THE INTERESTS OF SUCH OTHER
PARTY IN THE PRODUCT, THEN WITHIN THIRTY (30) DAYS OF RECEIPT OF NOTICE OF SUCH
PROPOSED DEVELOPMENT, IT SHALL PROVIDE TO THE PARTY PROPOSING THE DEVELOPMENT
ACTIVITY AND TO THE STEERING COMMITTEE WRITTEN NOTICE OF SUCH OBJECTION AND THE
GROUNDS FOR OBJECTION.
(II)
IN THE EVENT THAT THE PROPOSING PARTY,
NOTWITHSTANDING THE NOTICE OF OBJECTION PROVIDED BY THE OTHER PARTY, WISHES TO
PURSUE SUCH DEVELOPMENT ACTIVITY, THE STEERING COMMITTEE SHALL DETERMINE WHETHER
SUCH DEVELOPMENT ACTIVITY SHALL BE PERMITTED.
NO SUCH DEVELOPMENT ACTIVITY
SHALL BE COMMENCED UNLESS OR UNTIL THE STEERING COMMITTEE (OR THE SENIOR
MANAGERS OF THE PARTIES AS APPLICABLE) HAVE DETERMINED THAT IT SHALL BE ALLOWED
TO PROCEED.
IF THE STEERING COMMITTEE RESOLVES THAT THE DEVELOPMENT ACTIVITY
SHOULD BE ALLOWED TO PROCEED, THE PARTIES SHALL THEN AGREE, WITHIN A FURTHER
THIRTY (30) DAYS WHETHER TO ADD SUCH DEVELOPMENT ACTIVITY TO THE CORE
DEVELOPMENT PLAN.
IF THE PARTIES DO NOT AGREE TO SO ADD THE DEVELOPMENT
ACTIVITY, THEN SUCH DEVELOPMENT ACTIVITY SHALL BE DEEMED TO BE NON-CORE
DEVELOPMENT AND THE FOLLOWING PROVISIONS SHALL APPLY: (X) THE PARTY WHO WISHES
TO PROCEED WITH SUCH NON-CORE DEVELOPMENT (THE "CONTINUING
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PARTY") SHALL BE ENTITLED TO PROCEED WITH SUCH NON-CORE DEVELOPMENT AT ITS OWN
COST AND EXPENSE; AND (Y) IF THE NON-CORE DEVELOPMENT RESULTS IN AN NDA
APPROVAL, THE OTHER PARTY SHALL, WITHIN THIRTY (30) DAYS OF THE DATE OF SUCH NDA
APPROVAL, PAY TO THE CONTINUING PARTY A SUM EQUAL TO A PLUS B, WHERE A EQUALS
[*] OF THE NON-CORE DEVELOPMENT COSTS INCURRED BY THE CONTINUING PARTY IN THE
PERFORMANCE OF THE APPLICABLE NON-CORE DEVELOPMENT; AND (B) EQUALS [*] OF A,
PROVIDED HOWEVER, THAT IF SCHERING IS THE CONTINUING PARTY IN THE PERFORMANCE OF
NON-CORE DEVELOPMENT, SONUS MAY, WITHIN SIX (6) MONTHS OF THE COMMENCEMENT BY
SCHERING OF THE APPLICABLE NON-CORE DEVELOPMENT, PROVIDE NOTICE TO SCHERING OF
SONUS' INTENTION TO PARTICIPATE IN SUCH DEVELOPMENT, IN WHICH CASE, ON PAYMENT
BY SONUS OF [*] OF THE NON-CORE DEVELOPMENT COSTS INCURRED BY SCHERING FOR THE
FIRST SIX MONTHS OF SUCH DEVELOPMENT TOGETHER WITH INTEREST AT THE RATE SET OUT
IN SECTION 8.03(B) OF THIS AGREEMENT, SUCH NON-CORE DEVELOPMENT SHALL, WITH
EFFECT FROM THE END OF SUCH INITIAL SIX (6) MONTH PERIOD BECOME CORE
DEVELOPMENT, AND THE PROVISIONS OF SECTIONS 5.02 AND 5.09(A) SHALL APPLY.
SECTION 5.05
OTHER CMC/MANUFACTURING ACTIVITIES.
ANY CMC/MANUFACTURING ACTIVITIES NOT INCLUDED IN THE CMC/MANUFACTURING PLAN AND
BUDGET MAY BE PERFORMED BY THE MANUFACTURING PARTY AT ITS OWN COST AND EXPENSE.
SECTION 5.06
DEVELOPMENT IN ROW.
SCHERING WILL
USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN APPROVALS IN ALL MAJOR COMMERCIAL
MARKETS IN THE TERRITORY AS SOON AS PRACTICABLE AND SHALL BE RESPONSIBLE AT ITS
SOLE COST AND EXPENSE FOR THE PERFORMANCE OF ALL PRECLINICAL