Document:

exhibit10-14.htm

    
      	
              Execution
      Version

            	
              
                Exhibit 10.14

                 

                Portions of this Exhibit Have Been
Omitted and Separately Filed
      with the
Securities and Exchange Commission with a
Request for
      Confidential Treatment

              

            

    

     

     

     

     

    AMENDED AND RESTATED
DISCOVERY AND PRECLINICAL DEVELOPMENT
AGREEMENT

     

     

    By and
Between

     

     

    AVENTIS
PHARMACEUTICALS INC.

     

     

    and

     

     

    REGENERON
PHARMACEUTICALS, INC.

     

     

    Dated as of November
10, 2009

     

    

    
    

    TABLE OF CONTENTS

     

    
      	
            	
            	
            	      	Page
	 
	ARTICLE 1
	 
	DEFINITIONS
	 
	ARTICLE 2
	 
	DISCOVERY PROGRAM
	 
	2.1	      	Discovery Program	
            	12
	2.2	
            	Term of the Discovery Program	
            	13
	2.3	
            	Discovery Plans	
            	13
	2.4	
            	Target List	
            	14
	2.5	
            	Commercially Reasonable Efforts;
      Compliance with Laws	
            	16
	2.6	
            	Exchange of Information	
            	16
	2.7	
            	Further Assurances and Transaction
      Approvals	
            	16
	2.8	
            	Exclusive Discovery Program	
            	17
	2.9	
            	Tail Period	
            	20
	2.10	
            	Research Licenses; Licenses Generally	
            	20
	2.11	
            	Immunoconjugates	
            	20
	2.12	
            	Sanofi Target Licenses	
            	22
	2.13	
            	Non-Exclusive License to
Sanofi	
            	22
	2.14	
            	Invention Assignment	
            	22
	2.15	
            	Supply of VelociGene® Mice	
            	22
	2.16	
            	Option for VelocImmune® License	
            	22
	2.17	
            	Option for Additional
    Technologies	
            	23
	2.18	
            	Third Party Platform Licenses	
            	23
	 
	ARTICLE 3
	 
	JOINT RESEARCH COMMITTEE
	 
	3.1	
            	The Joint Research Committee	
            	23
	3.2	
            	Alliance Management	
            	25
	3.3	
            	Resolution of Governance
    Matters	
            	25
	3.4	
            	Obligations of the Parties and their Affiliates	
            	26
	 
	ARTICLE 4
	 
	PAYMENTS
	 
	4.1	
            	Upfront Payment; Reimbursement Payments
      for Manufacturing Expansion	
            	26

    

    i

     

    

    
    

    
      	4.2	      	Discovery Program Costs	      	27
	4.3	
            	Reports and Discovery Program Cost Payments	
            	27
	4.4	
            	**************Opt-in Payment	
            	28
	4.5	
            	Royalty Payments for Royalty Products	
            	29
	4.6	
            	Royalty Term and Reporting	
            	30
	4.7	
            	Payment Method and Currency	
            	30
	4.8	
            	Late Payments	
            	30
	4.9	
            	Taxes	
            	30
	4.10	
            	Special Adjustment	
            	31
	 
	ARTICLE 5
	 
	OPT-IN RIGHTS TO LICENSE PRODUCT
      CANDIDATES
	 
	5.1	
            	Opt-In Rights to License Product
      Candidates	
            	31
	5.2	
            	Process for Opt-In Rights	
            	31
	5.3	
            	Initial Development Plan	
            	32
	5.4	
            	Opt-In Exercise	
            	32
	5.5	
            	Dll4 and REGN 88	
            	32
	5.6	
            	Refused Candidates	
            	32
	 
	ARTICLE 6
	 
	NEWLY CREATED INVENTIONS
	 
	6.1	
            	Ownership of Newly Created Intellectual
      Property	
            	33
	6.2	
            	Prosecution and Maintenance of Patent Rights	
            	35
	6.3	
            	Third Party Claims	
            	37
	 
	ARTICLE 7
	 
	BOOKS, RECORDS AND INSPECTIONS; AUDITS
      AND ADJUSTMENTS
	 
	7.1	
            	Books and Records	
            	37
	7.2	
            	Audits and Adjustments	
            	37
	7.3	
            	IAS/IFRS/GAAP	
            	38
	 
	ARTICLE 8
	 
	REPRESENTATIONS, WARRANTIES AND
      COVENANTS
	 
	8.1	
            	Joint Representations and
      Warranties	
            	38
	8.2	
            	Knowledge of Pending or Threatened Litigation	
            	38
	8.3	
            	Additional Regeneron Representations,
      Warranties and Covenants	
            	39
	8.4	
            	Disclaimer of Warranties	
            	40

    

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      	ARTICLE 9
	 
	CONFIDENTIALITY
	 
	9.1	      	Confidential Information	      	40
	9.2	
            	Injunctive Relief	
            	41
	9.3	
            	Publications	
            	42
	9.4	
            	Disclosures Concerning this
      Agreement	
            	42
	
            	
            	 	
            	
            
	ARTICLE 10
	 
	INDEMNITY
	 
	10.1	
            	Indemnity and Insurance	
            	43
	10.2	
            	Indemnity Procedure	
            	44
	 
	ARTICLE 11
	 
	FORCE MAJEURE
	 
	ARTICLE 12
	 
	TERM AND TERMINATION
	 
	12.1	
            	Term	
            	46
	12.2	
            	Termination For Material
Breach	
            	46
	12.3	
            	Termination for Insolvency	
            	46
	12.4	
            	Termination for Breach of
      Standstill	
            	47
	12.5	
            	Termination for Breach of License and
      Collaboration Agreement	
            	47
	12.6	
            	Effect of Termination by Sanofi for
      Breach	
            	47
	12.7	
            	Effect of Termination by Regeneron for
      Breach	
            	48
	12.8	
            	Survival of Obligations	
            	48
	12.9	
            	Return of Confidential
    Information	
            	49
	12.10	
            	Special Damages	
            	49
	12.11	
            	Termination by Sanofi At Will	
            	50
	 
	ARTICLE 13
	 
	ARBITRATION
	 
	13.1	
            	Binding Arbitration	
            	50
	
            	
            	 	
            	
            
	ARTICLE 14
	 
	MISCELLANEOUS
	 
	14.1	
            	Governing Law; Submission to
      Jurisdiction	
            	51
	14.2	
            	Waiver	
            	52

    

    iii

     

    

    
    

    
      	14.3	      	Notices	      	52
	14.4	
            	Entire Agreement	
            	52
	14.5	
            	Amendments	
            	52
	14.6	
            	Interpretation	
            	52
	14.7	
            	Severability	
            	53
	14.8	
            	Assignment	
            	53
	14.9	
            	Successors and Assigns	
            	53
	14.10	
            	Affiliates	
            	53
	14.11	
            	Counterparts	
            	54
	14.12	
            	Third Party Beneficiaries	
            	54
	14.13	
            	Relationship of the Parties	
            	54
	14.14	
            	Limitation of Damages	
            	54
	14.15	
            	Non-Solicitation	
            	54
	14.16	
            	No Strict Construction	
            	54

    

    iv

     

    

    
    

    Execution
Version

     

    AMENDED AND RESTATED
DISCOVERY AND PRECLINICAL DEVELOPMENT
AGREEMENT

     

         THIS AMENDED AND RESTATED DISCOVERY AND PRECLINICAL DEVELOPMENT AGREEMENT
(“Agreement”), dated as of November 10, 2009 (the
“Effective Date”), is by and between AVENTIS PHARMACEUTICALS
INC. (“Sanofi”), a corporation organized under the laws of
Delaware, having a principal place of business at 55 Corporate Drive,
Bridgewater, New Jersey 08807, an indirect wholly owned subsidiary of
Sanofi-Aventis, a company organized under the laws of France with its principal
headquarters at 174, avenue de France, 75103 Paris, France (“Sanofi Parent”), and REGENERON PHARMACEUTICALS, INC., a
corporation organized under the laws of New York and having a principal place of
business at 777 Old Saw Mill River Road, Tarrytown, New York 10591, USA
(“Regeneron”) (with each of Sanofi and Regeneron referred
to herein individually as a “Party” and collectively as the “Parties”).

     

         WHEREAS, Sanofi and Regeneron are parties to a Discovery and Preclinical
Development Agreement dated as of November 28, 2007 (the “Original Agreement”); and

     

         WHEREAS, the Parties have undertaken a broad therapeutic antibody
discovery and development program under the Original Agreement with the
objective of identifying and validating potential drug discovery targets for the
purpose of discovering fully human monoclonal antibody product candidates
against those targets using Regeneron’s proprietary VelocImmune® and related
suite of technologies;

     

         WHEREAS, the Parties plan to expand these antibody discovery and
development efforts under the terms set forth in this Agreement;
and

     

         WHEREAS, Sanofi is interested in continuing to collaborate with Regeneron
to discover and validate potential drug discovery targets for the purpose of
discovering fully human monoclonal antibody product candidates and to receive an
option to license certain rights to the resulting fully human monoclonal
antibodies under the terms set forth in this Agreement and in the License and
Collaboration Agreement (as further defined in Article 1 below);

     

         WHEREAS, the Parties now desire to amend the Original Agreement in
accordance with Section 14.5 of the Original Agreement and restate the
amended Original Agreement as set forth in this Agreement;

     

         NOW, THEREFORE, in consideration of the following mutual promises and
obligations, and for other good and valuable consideration the adequacy and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:

     

    

    
    

    ARTICLE 1

     

    DEFINITIONS

     

         Capitalized terms used in this Agreement, whether used in the singular or
plural, except as expressly set forth herein, shall have the meanings set forth
below:

     

         “Acquired Antibody” shall mean a specific Antibody against a
Program Target in preclinical or clinical development acquired by a Party or its
Affiliate from a Third Party (other than Sanofi Pasteur or Merial Limited in the
case of Sanofi), whether such acquisition is by direct acquisition, by license
or through the acquisition of a Third Party that owns or controls the applicable
Antibody.

     

         “Affiliate” shall mean, with respect to any Person,
another Person which controls, is controlled by, or is under common control with
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract, or otherwise. Without limiting the generality of
the foregoing, a Person shall be deemed to control another Person if any of the
following conditions is met: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
of the United States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in such case
such lower percentage shall be substituted in the preceding sentence,
provided that such foreign investor has the power to
direct the management and policies of such entity. For purposes of this
Agreement, in no event shall Sanofi or any of its Affiliates be deemed
Affiliates of Regeneron or any of its Affiliates nor shall Regeneron or any of
its Affiliates be deemed Affiliates of Sanofi or any of its Affiliates. For
purposes of this Agreement, neither Sanofi Pasteur nor Merial Limited, nor any
of their respective subsidiaries or joint ventures, shall be deemed to be
Affiliates of Sanofi or any of its Affiliates. 

