PATENT RIGHTS.
IN THE EVENT OF AN
INFRINGEMENT OF A JOINT PATENT RIGHT, THEN, SUBJECT TO SECTION 9.2.1(B)(II), THE
PARTIES SHALL ENTER INTO GOOD FAITH DISCUSSIONS AS TO WHETHER AND HOW TO
ELIMINATE THE INFRINGEMENT.
SUBJECT TO THE FOREGOING, (I) DS SHALL HAVE THE
FIRST RIGHT AND OPTION TO ELIMINATE SUCH INFRINGEMENT IN THE FIELD AND ARQULE
SHALL HAVE THE FIRST RIGHT AND OPTION TO ELIMINATE SUCH INFRINGEMENT OUTSIDE THE
FIELD, IN EACH CASE BY REASONABLE STEPS, WHICH MAY INCLUDE THE INSTITUTION OF
LEGAL PROCEEDINGS OR OTHER ACTION AND (II) ALL COSTS, INCLUDING WITHOUT
LIMITATION ATTORNEYS' FEES, RELATING TO SUCH LEGAL PROCEEDINGS OR OTHER ACTION
SHALL BE BORNE BY SUCH PARTY.
NEITHER DS NOR ARQULE SHALL ADMIT THE INVALIDITY
OR UNENFORCEABILITY OF ANY JOINT PATENT RIGHTS OR VALID CLAIMS THEREIN WITHOUT
THE OTHER PARTY'S PRIOR WRITTEN CONSENT.
IF DS OR ARQULE DOES NOT TAKE OR
INITIATE COMMERCIALLY REASONABLE STEPS TO ELIMINATE THE INFRINGEMENT WITHIN *
(*) DAYS FROM ANY INFRINGEMENT NOTICE (OR * (*) DAYS IN THE CASE OF AN
INFRINGEMENT RESULTING FROM THE SUBMISSION BY ANY THIRD PARTY OF AN ABBREVIATED
NEW DRUG APPLICATION UNDER THE HATCH-WAXMAN ACT), THEN THE OTHER PARTY SHALL
HAVE THE RIGHT AND OPTION TO DO SO AT ITS EXPENSE.
(E)
REPRESENTATION OF EITHER PARTY.
EACH PARTY
SHALL HAVE THE RIGHT TO BE REPRESENTED BY COUNSEL THAT IT SELECTS IN ANY LEGAL
PROCEEDINGS OR OTHER ACTION INSTITUTED UNDER THIS SECTION 9.2.1 BY THE OTHER
PARTY.
(F)
COOPERATION BY THE PARTIES.
IN ANY
ACTION, SUIT OR PROCEEDING INSTITUTED UNDER THIS SECTION 9.2.1, THE PARTIES
SHALL COOPERATE WITH AND ASSIST EACH OTHER IN ALL REASONABLE RESPECTS.
UPON THE
REASONABLE REQUEST OF THE PARTY INSTITUTING SUCH ACTION, SUIT OR PROCEEDING, THE
OTHER PARTY SHALL JOIN SUCH ACTION, SUIT OR PROCEEDING AND SHALL BE REPRESENTED
USING COUNSEL OF ITS OWN CHOICE, AT THE REQUESTING PARTY'S EXPENSE.
IF A PARTY
WITH THE RIGHT TO INITIATE LEGAL PROCEEDINGS UNDER THIS SECTION 9.2.1 LACKS
STANDING TO DO SO AND THE OTHER PARTY HAS STANDING TO INITIATE SUCH LEGAL
PROCEEDINGS, THEN THE PARTY WITH STANDING SHALL INITIATE SUCH LEGAL PROCEEDINGS
AT THE REQUEST AND EXPENSE OF THE OTHER PARTY.
(G)
ALLOCATION OF RECOVERIES.
ANY AMOUNTS
RECOVERED BY DS PURSUANT TO ACTIONS UNDER SECTIONS 9.2.1(B)(II) OR 9.2.1(D),
WHETHER BY SETTLEMENT OR JUDGMENT, SHALL BE
64
ALLOCATED IN THE FOLLOWING ORDER: (I) FIRST, TO REIMBURSE DS AND ARQULE FOR
THEIR REASONABLE OUT-OF-POCKET EXPENSES IN MAKING SUCH RECOVERY (WHICH AMOUNTS
SHALL BE ALLOCATED PRO RATA IF INSUFFICIENT TO COVER THE TOTALITY OF SUCH
EXPENSES); AND (II) SECOND (A) WITH RESPECT TO ACTUAL DAMAGES, TO DS AND ARQULE
IN THE *, AND (B) WITH RESPECT TO PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, *
PERCENT (*%) TO DS AND * PERCENT (*%) TO ARQULE.
ANY AMOUNTS RECOVERED BY
ARQULE PURSUANT TO ACTIONS UNDER SECTION 9.2.1(C)(II) OR 9.2.1(D) SHALL BE
ALLOCATED IN THE FOLLOWING ORDER: (X) FIRST, TO REIMBURSE ARQULE AND DS FOR
THEIR REASONABLE OUT OF POCKET EXPENSES IN MAKING SUCH RECOVERY (WHICH AMOUNTS
SHALL BE ALLOCATED PRO