NOR SCHERING WILL BE LIABLE WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR PUNITIVE DAMAGES OR LOST
PROFITS.
ARTICLE 12:
EXPIRATION AND TERMINATION
12.1.
TERM.
THE TERM OF THIS AGREEMENT SHALL COMMENCE ON
THE EFFECTIVE DATE AND SHALL CONTINUE UNTIL THE LAST TO OCCUR OF THE FOLLOWING:
(I) THE EXPIRATION OR TERMINATION OF THE PROOF OF CONCEPT DEVELOPMENT PROGRAM,
(II) THE EXPIRATION OF THE LICENSE TERM OR (III) THE EXPIRATION OF THE EPIX
ROYALTY TERM (THE "TERM").
12.2.
TERMINATION WITHOUT CAUSE.
SCHERING SHALL HAVE THE
RIGHT TO PARTIALLY TERMINATE THIS AGREEMENT WITHOUT CAUSE WITH REGARD TO (I) THE
PROOF OF CONCEPT DEVELOPMENT PROGRAM AT ANY TIME PRIOR TO EXPIRATION OF THE
RELEVANT PROOF OF CONCEPT DEVELOPMENT PERIOD, AND (II) ANY EXCLUSIVE OR
NON-EXCLUSIVE LICENSE GRANTED TO SCHERING HEREUNDER, UPON SIXTY (60) DAYS PRIOR
WRITTEN NOTICE TO EPIX. FOLLOWING SUCH TERMINATION, ALL RIGHTS AND LICENSES
GRANTED TO SCHERING UNDER THIS AGREEMENT SHALL TERMINATE AND SCHERING SHALL
RETURN OR DESTROY ALL TANGIBLE MANIFESTATIONS OF EPIX'S INFORMATION AND EPIX'S
TECHNOLOGY. IF ALL OR PART OF THE WORK UNDER THE APPLICABLE PROOF OF CONCEPT
DEVELOPMENT PROGRAM IS TERMINATED FOR ANY REASON, THEN SCHERING SHALL HAVE NO
OBLIGATION TO CONTINUE PAYMENT THEREAFTER OF INSTALLMENTS UNDER SECTION 3.2;
PROVIDED, HOWEVER, THAT SCHERING SHALL PAY REASONABLE, NON-CANCELABLE, THIRD
PARTY EXPENSES INCURRED BY EPIX UP UNTIL THE EFFECTIVE DATE OF THE TERMINATION.
EPIX SHALL USE GOOD FAITH EFFORT TO LIMIT SUCH OBLIGATIONS FOLLOWING SUCH NOTICE
FROM SCHERING. FOR THE AVOIDANCE OF DOUBT, IF SCHERING TERMINATES THIS AGREEMENT
PURSUANT TO CLAUSE (II) OF THIS SECTION 12.2, THE RIGHTS AND LICENSES GRANTED TO
SCHERING UNDER SECTIONS 4.1.2 AND 5.1.2 HEREOF SHALL IMMEDIATELY TERMINATE WITH
REGARD TO THE RELEVANT EXCLUSIVE OR NON-EXCLUSIVE LICENSE TERMINATED BY SCHERING
HEREUNDER, AND EPIX SHALL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, UNDER THE
LICENSE GRANTED PURSUANT TO SECTION 5.1.1 HEREOF TO FURTHER DEVELOP AND
COMMERCIALIZE ANY SCHERING LICENSED PRODUCT
24
COVERED BY THE TERMINATED LICENSE (THEREAFTER BECOMING AN EPIX LICENSED PRODUCT
AS DEFINED IN SECTION 4.1.2).
12.3.
TERMINATION FOR MATERIAL BREACH.
IF EITHER PARTY
COMMITS A MATERIAL BREACH OF THIS AGREEMENT (A "DEFAULT"), THE OTHER PARTY MAY
NOTIFY THE BREACHING PARTY IN WRITING OF SUCH BREACH, SETTING FORTH THE NATURE
OF THE BREACH IN REASONABLE DETAIL.
IF THE BREACHING PARTY FAILS TO CURE SUCH
BREACH WITHIN THIRTY (30) DAYS (IN THE CASE OF A PAYMENT DUE UNDER THIS
AGREEMENT) OR SIXTY (60) DAYS (IN THE CASE OF ANY OTHER BREACH) OF THE RECEIPT
OF THE FOREGOING NOTICE FROM THE NON-BREACHING PARTY, THEN, SUBJECT TO THE TERMS
OF THIS SECTION 12.3, THE NON-BREACHING PARTY MAY TERMINATE (I) THE RESPECTIVE
PART OF THIS AGREEMENT WHICH IS IMPACTED BY THE UNCURED MATERIAL BREACH, OR (II)
IF THE BREACH IS OF A GENERAL NATURE HAVING A MATERIAL IMPACT ON ALL PARTS, THE
ENTIRE AGREEMENT EFFECTIVE IMMEDIATELY UPON A SECOND WRITTEN NOTICE TO THE
BREACHING PARTY. THE RIGHT OF EITHER PARTY TO TERMINATE THIS