     

         “Agreement” shall have the meaning set forth in the
introductory paragraph, including all Schedules and Exhibits.

     

         “Alliance Manager” shall have the meaning set forth in
Section 3.2.

     

         “Annual Draft Meeting” shall have the meaning set forth in
Section 2.4(a).

     

         “Antibody” shall mean
******************************************.

     

         “Antibody Discovery Plan” shall have the meaning set forth in
Section 2.3.

     

         “Arm” shall mean
********************************************.

     

         “Available Slots” shall mean the difference between ****** and
the total number of Program Targets that were on the Rolling Target List the day
immediately preceding the Special JRC Meeting or Annual Draft Meeting, as the
case may be, as described in Section 2.4(a).

     

         “Aventis Collaboration
Agreement” shall mean the
Collaboration Agreement, dated as of September 5, 2003, by and between
sanofi-aventis US (as successor in interest to Sanofi) and Regeneron, as amended
by the First Amendment, dated as of December 31, 2004, the Second Amendment,
dated as of January 7, 2005, the Third Amendment, dated as of December 21, 2005,
the Fourth Amendment, dated as of January 31, 2006, and Section 11.2 of the
Stock Purchase Agreement, as the same may be further amended from time to
time.

     

    2

     

    

    
    

         *********************************************.

     

         “Business Day” shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York, New York, United States
or Paris, France are authorized or required by Law to remain
closed.

     

         “Collaboration Objectives” shall have the meaning set forth in
Section 2.1(b).

     

         “Commercially Reasonable
Efforts” shall mean the
carrying out of obligations or tasks by a Party in a sustained manner using good
faith commercially reasonable and diligent efforts, which efforts shall be
consistent with the exercise of prudent scientific and business judgment in
accordance with the efforts such Party devotes to products or research or
development projects owned by it of similar scientific and commercial potential.
Commercially Reasonable Efforts shall be determined on a Target-by-Target and
Antibody-by-Antibody (including MTCs) basis in view of conditions prevailing at
the time, and evaluated taking into account all relevant factors; including, but
not limited to the possibility that significant increases in the CPI over the
Term will lead to an increase in the cost of external services and a reduction
in the number of FTEs funded under the Discovery Program; which, in turn, may
adversely affect the likelihood of Regeneron achieving the Collaboration
Objectives.

     

         “Competing Refused Candidate” shall mean any Refused Candidate having the
same Target as a Licensed Product (as long as such Licensed Product is licensed
to Sanofi under the License and Collaboration Agreement at the time the
applicable Product Candidate becomes a Refused Candidate and for the duration of
time for which such Licensed Product is licensed to Sanofi under the License and
Collaboration Agreement).

     

         “Confidential Information” shall have the meaning set forth in
Section 9.1.

     

         “Contract Year” shall mean the period beginning on the
Original Agreement Effective Date and ending on December 31, 2008, and each
succeeding twelve (12) month period thereafter during the term of the Discovery
Program (except that the last Contract Year shall end on the effective date of
any termination or expiration of this Agreement).

     

         “Conventional Antibody” shall mean
***********************************.

     

         “CPI” shall mean the Consumer Price Index – All
Urban Consumers published by the United States Department of Labor, Bureau of
Statistics (or its successor equivalent index).

     

         “CPI Adjustment” shall mean the sum of (a) the percentage
increase or decrease, if any, in the CPI for the twelve (12) months ending June
30 of the Contract Year prior to the Contract Year for which the adjustment is
being made ***********************************. 

     

         “Damages” shall have the meaning set forth in
Section 10.1(a).

     

         “Default Interest Rate” shall have the meaning set forth in
Section 4.7.

     

    3

     

    

    
    

         “Disclosing Party” shall have the meaning set forth in
Section 9.1.

     

         “Discovery Expiration Date” shall mean December 31, 2017.

     

         “Discovery Program” shall mean all research and development
activities performed under the Original Agreement and to be performed under this
Agreement from Target identification, discovery and validation through the
completion of IND Preparation for Product Candidates using Regeneron’s
technologies, Mice and improvements thereto or otherwise, including,
***********, and which shall include, but not be limited to, (a) discovery
research activities directed at Target identification, validation, and
selection, (b) Antibody (including MTCs) discovery, (c) Lead Candidate
identification, characterization, pharmacological assessment (if applicable) and
selection, (d) the production of Antibodies (including MTCs) for preclinical
experiments and Phase I Clinical Trials (and such other clinical trials as may
be agreed by the Parties), and (e) IND Preparation.

     

         “Discovery Program Costs” shall mean all Out-of-Pocket Costs, FTE
Costs and Manufacturing Costs incurred by Regeneron after the Original Agreement
Effective Date directly in connection with the performance of the Discovery
Program (and, as such costs relate to a particular Licensed Product, ending on
the last day of the month preceding the month in which the Opt-In Notice for
such Licensed Product is received by Regeneron).

     

         “Effective Date” shall have the meaning set forth in the
introductory paragraph.

     

         *******************************************.

     

         “Excluded Candidates” shall mean Antibodies (including MTCs)
against Excluded Targets.

     

         “Excluded Targets” shall mean (i) Targets set forth in Schedule
2, (ii) Targets removed from the Rolling Target List pursuant to Section 2.4(b), (iii) Targets excluded or removed from the
Rolling Target List by Sanofi pursuant to Section 2.4(c), (iv) Targets of Sanofi Divested Antibodies,
(v) Targets of Sanofi Regulatory Divested Antibodies, and (vi) Program Targets
that are not included on the Target List during the Tail Period pursuant to
Section 2.9.

     

         “Executive Officers” shall mean the Chief Executive Officer of
Regeneron and the most senior Research and Development Officer of Sanofi Parent,
or their respective designees with equivalent decision-making authority with
respect to matters under this Agreement.

     

         “FDA” shall mean the United States Food and Drug
Administration and any successor agency thereto.

     

         “Force Majeure” shall have the meaning set forth in Article 11.

     

         “FTE” shall mean a full time equivalent employee
(i.e., one fully-committed or multiple partially-committed employees aggregating
to one full-time employee) employed by Regeneron (or its Affiliate) who performs
work under the Discovery Program, with such commitment of time and effort to
constitute one employee performing such work on a full-time basis, which for
purposes hereof shall be ************* per year.

     

    4

     

    

    
    

         “FTE Cost” shall mean, for all activities performed
under the Discovery Program, the product of (a) the number of FTEs performing
activities under the Discovery Program and (b) the FTE Rate.

     

         “FTE Rate” shall mean ********** in the Contract Year
ending December 31, 2009 and *********** in the Contract Year ending December
31, 2010, such amount to be adjusted as of January 1, 2011 and annually
thereafter by the CPI Adjustment.

     

         “GAAP” shall mean generally accepted accounting
principles as applicable in the United States.

     

         “Governmental Authority” shall mean any court, agency, authority,
department, regulatory body, or other instrumentality of any government or
country or of any national, federal, state, provincial, regional, county, city,
or other political subdivision of any such government or any supranational
organization of which any such country is a member.

     

         “IAS/IFRS” shall mean International Financial Reporting
Standards adopted by the International Accounting
Standards Board.

     

         “IFM” shall have the meaning set forth in
Section 2.11(d)(ii).

     

         “Immunize” or “Immunization” shall mean the introduction of an antigen to
a Mouse for the purpose of generating Antibodies against a Target.

     

         “Immunized Target List” shall mean and shall reflect those Targets
identified in Schedule 3, together with Targets for which Immunization has begun
under the Discovery Program after the Effective Date.

     

         “Immunoconjugate” shall mean an Antibody (or derivative or
fragment thereof) linked to a cytotoxic or any molecule potentially able to
enhance the therapeutic activity of such Antibody (or derivative or fragment
thereof), but excluding *********************************.

     

         “IND” shall mean, with respect to each Product
Candidate, an Investigational New Drug Application filed with the FDA with
respect to such Product Candidate pursuant to 21 C.F.R. § 312 before the
commencement of clinical trials involving such Product Candidate, including all
amendments and supplements to such application, or any equivalent filing with
any Regulatory Authority outside the United States.

     

         “IND Preparation” shall mean all drug development activities
in support of a Lead Candidate or Product Candidate up to the filing of the IND
for the Phase I Clinical Trial, including, but not limited to, assay
development, sample analysis, preclinical toxicology, preclinical
pharmacokinetics and toxicokinetics, pharmacological assessment (if applicable),
cell line development and protein chemistry sciences, formulation development,
clinical trial protocol development, IND drafting and data compilation, and
manufacturing preclinical and clinical supplies.

     

         “Indemnified Party” shall have the meaning set forth in
Section 10.2(a).

     

    5

     

    

    
    

         “Indemnifying Party” shall have the meaning set forth in
Section 10.2(a).

     

         “Initial Development Plan” shall have the meaning set forth in
Section 5.3.

     

         “Investor Agreement” shall mean the Investor Agreement, dated as
of December 20, 2007, by and between (a) Sanofi, Sanofi Parent, sanofi-aventis
US LLC, and Sanofi-Aventis Amerique du Nord and (b) Regeneron, as amended as of
the Effective Date, and as the same may be further amended from time to
time.

     

         “Joint Research Committee” or “JRC” shall mean the Joint Research Committee
described in Section 3.1(a).

     

         “Joint Inventions” shall have the meaning set forth in Section 6.1(b).

     

         “Joint Patent Rights” shall mean Patent Rights that cover a Joint
Invention.

     

         “Know-How” shall mean, with respect to each Party and
its Affiliates, any and all proprietary technical or scientific information,
data, test results, knowledge, techniques, discoveries, inventions,
specifications, designs, trade secrets, regulatory filings and other information
(whether or not patentable or otherwise protected by trade secret Law) and that
are not disclosed or claimed by such Party’s Patents or Patent
Applications.

     

         “Law” or “Laws” shall mean all laws, statutes, rules,
regulations, orders, judgments, injunctions, and/or ordinances of any
Governmental Authority in the Territory.

     

         “Lead Candidate” shall mean, for any Program Target, each
Antibody, including MTCs, that satisfies the applicable criteria set forth in
Schedule 4 and is selected by Regeneron to begin IND Preparation under this
Agreement.

     

         “License and Collaboration
Agreement” shall mean the
Amended and Restated License and Collaboration Agreement between the Parties,
dated as of the date of this Agreement, the terms of which are incorporated by
reference into, and are part of, this Agreement, as the same may be amended from
time to time.

     

         “Licensed Product” shall mean any Product Candidate for which
Sanofi has exercised its Opt-In Rights pursuant to Section 5.4 below.

     

         “Licensed Refused Sanofi
Candidate” shall have the
meaning set forth in Section 2.12.

     

         “Manufacturing Cost” shall mean the fully burdened cost (without
mark-up) of manufacturing Product Candidates and Lead Candidates for preclinical
activities and Phase I Clinical Trials (and, if agreed by the Parties other
clinical trials), and the cost for providing dedicated manufacturing capacity
for Lead Candidates and Product Candidates, in each case, as calculated in
accordance with Schedule 5.

     

         “Maximum Annual Discovery Program
Costs” shall have the
meaning set forth in Section 4.2.

     

    6

     

    

    
    

         “Mice” or “Mouse” shall mean
***********************.

     

         “Mice-Derived Therapeutic (or Diagnostic)
Candidate” or
“MTC” shall mean
*************************************.

     

         “Modified Clause” shall have the meaning set forth in
Section 14.7.

     

         “Net Sales” shall mean the gross amount invoiced for
bona fide arms’ length sales of Royalty Products in the Territory by or on
behalf of a Party, or its Affiliates or sublicensees to Third Parties, less the
following deductions, determined in accordance with IAS/IFRS (or GAAP for the
US) consistently applied:

     

                   (a) normal and customary trade, cash, quantity and free-goods allowances
granted and taken directly with respect to sales of such Royalty
Products;

     

                   (b) amounts repaid or credited by reason of defects, rejections, recalls,
returns, rebates, allowances and billing errors;

     

                   (c) chargebacks and other amounts paid on sale or dispensing of Royalty
Products;

     

                   (d) Third Party cash rebates and chargebacks related to sales of Royalty
Products, to the extent allowed;

     

                   (e) retroactive price reductions that are actually allowed or
granted;

     

                   (f) compulsory refunds, credits and rebates directly related to the sale of
Royalty Products, accrued, paid or deducted pursuant to agreements (including,
but not limited to, managed care agreements) or governmental
regulations;

     

                   (g) freight, postage, shipment and insurance costs (or wholesaler fees in
lieu of those costs) and customs duties incurred in delivering Royalty Products
that are separately identified on the invoice or other
documentation;

     

                   (h) sales taxes, excess duties, or other consumption taxes and compulsory
payments to Governmental Authorities or other governmental charges imposed on
the sale of Royalty Products, which are separately identified on the invoice or
other documentation;

     

                   (i) as agreed by the Parties, any other specifically identifiable costs or
charges included in the gross invoiced sales price of such Royalty Product
falling within categories substantially equivalent to those listed above and
ultimately credited to customers or a Governmental Authority or agency
thereof;

     

                   (j) invoiced amounts that are written off as uncollectible in accordance with
a Party’s or its Affiliates’ or sublicensees’ respective accounting principles
as applied consistently Net Sales
in currency other than United States Dollars shall be translated into United
States Dollars according to the provisions of Section 4.7 of this Agreement. 

     

    7

     

    

    
    

    Sales between the
Parties, or between the Parties and their Affiliates or sublicensees, for
resale, shall be disregarded for purposes of calculating Net Sales. Any of the
items set forth above that would otherwise be deducted from the invoice price in
the calculation of Net Sales but which are separately charged to, and paid by,
Third Parties shall not be deducted from the invoice price in the calculation of
Net Sales. In the case of any sale of a Royalty Product for consideration other
than cash, such as barter or countertrade, Net Sales shall be calculated on the
fair market value of the consideration received as agreed by the Parties. Solely
for purposes of calculating Net Sales, if a Party or its Affiliates or
sublicensee sells such Royalty Products in the form of a combination product
containing any Royalty Product and one or more active ingredients (whether
combined in a single formulation or package, as applicable, or formulated or
packaged separately but sold together for a single price in a manner consistent
with the terms of this Agreement) (a “Combination Product”), then prior to the first commercial sale of
such Combination Product, the Parties shall agree on the value of each component
of such Combination Product and the appropriate method for accounting for sale
of such Combination Product. For the avoidance of doubt, for the purposes of
this Agreement, Immunoconjugates shall not be deemed Combination
Products.

     

         “Original Agreement Effective
Date” shall mean November
28, 2007.

     

         “Opt-In Notice” shall have the meaning set forth in
Section 5.4.

     

         “Opt-In Period” shall have the meaning set forth in
Section 5.4.

     

         “Opt-In Report” shall have the meaning set forth in
Section 5.2.

     

         “Opt-In Rights” shall have the meaning set forth in
Section 5.1.

     

         “Out-of-Pocket Costs” shall mean costs and expenses paid to Third
Parties (or payable to Third Parties and accrued in accordance with GAAP) by
Regeneron (or its Affiliate) directly in connection with the performance of the
Discovery Program.

     

         “Party” or “Parties” shall have the meaning set forth in the
introductory paragraph.

     

         “Patent Application” shall mean any application for a
Patent.

     

         “Patent Rights” shall mean unexpired Patents and Patent
Applications.

     

         “Patents” shall mean patents together with all
substitutions, divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions, registrations, patent term adjustments or
extensions, supplemental protection certificates and renewals of any of the
foregoing, and all counterparts thereof in any country in the
Territory.

     

         “Person” shall mean and include an individual,
partnership, joint venture, limited liability company, corporation, firm, trust,
unincorporated organization and government or other department or agency
thereof.

     

    8

     

    

    
    

         “Phase I Clinical Trial” shall mean the first clinical trial of a
Product Candidate following IND Preparation.

     

         “Product Candidate” shall mean any Lead Candidate that
substantially completes IND Preparation and is ready to be offered for license
to Sanofi under the Opt-In Rights.

     

         “Product Patent Rights” shall mean any Patent or Patent Application
having a specification which supports a claim that may be infringed by making,
using, selling, importing or exporting a Lead Candidate or Product Candidate in
the Discovery Program, including, without limitation, any derivatives,
fragments, compositions of matter or uses, thereof. 

     

         “Program Targets” shall mean all Targets on the Target
List.

     

         “Publishing Party” shall have the meaning set forth in
Section 9.3.

     

         “Receiving Party” shall have the meaning set forth in
Section 9.1.

     

         “Refused Candidate” shall have the meaning set forth in
Section 5.6 (i).

     

         “Regeneron” shall have the meaning set forth in the
introductory paragraph.

     

         “Regeneron Indemnitees” shall have the meaning set forth in Section 10.1(a).

     

         “Regeneron Intellectual
Property” shall mean the
Regeneron Patent Rights and the Regeneron Know-How.

     

         “Regeneron Know-How” shall mean any and all Know-How as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Regeneron or any of its
Affiliates (other than Sanofi Know-How and Know-How included in Joint
Inventions) with the right to sublicense the same necessary or useful for the
performance of the Discovery Program.

     

         “Regeneron Next Generation
Technology” shall mean
*************************.

     

         “Regeneron Patent Rights” shall mean those Patent Rights as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Regeneron or any of its
Affiliates (other than Sanofi Patent Rights and Patent Rights included in Joint
Inventions) with the right to sublicense the same and which include at least one
(1) claim which would be infringed by the research, development, manufacture or
use of the Mice or any Target, Antibody (including any MTC), Lead Candidate or
Product Candidate in the Discovery Program.

     

         “Regeneron Sole Inventions” shall have the meaning set forth in
Section 6.1(a).

     

         “Regeneron Target IP” shall mean only those claims in Patent
Rights within the Regeneron
Patent Rights in existence on the termination of the Discovery Program which
would be infringed by the making, using, developing, selling, or importing of an
Antibody (including a MTC) discovered in the Discovery Program against a Program
Target *************************************.

     

    9

     

    

    
    

         “Regulatory Authority” shall mean any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity anywhere in the world with authority over the
activities conducted under the Discovery Program. 

     

         “Rolling Target List” shall mean the rolling list of Targets
designated for Immunization under the Discovery Program over a two-Contract Year
period, as initially prepared and thereafter revised in accordance with
Section 2.4. 

     

         “Royalty Product” shall mean
***************************************.

     

         “Royalty Term” shall have the meaning set forth in
Section 4.5. 

     

         “Sanofi” shall have the meaning set forth in the
introductory paragraph. 

     

         “Sanofi Divested Antibody” shall have the meaning set forth in
Section 2.8(b)(iii). 

     

         “Sanofi Indemnitees” shall have the meaning set forth in
Section 10.1(b). 

     

         “Sanofi Intellectual
Property” shall mean the
Sanofi Patent Rights and the Sanofi Know-How. 

     

         “Sanofi Know-How” shall mean any and all Know-How as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program (including the Tail Period) owned by, licensed to or otherwise held by
Sanofi or any of its Affiliates (other than Regeneron Know-How and Know-How
included in Joint Inventions) with the right to sublicense the same necessary or
useful for the performance of the Discovery Program.

     

         “Sanofi Patent Rights” shall mean those Patent Rights as of the
Original Agreement Effective Date or thereafter during the term of the Discovery
Program owned by, licensed to or otherwise held by Sanofi or any of its
Affiliates (other than Regeneron Patent Rights and Patent Rights included in
Joint Inventions) with the right to sublicense the same and which include at
least one (1) claim which would be infringed by the research, development,
manufacture or use of the Mice or any Target, Antibody (including any MTC), Lead
Candidate or Product Candidate in the Discovery Program. 

     

         “Sanofi Regulatory Divested
Antibody” shall have the
meaning set forth in Section 2.8(b)(v). 

     

         “Sanofi Sole Inventions” shall have the meaning set forth in
Section 6.1(a). 

     

         “Sanofi Sole Projects” shall have the meaning set forth in
Section 2.8(b)(iii). 

     

         “Sanofi Targets” shall have the meaning set forth in Section 2.4.

     

    10 

     

    

    
    

         “Sanofi Target IP” shall mean only those claims in Patent
Rights within the Sanofi Patent Rights in existence on the termination of the
Discovery Program, including the Tail Period, which would be infringed by the
making, using, developing, selling, or importing of (a) any Licensed Refused
Sanofi Candidate (*************************), (b) any Sanofi Divested Antibody
(*******************************), (c) any Failed MTC as referred to in Section
2.11(c) or ***************** as referred to in Section 2.11(b), (d) any Sanofi
Regulatory Divested Antibody (**********************************), (e) in the
case of Section 12.8, any Antibody (including any MTC) discovered in the
Discovery Program against a Program Target (******************************),
or(f) any MTC (and, if applicable, any other Antibody) referred to in Section
12.11(b) (*****************************), as the case may be. For the avoidance
of doubt, the parenthetical references in (a), (b), (d), (e), and (f) above are
included to limit the Patent Rights ************************** to only those
Patent Rights that would ******************************. These parenthetical
references do not limit other Patent Rights included in this definition. “Sole
Inventions” shall have the meaning set forth in Section 6.1(a).

     

         “Solely Developed
Immunoconjugate” shall
have the meaning set forth in Section 2.11(b). 

     

         “Special JRC Meeting” shall have the meaning set forth in
Section 2.4(a).

     

         “Stock Purchase Agreement” shall mean the Stock Purchase dated as of
the Original Agreement Effective Date by and between (a) Sanofi, sanofi-aventis
US LLC, and Sanofi-Aventis Amerique du Nord and (b) Regeneron.

     

         “Tail Period” shall have the meaning set forth in
Section 2.9. 

     

         “Target” shall mean any gene, receptor, ligand, or
other molecule (a) potentially associated with a disease activity, and (b) which
potentially has a biological activity that is modified by direct interaction
with an Antibody, including any MTC, or (c) to which an Antibody, including any
MTC, binds, ***********************************. 

     

         “Target Discovery Plan” shall have the meaning set forth in
Section 2.3. 

     

         “Target List” shall mean the list of Targets on the
Rolling Target List and the Immunized Target List, but excluding Excluded
Targets. 

     

         “Term” shall have the meaning set forth in Section 12.1.

     

         “Territory” shall mean all the countries and territories
of the world. 

     

         “Third Party” shall mean any Person other than Sanofi or
Regeneron or any Affiliate of either Party. 

     

         “Third Party Opportunities” shall have the meaning set forth in
Section 2.8(a)(ii). 

     

         “Valid Claim” shall mean a claim of an issued and
unexpired Patent (including the term of any patent term extension, supplemental
protection certificate, renewal or other extension) which has not been held
unpatentable, invalid or unenforceable in a final decision of a court or
other Government Authority of
competent jurisdiction from which no appeal may be or has been taken, and which
has not been admitted to be invalid or unenforceable through reissue,
reexamination, disclaimer or otherwise. 

     

    11 

     

    

    
    

    ARTICLE 2 

     

    DISCOVERY PROGRAM 

     

              2.1 Discovery Program. (a) From the Effective Date, the objective
of the Parties during the Discovery Program is for Regeneron to discover,
identify and/or validate Targets from which Regeneron shall select Targets for
the Rolling Target List, generate MTCs (and, if agreed to by the JRC, other
Antibodies) against Program Targets (including Program Targets that are Sanofi
Targets) from which to select Lead Candidates, and develop such Lead Candidates
through IND Preparation to offer to Sanofi for joint development and
commercialization under the terms set forth herein and in the License and
Collaboration Agreement. During the first ten (10) Contract Years, Regeneron
will use Commercially Reasonable Efforts to discover, identify and validate
Targets as part of the Discovery Program. The Parties will select Targets for
the Rolling Target List pursuant to Section 2.4.
*****************************************************. Regeneron will use
Commercially Reasonable Efforts to generate MTCs (and if agreed by the JRC,
other Antibodies) against Program Targets and manufacture preclinical and
clinical supplies of the Lead Candidates and Product Candidates for the
Discovery Program and Phase 1 Clinical Trials. The JRC will evaluate and
prioritize Program Targets. Subject to the JRC’s prioritization of Program
Targets, Sanofi’s Target selection and exclusion rights under Section 2.4, and the other terms of this Agreement,
Regeneron will have sole responsibility for the design and conduct of all
activities under the Discovery Program, including, without limitation, decisions
relating to initiation and termination of programs and activities, manufacturing
activities, and staffing and resource allocation between different programs and
activities in the Discovery Program. The JRC will also prioritize the
Antibodies, including MTCs, to be further pursued as Lead Candidates, and
Regeneron will commence IND Preparation activities only for those Antibodies,
including MTCs, that meet the applicable criteria set forth in Schedule 4.
Sanofi shall be responsible for completing relevant portions of Schedule 4 for
all Sanofi Targets at the time that such Target is selected for the Rolling
Target List to the extent such information is not available at Regeneron.
Sanofi, through the JRC, will provide consultation and advice to support
Regeneron’s efforts. Neither
Regeneron nor Regeneron’s representative on the JRC shall have the right to
discriminate against Sanofi Targets without the agreement of Sanofi’s
representatives on the JRC. 

     

                   (b) In addition to the broad objectives of the Parties set forth in
Section 2.1(a), above, commencing from Contract Year 3
(January 1, 2010) and except as set forth in Section 4.9, the annual objectives of the Discovery
Program for each Contract Year through the Discovery Expiration Date (the
“Collaboration Objectives”) are *************************. Regeneron
shall use Commercially Reasonable Efforts to achieve the Collaboration
Objectives. For the avoidance of doubt, (i) nothing in the preceding sentence
shall require Regeneron to use efforts beyond the FTEs and Out-of-Pocket Costs
reimbursed by Sanofi under this Agreement, and (ii) if Regeneron exercises
Commercially Reasonable Efforts to achieve the Collaboration Objectives, then the failure to achieve the
Collaboration Objectives shall not be considered a breach of this Agreement.

     

    12 

     

    

    
    

                   (c) As part of the Discovery Program, Regeneron may
**********************************.

     

              2.2 Term of the Discovery
Program. The Discovery
Program commenced on the Original Agreement Effective Date and shall end on
December 31, 2017 unless (a) this Agreement is earlier terminated in accordance
with Article 12, in which event the Discovery Program shall
end on the effective date of such termination or (b) extended by Sanofi for the
Tail Period pursuant to the terms of Section 2.9 in which event the Discovery Program shall
end upon the earlier of the expiration of the Tail Period or the earlier
termination of this Agreement.

     

              2.3 Discovery Plans. Regeneron will annually prepare a
“Target Discovery Plan” and an “Antibody Discovery Plan” for the Discovery Program.

     

                   (a) The Target Discovery Plan shall set forth the overall strategy, plan and
goals over the next Contract Year for identifying and validating Targets from
which Regeneron shall choose its Targets for the Rolling Target List; it being
understood that the Target Discovery Plan will not include information on the
identity of Targets that are the subject of Regeneron’s discovery research
activities under the Discovery Program that have not yet been selected as
Program Targets. The Target Discovery Plan will also include an estimated budget
for the portion of the Discovery Program covered by the Target Discovery Plan
for the ensuing Contract Year. Regeneron will submit each Target Discovery Plan,
including the estimated budget, to the JRC for review and comment.

     

                   (b) The Antibody Discovery Plan shall set forth the overall strategy and
plans over the next Contract Year for generating Antibodies against Program
Targets, conducting research on Program Targets and Antibodies generated against
Program Targets, and preclinically developing Antibodies under the Discovery
Program through IND Preparation. The Antibody Discovery Plan will also include
an estimated budget for the portion of the Discovery Program covered by the
Antibody Discovery Plan for the ensuing Contract Year. Regeneron will submit
each Antibody Discovery Plan, including the estimated budget, to the JRC for
review and comment. For each Lead Candidate, the Antibody Discovery Plan will
include activities and a planned timeline for IND Preparation. Regeneron shall
consider in good faith comments on the Antibody Discovery Plan from Sanofi’s
representatives on the JRC.

     

                   (c) Except for the initial Target Discovery Plan and Antibody Discovery Plan
(which will be provided to the JRC within ninety (90) days of the Effective
Date), Regeneron will present an updated Target Discovery Plan and Antibody
Discovery Plan to the JRC at least two (2) months prior to the end of each
Contract Year.

     

    13 

     

    

    
    

              2.4 Target List. 

     

                   (a) Subject to the other terms of this Section
2.4, (i) the Rolling
Target List will include up to ************* designated for Immunization in each
two-consecutive Contract Year period, and ********************************* (all
such Targets selected by Sanofi for the Rolling Target List pursuant to this
Section
2.4 being referred to as
“Sanofi Targets”). The Parties shall conduct a meeting of the
JRC within ten (10) Business Days of the Effective Date (the “Special JRC Meeting”) to ***********************************. The
Rolling Target List will be updated on an annual basis at a meeting of the JRC
to be held in January of each Contract Year, commencing in 2010 and ending in
2017 (the “Annual Draft Meeting”). At least thirty (30) days prior to the
Annual Draft Meeting to be held in 2017, Regeneron shall provide to Sanofi
information on the identity and status of Targets validated by Regeneron under
the Discovery Program that were not previously selected as Targets on to the
Rolling Target List. Targets on the Rolling Target List are progressed from the
Rolling Target List to the Immunized Target List at commencement of
Immunization. Any Targets on the Rolling Target List which have not progressed
to the Immunized Target List during a Contract Year shall remain on the Rolling
Target List, subject to Sections 2.4(b), 2.4(c), and 2.8 below. At each Annual Draft Meeting, the
Parties shall select Targets for the Available Slots to bring the total number
of Targets on the Rolling Target List back to ********. At the Special JRC
Meeting and each Annual Draft Meeting, the Parties shall alternate selecting
Targets for the Available Slots on the Rolling Target List, with Sanofi
designating first, Regeneron second and the process repeating until Sanofi has
selected as many Targets as it desires up to
*************************************. Regeneron shall designate all Targets for
the Available Slots remaining after Sanofi’s selections pursuant to this Section 2.4(a). For
clarity, an Excluded Target cannot be selected onto the Rolling Target List
without the mutual consent of the Parties. All Targets selected by the Parties
for the Rolling Target List pursuant to this Section 2.4 shall be identified by their HUGO name, if
applicable.

     

                   (b) Targets may be removed from the Rolling Target List or replaced by new
Targets at any time prior to Immunization by the mutual written consent of the
Parties. Targets removed (either by removal or replacement) from the Rolling
Target List pursuant to this Section 2.4(b) shall become Excluded Targets. Each Party
shall have the right to select up to **************** to be added to the Rolling
Target List outside the applicable Annual Draft Meeting at any time during each
Contract Year (such Party being a “Pre-Selecting
Party”). The applicable Pre-Selecting Party shall be considered to have
included the applicable Target(s) onto the Rolling Target List upon its written
notice to the other Party. Unless the Target selected by the Pre-Selecting Party
is excluded or removed from the Rolling Target List pursuant to Section 2.4(c) or Section 2.8, it shall be considered one of the Targets
selected by the Pre-Selecting Party for the Rolling Target List at the next
scheduled Annual Draft Meeting and the number of Targets the Pre-Selecting Party
may select for the Available Slots at such Annual Draft Meeting shall be reduced
accordingly. In addition, Regeneron shall have the right to replace a Target
removed from the Rolling Target List by Sanofi pursuant to Section 2.8 at any time during each Contract Year upon
written notice to Sanofi.

     

                   (c) Sanofi shall have the right to exclude from the Rolling Target List a
Target selected by Regeneron for the Rolling Target List as provided in Section 2.4(c)(i), and shall have the
right to remove a Program Target from the Target List, as provided in
Sections 2.4(c)(ii) and (iii).

     

    14 

     

    

    
    

                  
(i) Sanofi shall have the right to exclude from the Rolling Target List a
Target selected by Regeneron for the Rolling Target List (a “Regeneron Selected Target”) if at the time of selection by Regeneron of
such Regeneron Selected Target either (A) Sanofi or its Affiliate has an
existing Antibody against the
Regeneron Selected Target that is ****************, (B) Sanofi or its Affiliate
has *****************************, or (C) Sanofi or its Affiliate has
**************** or has ********************. With respect to its exclusion
rights under Section 2.4(c)(i)(C), Sanofi may neither ************ for the
Rolling Target List in any Contract Year, nor ******************* over any
rolling three (3) Contract Year period. Sanofi must notify Regeneron of its
exclusion pursuant to this Section 2.4(c)(i) within ten (10) Business Days of
the Annual Draft Meeting or Special JRC Meeting at which Regeneron selects the
applicable Regeneron Selected Target or Sanofi’s receipt of written notice from
Regeneron regarding Regeneron’s selection of a Regeneron Selected Target
pursuant to Section 2.4(b) above or this Section 2.4(c)(i). Sanofi’s exclusion
of a Regeneron Selected Target pursuant to this Section 2.4(c)(i) must be
followed promptly by written notice to Regeneron that describes the condition in
either (A), (B), or (C) above that has been met supporting the Target exclusion.
Regeneron shall have ten (10) Business Days from the exclusion of a Target under
this Section 2.4(c) to select replacement Regeneron Selected Target(s) for the
Rolling Target List under Section 2.4(a) or Section 2.4(b), as the case may be,
in which case the terms of this Section 2.4(c) shall remain in
effect.

     

                   (ii) Sanofi shall have the
right to remove a Target from the Rolling Target List upon written notice to
Regeneron if, ******************************** Regeneron has failed to progress
a Target to the Immunized Target List. Sanofi shall have thirty (30) days from
the Third Anniversary Date to exercise its right to remove the applicable Target
from the Rolling Target List under this Section 2.4(c)(ii). 

     

                   (iii) Sanofi shall have the
right to remove a Program Target from the Immunized Target List upon written
notice to Regeneron if, **************************************** Regeneron is no
longer actively working on Antibodies against the applicable Target under the
Discovery Program, or (B) *************************************, Regeneron has
failed to submit an Opt-In Report for a Product Candidate against such Program
Target. Sanofi shall have thirty (30) days from the applicable
********************** to exercise its right to remove the applicable Program
Target from the Immunized Target List under this Section 2.4(c)(iii).

     

                   (d) Within sixty (60) days
after the end of Contract Year 5 (ending December 31, 2012), the Executive
Officers of both Parties may agree that the maximum percentage of Targets that
Sanofi may select for the Rolling Target List should change
**********************************. In deciding whether to make such a change,
the Executive Officers shall take into consideration, among other criteria
agreed to by the Executive Officers, ************************************. If
the Executive Officers both agree to change the maximum percentage of Targets
Sanofi may select for the Rolling Target List, then the Parties will promptly
enter into an amendment to this Agreement solely for the purpose of amending the
terms of Section 2.4(a) to reflect the new agreed upon percentage for
each of the remaining Contract Years for which the Rolling Target List has not
been designated. 

     

    15 

     

    

    
    

              2.5 Commercially Reasonable Efforts; Compliance
with Laws. During the term
of the Discovery Program, Regeneron will use Commercially Reasonable Efforts to
discover and develop Product Candidates to offer for license to Sanofi pursuant
to the Opt-In Rights. Without limiting the foregoing, Regeneron will use
Commercially Reasonable Efforts to identify Lead Candidates and complete IND
Preparation for Lead Candidates in a timely manner during the term of the
Discovery Program. Each Party hereby covenants and agrees to comply with
applicable Laws in performing activities connected with the Discovery Program.

     

              2.6 Exchange of Information. Regeneron will share information with the
JRC in a timely manner concerning the progress of the Target Discovery Plan and
the Antibody Discovery Plan consistent with Sections 2.3 and 3.1(b). Without limiting the foregoing, at least
five (5) calendar days prior to each regular quarterly meeting of the JRC,
Regeneron will use its Commercially Reasonable Efforts to provide to Sanofi’s
representatives on the JRC a written report (in electronic form) summarizing the
material activities undertaken by Regeneron in connection with the Target
Discovery Plan and the Antibody Discovery Plan, including information concerning
new Program Targets, Lead Candidates and Product Candidates. Sanofi shall have
the right to reasonably request and to receive in a timely manner clarifications
and answers to questions with respect to such reports (other than with respect
to the identity and progress of Targets in the Target Discovery Plan which are
not Program Targets) and any other data and any other information it reasonably
requests with respect to the conduct of the Target Discovery Plan and the
Antibody Discovery Plan.

     

              2.7 Further Assurances and Transaction
Approvals. Upon the terms
and subject to the conditions hereof, each of the Parties will use Commercially
Reasonable Efforts to (a) take, or cause to be taken, all actions necessary,
proper or advisable under applicable Laws or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (b) obtain from the
requisite Governmental Authorities any consents, licenses, permits, waivers,
approvals, authorizations, or orders required to be obtained or made in
connection with the authorization, execution, and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement, and (c)
make all necessary filings, and thereafter make any other advisable submissions,
with respect to this Agreement and the transactions contemplated by this
Agreement required under applicable Laws. The Parties will cooperate with each
other in connection with the making of all such filings, including by providing
copies of all such non-confidential documents to the other Party and its
advisors prior to the filing and, if requested, by accepting all reasonable
additions, deletions, or changes suggested in connection therewith. Each Party
will furnish all information required for any applicable or other filing to be
made pursuant to the rules and regulations of any applicable Laws in connection
with the transactions contemplated by this Agreement. 

     

    16

     

    

    
    

              2.8 Exclusive Discovery Program.

     

                   (a) Exclusivity.

     

                   (i) General. Subject to the other subparagraphs in this
Section 2.8, until the end of the Term, neither Party nor
any of their respective Affiliates will either directly, or with any Third
Party, work to discover Antibodies against, or develop or commercialize
Antibodies against, Program Targets in the Territory, except pursuant to this Agreement or the
License and Collaboration Agreement. Furthermore, subject to the other
subparagraphs in this Section 2.8, until the earlier to occur of (A) the
Discovery Expiration Date, and (B) the effective termination of this Agreement,
neither Regeneron nor any of its Affiliates will, either directly or with any
Third Party, work to discover, develop or commercialize Antibodies in the
Territory, except pursuant to this Agreement or the License and Collaboration
Agreement. Solely as used in this Section 2.8(a) and in Section 2.8(b), the terms “develop,” “developing” or
“development” shall mean any and all activities related to Antibody discovery
and Antibody preclinical and clinical development. In the event this Agreement
is terminated early pursuant to Sections 12.2, 12.3, 12.4, 12.5, or 12.11, the obligations stated in this Section 2.8(a) shall also terminate as of the effective date
of such early termination.

     

                   (ii) Third Party Opportunities. Subject to the other sub-paragraphs in this
Section 2.8, as part of the Discovery Program, the
Parties may evaluate new Targets, Antibodies, and antibody technologies owned or
controlled by Third Parties (“Third Party Opportunities”) to determine whether such Targets,
Antibodies or antibody technologies should be licensed or acquired by the
Parties for the Discovery Program. Should a Party identify such a Third Party
Opportunity that it is interested
in acquiring or licensing for inclusion in the Discovery Program, it shall
notify the other Party for consideration and discussion. If the Parties approve
the inclusion of such Third Party Opportunity in the Discovery Program, the
Parties shall decide which Party will license or otherwise acquire rights to the
Third Party Opportunity and include the applicable Target, Antibody or antibody
technology, as the case may be, in the Discovery Program. If the applicable
Third Party Opportunity is licensed or acquired *******************************
with respect to the conduct of the Discovery Program as being conducted at the
time of such license or acquisition (such licenses being governed by Section
2.18 hereof) *******************************except that, at Regeneron’s option,
its share, or a portion of its share, of such costs shall be included in
Out-of-Pocket Costs under this Agreement and applied to the calculation of the
Maximum Annual Discovery Program Costs for one or more years as the Parties may
agree.

     

                   (b) Exclusions.

     

                   (i) Excluded Candidates. Each Party (and its Affiliates) shall have
the right to develop and commercialize Excluded Candidates either on its own or
with Third Parties outside the Discovery Program without restriction under this
Agreement; provided that Sanofi shall have no rights under this Agreement to any
Excluded Candidates developed under the Discovery Program. Regeneron shall have
and retain exclusive rights to any such Excluded Candidates developed in the
Discovery Program against such Excluded Target without restrictions under this
Agreement, subject to the royalty obligations set forth in Section 4.5. Regeneron may continue to develop and
commercialize (on its own or with one or more Third Parties) any such MTCs or
other Antibodies (or any Acquired
Antibodies of Regeneron) against Excluded Targets and may practice and use any
Regeneron Intellectual Property, including, without limitation, the Mice, in
connection with the development of Antibodies against Excluded
Targets.

     

    17 

     

    

    
    

                   (ii) Refused Candidates. Regeneron (and its Affiliates) shall have
the right to develop and commercialize Refused Candidates outside the Discovery
Program as set forth in Section 5.6 below,
**********************. 

     

                   (iii) Sanofi Acquired Antibodies. Sanofi and its Affiliates shall have the
right to develop and commercialize Acquired Antibodies that are the subject of
filed INDs, whether such acquisition is by direct acquisition, by license or
through acquisition of a Third Party) (a “Sanofi Acquired Antibody”), even if such Sanofi Acquired Antibodies
are against Program Targets. Sanofi shall promptly notify Regeneron of any such
acquisition or license (including the identity of the Program Target), and may
continue the development of such Sanofi Acquired Antibody without restriction
outside the Discovery Program and this Agreement. In the event of such an
acquisition or license, unless otherwise agreed to by the Parties, the
applicable Program Target shall be considered an Excluded Target and Sanofi
shall no longer have any rights to any Excluded Candidates against such Excluded
Target developed under this Agreement (such Antibodies being referred to herein
as “Sanofi Divested Antibodies”). Regeneron may develop and commercialize
(on its own or with one or more Third Parties) any Sanofi Divested Antibodies or
other Excluded Candidates against such Excluded Targets, and may practice and
use any Regeneron Intellectual Property, including, without limitation, the
Mice, in connection with such activities without restrictions under this
Agreement, subject to the royalty obligations set forth in Section 4.5. Until the time of IND filing for a Sanofi
Divested Antibody, Regeneron shall have the right to consider development of
Sanofi Divested Antibodies against the applicable Excluded Target as development
under the Discovery Program solely for purposes of seeking reimbursement of
Discovery Program Costs pursuant to Section 4.2.

     

                   (iv) Company Acquisitions For clarification, where a Party or its
Affiliate acquires rights to an Acquired Antibody by the acquisition of a Third
Party or part or the whole of its business, the applicable acquiring Party may
as an alternative to any obligations herein, divest such Acquired Antibody (by
sale or license) **********************************. 

     

                   (v) Regulatory Divestitures. In the event that Sanofi acquires rights to
an Acquired Antibody as a result of its acquisition of a Third Party and
believes, based on the reasonable advice of its outside legal counsel, that it
is required by Law to divest its interest in the Antibodies against a Program
Target, then Sanofi shall have the right to exclude such Program Target from the
Discovery Program, and develop and commercialize such Acquired Antibodies
against such Program Target outside the Discovery Program and the terms of this
Agreement. Sanofi shall no longer have any rights to any Antibodies, including
MTCs, against such Program Target under this Agreement (“Sanofi Regulatory
Divested
Antibodies”) other than
rights to future royalties pursuant to Section 4.5(iv); however, such Sanofi
Regulatory Divested Antibodies shall be considered in the Discovery Program
solely for purposes of Section 4.2 until the earlier to occur of either (y) the
time of any IND filing for the applicable Product Candidate or (z) twelve (12)
months from the date Sanofi divests its interest in the applicable Antibody in
the Discovery Program. ***************************. Either Party shall have the
right to develop and commercialize Antibodies against Target(s) of the Sanofi
Regulatory Divested Antibodies outside the Discovery Program and the terms of
this Agreement, and Regeneron shall have and retain exclusive rights to any
Antibodies, including MTCs, discovered under the Discovery Program against such
Program Target(s) without restrictions under this Agreement.

     

    18 

     

    

    
    

                   (vi) Technology Licenses. Regeneron shall have the right to grant
non-exclusive licenses to its Mice and other Regeneron Intellectual Property
related to the Mice (and related technologies) and Regeneron Next Generation
Technology to Third Parties, including, without limitation, universities and for
profit and not-for-profit Third Parties, provided that (A)
********************************************. Regeneron may receive contract
fees, milestones, and royalties based on future sales of Antibodies discovered
by such Third Party licensees. In addition, under the terms of such license
agreements where Regeneron retains a license to develop and commercialize MTCs
discovered by such Third Parties, ******************************************
such decision shall not be subject to Section 3.3 and shall not be unreasonably
delayed. In the event that Sanofi’s representatives on the JRC reject any such
MTC from inclusion in the Discovery Program, Regeneron shall have the right to
develop and commercialize such MTC without restrictions under this Agreement
outside the Discovery Program and this Agreement. If Sanofi’s representatives on
the JRC agree to include these MTCs in the Discovery Program,
**********************.

     

                   (vii) **********************. Subject to the terms of Section 4.5, the Parties
may develop and commercialize the following Antibodies outside of the Discovery
Program and without restriction under this Agreement (subject to the royalty
obligations set forth in Section 4.5): *******************.

     

                   (viii) ************. Nothing in Section 2.8(a) shall limit or restrict either
Party or its Affiliate from developing and commercializing
******************************. However, in the case of Regeneron, during the
period referred to in the second sentence of Section 2.8(a)(i), the Target
****************************** must be an Excluded Target.

     

    19 

     

    

    
    

              2.9 Tail Period. At Sanofi’s sole option, upon prior written
notice to Regeneron, such notice to be delivered no later than June 30, 2017
(the “Tail Period
Notice Date”), the term of the Discovery Program may be
extended for up to three (3) additional years (as designated by Sanofi in its
notice) (the “Tail Period”). If Sanofi fails to provide such written
notice by the applicable Tail
Period Notice Date, the Discovery Program shall expire on December 31, 2017. Sanofi shall identify in
its written notice the specific Program Targets, Lead Candidates, and Product
Candidates to be included in the Discovery Program during the Tail Period. All
Program Targets not listed in this notice shall be considered Excluded Targets
as of January 1, 2018. Within ninety (90) days of receipt of Sanofi’s notice,
the Parties shall agree on a plan and budget (which shall be on a cost basis) to
perform the activities set forth below and as requested by Sanofi to be carried
out for each Contract Year of the Tail Period. In the event the Parties do not
agree on the commercial reasonableness of such budget, then such dispute shall
be referred to binding arbitration pursuant to the provisions of Article 13. During the Tail Period, Regeneron will use
Commercially Reasonable Efforts **************************.

     

              2.10 Research Licenses; Licenses
Generally. Each Party
hereby grants to the other Party and its Affiliates a non-exclusive,
non-transferable, worldwide, royalty-free, research license, without the right
to sublicense, under the Regeneron Intellectual Property and the Sanofi
Intellectual Property, respectively, solely to perform the Discovery Program.
For the avoidance of doubt, neither Party shall use the licenses granted in this
Section 2.10 for the benefit, directly or indirectly, of
any Third Party. Except as expressly provided for herein, nothing in this
Agreement grants either Party any right, title or interest in and to the
intellectual property rights of the other Party (either expressly or by
implication or estoppel). Except as expressly provided for in this Section 2.10 or elsewhere in this Agreement, neither Party
will be deemed by this Agreement to have been granted any license or other
rights to the other Party’s Patent Rights or Know-How, either expressly or by
implication, estoppel or otherwise. Upon expiration or earlier termination of
the Discovery Program, the licenses granted in Section 2.10 herein shall automatically terminate.

     

              2.11 Immunoconjugates.

     

                   (a) General. The JRC shall discuss and agree whether to include in the
Discovery Program the development of Immunoconjugates against specific Program
Targets and the type of Immunoconjugate technology to use therefore. Both
Parties’ representatives on the JRC must agree to develop Immunoconjugates in
the Discovery Program, including the type of Immunoconjugate technology to be
used in the Discovery Program, and any disagreements related to such decisions
shall be referred to the Parties’ Executive Officers with neither Party’s
Executive Officer having the deciding vote. In the event the Executive Officers
do not resolve such disagreements, then the issue shall not
***********************. 

     

    20 

     

    

    
    

                   (b) Sole Development. If either Party presents a proposal to the JRC to
include in the Discovery Program the development of an Immunoconjugate and it is
not included in the Discovery Program pursuant to Section 2.11(a), then either
Party may, at its option and at its sole expense, conduct such development
outside the scope of the Discovery Program (the “Solely Developed
Immunoconjugate”). The sole-developing Party shall propose to the JRC the Solely
Developed Immunoconjugate for inclusion in the Discovery Program when the Solely
Developed Immunoconjugate has completed IND Preparation (unless the naked
Antibody directed against the same Target as the Solely Developed
Immunoconjugate is an IFM), and shall do so by submitting to the JRC a copy of
the IND filing following the IND filing date. The JRC shall decide whether or
not to include the Solely Developed Immunoconjugate into the Discovery Program
(outside of the customary Opt-In Rights exercise under Section 5.4 below)
with the non-developing Party’s
representatives on the JRC having the final decision making authority solely
with respect to such decision and the following shall apply: 

     

                        (1) Inclusion in the Discovery Program. If the JRC decides to include the
Solely Developed Immunoconjugate into the Discovery Program, then the Solely
Developed Immunoconjugate shall be considered a Product Candidate and become a
Licensed Product under the License and Collaboration Agreement. In such case,
*************************. For clarification, the royalty as described in
Section 2.11(d)(i), to be negotiated in good faith by the Parties, shall apply
if the sole-developing Party’s Patent Rights and Know How are practiced or used
with respect to the Solely Developed Immunoconjugate as described
herein.

     

                        (2) Continue Sole Development. If at the time when such Solely Developed
Immunoconjugate has completed its IND Preparation the License and Collaboration
Agreement is not in effect, or if the JRC decides not to include the Solely
Developed Immunoconjugate into the Discovery Program, then the sole-developing
Party shall have the right to continue development and to commercialize such
Solely Developed Immunoconjugate on its own and at its sole expense, or with a
Third Party, outside the Discovery Program without restrictions under this
Agreement.

     

                        (3) Non-Exclusive License. With respect to any Solely Developed
Immunoconjugate that may be developed solely by either Party under this Section
2.11(b), each Party hereby grants to the other Party a non-transferable,
non-exclusive, worldwide, royalty-bearing (in accordance with Section 4.4
herein) license, with the right to sublicense, and ***************************.

     

                   (c) Failed MTCs. The Parties may independently develop Immunoconjugates using Failed MTCs. For the
purposes of this Section 2.11, “Failed MTC” shall mean (i) any MTC against a
Program Target that does not progress to IND Preparation in its naked Antibody
form or (ii) any Lead Candidate, in its naked Antibody form, for which an IND is
not filed, in each case (A) due to lack of evidence of biological activity and
(B) only if both Parties agree that the Program Target or Lead Candidate, as
applicable, will not be the subject of any further activities under the
Discovery Program, such agreement not to be unreasonably withheld or delayed.

     

    With respect to any
Failed MTC each Party hereby grants to the other a non-transferable,
non-exclusive, worldwide, royalty-bearing (in accordance with Section 4.4
herein) license, with the right to sublicense, and with respect to Regeneron
Target IP and Sanofi Target IP (as the case may be) solely to make, have made,
use, sell, offer to sell and import IFMs. For the avoidance of doubt, such a
license shall not include rights to any underlying Immunoconjugate technology
owned by the licensing Party. 

     

    21 

     

    

    
    

                   (d) Royalties.

     

                   (i) Discovery Program MTC’s. If the JRC agrees to include the development of
Immunoconjugates in the Discovery Program against a specific Program Target and
a Party’s Patent Rights and Know-How are practiced or used in the development of
such Immunoconjugates, then such Party shall be entitled to receive a royalty on
Net Sales of such ******************.

     

                   (ii) Failed MTCs. In the event that a Party or its Affiliate develops
Immunoconjugates using Failed MTCs (“IFMs”) outside the Discovery Program and
this Agreement, then such Party shall be required to pay to the other Party,
within sixty (60) days following the end of each calendar quarter, royalty
payments for such IFMs in accordance with Section 4.5.

     

              2.12 Sanofi Target Licenses. With respect to any Product Candidate
against a Sanofi Target that becomes a Refused Candidate (“Licensed Refused Sanofi
Candidate”) or any Sanofi
Divested Antibody or Sanofi Regulatory Divested Antibody, Sanofi hereby grants
to Regeneron a non-transferable, non-exclusive, worldwide, royalty-bearing (in
accordance with Section 4.4 herein) license, with the right to
sublicense, under the Sanofi Target IP solely to make, have made, use, sell,
offer to sell and import such Licensed Refused Sanofi Candidate, Sanofi Divested
Antibody, or Sanofi Regulatory Divested Antibody, as the case may be. Where such
Licensed Refused Sanofi Candidate is an Immunoconjugate, ********************.

     

              2.13 Non-Exclusive License to
Sanofi. Regeneron hereby
grants Sanofi and its Affiliates a perpetual, worldwide, non-exclusive,
non-transferable, royalty-free license, without the right to sublicense, under
Regeneron Intellectual Property discovered directly in connection with the
performance of the Discovery Program claiming Targets on the Target List and/or
methods of use related to the inhibition or use of such Targets for use by
Sanofi and its Affiliates in connection with the manufacture, use, sale, offer
to sell, and import of small molecule drug and diagnostic products.

     

              2.14 Invention Assignment. All of the employees, officers and
consultants of each Party that are supporting the performance of its obligations
under this Agreement shall have executed agreements or have existing obligations
under law requiring, in the case of employees and officers, assignment to such
Party of all inventions made during the course of and as the result of their
association with such Party and, in the case of employees, officers and
consultants, obligating the individual to maintain as confidential such Party’s
Confidential Information which such Party may receive, to the extent required to
support such Party’s obligations under this Agreement. 

     

              2.15 Supply of VelociGene® Mice. On August 4, 2008, Regeneron and
sanofi-aventis U.S. Inc. entered into a Mouse Purchase Agreement pursuant to
which Regeneron is using its proprietary technology for the production of
genetically modified mouse embryonic stem cell lines and mice derived from the
corresponding mouse stem cell lines. 

     

              2.16 Option for VelocImmune®
License. At Sanofi’s
request within sixty (60) days of the Discovery Expiration Date, the Parties
shall enter into a License and Material Transfer Agreement (the “License and MTA”) under which Regeneron will license
VelocImmune to Sanofi.
*************************************. As used in this Section 2.16, VelocImmune shall mean Regeneron’s Mice
technology as previously licensed by Regeneron to Third Parties as of the
Effective Date. The License and MTA shall contain such other customary terms and
conditions consistent with those included in Regeneron’s VelocImmune license
agreements existing as of the Effective Date. 

     

    22 

     

    

    
    

              2.17 Option for Additional
Technologies. To the
extent that Regeneron decides to license either
************************************* (any such technologies and Know How being
licensed by Regeneron, being referred to as the “Additional Technologies) to commercial entities, then at Sanofi’s
request, during the one hundred eighty (180) day period following the expiration
or earlier termination of the Discovery Program, the Parties shall enter into a
definitive agreement under which Regeneron will license the applicable
Additional Technologies to Sanofi. The definitive agreement(s) for the
Additional Technologies to be licensed to Sanofi shall contain commercial and
other terms and conditions that are not materially less favorable, when taken as
a whole, than those included in any then-existing license agreements with Third
Parties for such Additional Technologies, if any. 

     

              2.18 Third Party Platform
Licenses. The Parties
acknowledge that, during the Term, the Parties may mutually agree
**********************************. In such an event, including mutual agreement
of the Parties, the following provisions shall apply: 

     

                   (a) License by Regeneron. Regeneron shall use Commercially Reasonable Efforts
to obtain and maintain any Third Party licenses ***************, including
research necessary for ***************************. 

     

                   (b) License by Sanofi. In the event that ***************** pursuant to
subsection (a) above or the Parties decide that *********************, Sanofi
shall use Commercially Reasonable Efforts to obtain and maintain such Third
Party licenses.

     

                   (c) Payment. If, as a result of either Party obtaining and maintaining such Third Party
licenses *************************** Party and shall not be ************** or
included in the *********************.

     

    ARTICLE 3 

     

    JOINT RESEARCH
COMMITTEE 

     

              3.1 The Joint Research
Committee. 

     

                   (a) Formation, Composition and
Membership. The Parties
have established the JRC, which shall consist of at least three (3) senior
representatives appointed by each of Regeneron and Sanofi. Each Party may
replace its Committee members upon written notice to the other Party;
provided that such replacement is of comparable
standing and authority within that Party’s organization as the person he or she
is replacing (or is otherwise reasonably acceptable to the other Party). The JRC
will have two (2) co-chairpersons, one designated by each of Regeneron and
Sanofi.

     

    23

     

    

    
    

                   (b) Meetings of the JRC. The JRC shall meet at least once every
calendar quarter, unless the JRC co-chairpersons otherwise agree. All JRC
meetings may be conducted by telephone, video-conference or in person as
determined by the JRC co-chairpersons; provided, however, that the JRC shall meet in person at least
once each calendar year, unless the Parties mutually agree to meet by
alternative means. Unless otherwise agreed by the Parties, all in-person
meetings for JRC shall be held on an alternating basis between Regeneron’s
facilities and Sanofi’s facilities. Further, each co-chairperson shall be
entitled to call meetings in addition to the regularly scheduled quarterly
meetings. The co-chairpersons, with the assistance of the Alliance Managers,
shall coordinate activities to prepare and circulate an agenda in advance of
each meeting and prepare and issue draft minutes of each meeting within fourteen
(14) days thereafter and final minutes within thirty (30) days thereafter, such
final minutes to include the updated Target List. With the consent of the
Parties (not to be unreasonably withheld or delayed), a reasonable number of
other representatives of a Party may attend any JRC meeting as non-voting
observers (provided that such additional representatives are
under obligations of confidentiality and non-use applicable to the Confidential
Information of the other Party that are at least as stringent as those set forth
in Article 9 below). Each Party shall be responsible for
all of its own personnel and travel costs and expenses relating to participation
in JRC meetings.

     

                   (c) Duties. The JRC shall:

     

    
                     (i) discuss the objectives of the Discovery Program;

       

                     (ii) review and comment on the Target Discovery Plan and the Antibody
Discovery Plan;

       

                     (iii) exchange and review scientific information and data relating to the
Target List and activities being conducted under, and the then-current progress
of, the Target Discovery Plan and the Antibody Discovery Plan, and establish
processes for the exchange of information relating to the progress of the
activities under the Target Discovery Plan and the Antibody Discovery Plan
(subject to the limitations concerning the identification of Targets in the
Target Discovery Plan as set forth in Section 2.3(a)); 

       

                     (iv) discuss experiments believed by a Party’s representatives on the JRC to
be necessary to properly evaluate Program Targets, Lead Candidates and Product
Candidates; 

       

                     (v) provide assistance and recommendations on the direction of the Target
Discovery Plan and the Antibody Discovery Plan; 

       

                     (vi) evaluate and prioritize Program Targets;

       

                     (vii) discuss the use of ****** with regard to Program Targets; 

       

                     (viii) discuss whether an Antibody, including any MTC, satisfies the criteria of
Lead Candidates attached in Schedule 4; 

       

                     (ix) review and prioritize Lead Candidates;

    

     

    24

     

    

    
    

    
                     (x) maintain the Rolling
Target List, Immunized Target List, and the list of Excluded Targets as provided
in this Agreement; 

       

                     (xi) conduct the Special JRC Meeting and Annual Draft Meetings; 

       

                     (xii) consider and act upon such other matters as specified in this Agreement
or as otherwise agreed to by the Parties, including, without limitation, any
requests for Sanofi to perform activities under the Discovery Program costs for
which to be treated as Discovery Program Costs in accordance with the last
paragraph of Section 4.2; 

       

                     (xiii) make any such decisions as are expressly allocated to the JRC under this
Agreement; and

    

     

    At the request of either Party’s
representatives to the JRC, conduct ad hoc meetings in addition to the quarterly
meetings of the JRC as reasonably necessary to coordinate and expedite all
decisions made by the JRC.

     

                   (d) Decision Making. The JRC shall operate by consensus. The
representatives of each Party shall have collectively one (1) vote on behalf of
such Party; provided that no such vote taken at a meeting shall be
valid unless a representative of each Party is present and participating in the
vote. Notwithstanding the foregoing, each Party, in its sole discretion, by
written notice to the other Party, may choose not to have representatives on the
JRC and leave decisions of the JRC to representatives of the other
Party.

     

              3.2 Alliance Management. Each of Sanofi and Regeneron shall appoint a
senior representative who possesses a general understanding of research,
clinical, and regulatory issues to act as its Alliance Manager (“Alliance Manager”). Each Alliance Manager shall be charged
with creating and maintaining a collaborative work environment between the
Parties. Each Alliance Manager will also be responsible for providing
single-point communication for seeking consensus both internally within the
respective Party’s organization and with the other Party’s organization,
including facilitating review of external corporate communications.

     

              3.3 Resolution of Governance
Matters. 

     

                   (a) Generally. The Parties shall cause their respective
representatives on the JRC to use their Commercially Reasonable Efforts to
resolve all matters presented to them as expeditiously as possible.

     

                   (b) Executive Officers’ Resolution of
Disputes. In the event
that the JRC is, after a period of thirty (30) days from the date a matter is
submitted to it for decision, unable to make a decision due to a lack of
required unanimity, or the Parties are unable to agree on the budget for the
Initial Development Plan for a Product Candidate in accordance with Section 5.3 below, either Party may require that the
matter be submitted to the Executive Officers for a joint decision. In such
event, the co-chairpersons of the JRC, by written notice to each Party delivered
within five (5) days after receipt of the notice from a Party pursuant to the
immediately preceding sentence, shall formally request that the dispute be
resolved by the Executive Officers, specifying the nature of the dispute with
sufficient specificity to permit adequate consideration by such Executive
Officers. The Executive Officers shall diligently and in good faith, attempt to
resolve the referred dispute within thirty (30) days of receiving such written
notification or such longer period of time as the Executive Officers may agree
in writing. Regeneron’s Executive Officer shall have the deciding vote over all
matters referred to the Executive Officers by the JRC, other than (i) matters
related to the commercial reasonableness of the budget for the Initial
Development Plan for a Product Candidate which shall be resolved in accordance
with Section 13.1 below should the Executive Officers fail to
resolve such matter, (ii) decisions concerning whether Sanofi shall perform any
activities under the Discovery Program, which shall require a joint decision of
both Parties’ Executive Officers, (iii) any decision of the Executive Officers
pursuant to Section 2.4(d), and (iv) any decision of the Executive
Officers pursuant to Section 4.4. 

     

    25

     

    

    
    

              3.4 Obligations of the Parties and their
Affiliates. The Parties
shall cause their respective designees on the JRC and their respective Executive
Officers to take the actions and make the decisions provided herein to be taken
and made by such respective designees and Executive Officers in the manner and
within the applicable time periods provided herein. 

     

    ARTICLE 4 

     

    PAYMENTS 

     

              4.1 Upfront Payment; Reimbursement Payments for
Manufacturing Expansion.
Within five (5) Business Days of the Original Agreement Effective Date, Sanofi
paid to Regeneron a non-refundable, non-creditable amount of US $85,000,000 as
consideration for access to Regeneron’s research capabilities and suite of
discovery technologies and the co-exclusive (with Regeneron) rights granted to
Sanofi hereunder during the Term. Regeneron plans to expand its facilities in
Rensselaer, New York (the “Expansion
Plans”) to help provide an adequate and timely supply of Formulated Bulk
Product for Clinical Supply Requirements (as those terms are defined in the
License Agreement) of Licensed Products. The Parties have agreed on the general
description, plan and budget of the Expansion Plans as set forth in Schedule 7.
Sanofi shall reimburse Regeneron for up to US$30,000,000 of costs incurred by
Regeneron to implement the Expansion Plans (the “Maximum Reimbursable Amount”). Within forty-five (45) days following the
end of each calendar quarter, until Regeneron has been reimbursed for the
Maximum Reimbursable Amount under this Section 4.1, Regeneron shall provide to Sanofi a detailed
report of the costs incurred by it in such calendar quarter to implement the
Expansion Plans, together with an invoice therefor. Sanofi shall reimburse
Regeneron for all costs set forth in such report and invoice within thirty (30)
days after its receipt thereof. Regeneron shall not be entitled to include
depreciation for equipment and other items included in the Expansion Plan as
Development Costs (as defined in the License Agreement) under the License
Agreement to the extent Sanofi has reimbursed Regeneron for such equipment and
other items pursuant to this Section 4.1, and shall provide evidence of the same.
Regeneron may only use the production suites identified in Schedule 7 to
manufacture products other than Licensed Products if the production of such
other products does not interfere with the production of Formulated Bulk Product
for Clinical Supply Requirements (as those terms are defined in the License
Agreement) of Licensed Products.

     

    26

     

    

    
    

              4.2 Discovery Program Costs. Commencing on the Original Agreement
Effective Date and continuing during the term of the Discovery Program, Sanofi
shall be responsible for paying one hundred percent (100%) of all Discovery
Program Costs, including Discovery Program Costs incurred for a Product
Candidate until the anticipated IND filing date for such Product Candidate,
regardless of whether Sanofi exercises its Opt-In Rights in accordance with
Section 5.1; provided that, except as set forth below and in
Section 4.10, the total annual Discovery Program Costs to
be paid by Sanofi in each of the first ten (10) years of the Discovery Program
(the “Maximum Annual Discovery Program
Costs”) shall not exceed
the following amounts (as calculated for each Contract Year): 

     

    
      	Contract Year	       	Maximum Annual Discovery Program Costs
	1 (ending December 31, 2008)	
            	US $75,000,000
	2 	
            	US $100,000,000
	3 	
            	US $160,000,000
	4 	
            	US $160,000,000
	5 	
            	US $160,000,000
	6 	
            	US $160,000,000
	7 	
            	US $160,000,000
	8 	
            	US $160,000,000
	9 	
            	US $160,000,000
	10 (ending December 31, 2017	
            	US
$160,000,000

    

    In the event that the
Discovery Program Costs incurred in any Contract Year are less than the Maximum
Annual Discovery Program Costs for such Contract Year, the amount of such
shortfall up to ten percent (10%) of the Maximum Annual Discovery Program Costs
stated immediately above for each Contract Year may be carried over to the
ensuing Contract Year and added to the Maximum Annual Discovery Program Costs
for such ensuing Contract Year except for any such shortfall at the end of
Contract Year 10, such that Regeneron’s right to carry over any shortfall shall
not be applicable into or during the Tail Period. At least sixty (60) days prior
to the end of each Contract Year, Regeneron shall notify Sanofi if it reasonably
believes that the total Discovery Program Costs for such Contract Year will be
less than the Maximum Annual Discovery Program Costs for such Contract Year and
whether Regeneron intends to apply such shortfall amount to the Discovery
Program Costs for the ensuing Contract Year.

     

    To the extent that
Sanofi performs any activities under the Discovery Program, it shall do so at
its sole cost and expense and such costs and expenses shall not be treated as
Discovery Program Costs for purposes of calculating the Maximum Annual Discovery
Program Costs unless the JRC expressly requests Sanofi to perform any such
activities, in which case the mutually agreed upon costs directly related to
such activities shall be included in the calculation of the Maximum Annual
Discovery Program Costs. The Parties acknowledge that payments made by Sanofi
pursuant to this Section 4.2 are being made as research and development
expenses, as defined in the U.S. Internal Revenue Code Section 41, and agree
that any and all credits or deductions to which either party may be entitled on
account of research performed pursuant to such payments shall be allocated to
Sanofi to the extent of such payments.

     

              4.3 Reports and Discovery Program Cost
Payments. Within
forty-five (45) days following the end of each calendar quarter, Regeneron shall
deliver electronically to Sanofi a written report setting forth in reasonable
detail the Discovery Program Costs incurred by Regeneron in such calendar
quarter along with an invoice therefore. Sanofi shall reimburse Regeneron for
all undisputed Discovery Program Costs set forth in each report within thirty
(30) days after its receipt thereof. Any disputed, unpaid Discovery Program
Costs that are determined to be due and payable to Regeneron under this
Agreement shall be paid with the Default Interest Rate.

     

    27

     

    

    
    

              4.4 **************** Opt-in
Payment. (a) In the event
that Sanofi exercises its Opt-In Rights in accordance with Section 5.1 with regard *********************** then
Sanofi shall, on an Opt-In Notice by Opt-In Notice basis, make a US $10,000,000
payment to Regeneron with the applicable Opt-In Notice or, in the case of a
dispute under this Section 4.4(a), upon the resolution of the dispute
hereunder. Regeneron shall indicate in the Opt-In Report
**********************************. Sanofi shall indicate in the Opt-In Notice
for such a Product Candidate whether it, in good faith, agrees or disagrees with
Regeneron, including any supporting information supporting its belief. In the
event of a disagreement between the Parties as to ***************************,
the matter shall be referred to the Executive Officers for a joint decision in
accordance with Section 3.3. In the event the Executive Officers are
unable to reach agreement with respect to the matter in accordance with
Section 3.3, then the dispute shall be referred to an
independent Third Party expert (the “Expert”). The Parties shall alternate having the
right to select an Expert to resolve disputes in accordance with this
Section 4.4, with Sanofi selecting the Expert for the
first such dispute and neither Party selecting an Expert that was used
previously by either Party without the written consent of the other Party. Each
Expert shall be selected by the applicable Party within thirty (30) days of the
end of the thirty (30) day period referred to in Section 3.3. Each Expert must be a person selected in
good faith who is knowledgeable in the field of Antibodies, possessing senior
executive experience in the biotechnology or pharmaceutical industry, and has no
known prior, current, or planned future association (by contract, employment, or
otherwise) with the selecting Party, any of its Affiliates, or any officer,
director, or employee of such Party or any of its Affiliates. The Parties will
both enter into a consulting agreement with each Expert and will share equally
in all fees charged by each Expert. Each Expert shall be instructed in the
consulting agreement to make his decision as to
*********************************** within two (2) weeks of his selection. The
Expert’s decision shall be final and binding upon the Parties. For the avoidance
of doubt, any dispute under this Section 4.4(a) shall not delay the development of the
applicable Licensed Product. 

     

                   (b) A Product Candidate
offers **************if it is expected to ***************** based on one or more
of the following actual or expected characteristics of a Product Candidate
generated using ************* compared to **********************. If, by way of
example, there is a Third Party Conventional Antibody in clinical development
against the applicable Program Target, then************************. The
existence ******************* shall be determined based on information available
at the time of such determination pursuant to this Section 4.4. If no Existing
Technology MTCs have been generated as of the date of the applicable Opt-In
Report, the determination of ********************** shall be based on
****************************.

     

    28

     

    

    
    

              4.5 Royalty Payments for Royalty
Products. If either Party,
or its Affiliate or licensee successfully develops and commercializes a Royalty
Product, then the commercializing Party shall pay to the non-commercializing
Party, within sixty (60) days following the end of each calendar quarter, the
following royalties on the aggregate Net Sales of such, respective Royalty
Products during the Royalty Term: 

     

    
                     (i) Refused Candidates.
Royalty payments for Refused Candidates, including a Competing Refused
Candidate, of ********* provided that no such royalty amount shall be due for
Antibodies ****************.

       

                     (ii) Licensed Refused Sanofi
Candidate. In addition to the ****************** described in subsection (i)
immediately above, a royalty payment of ************* shall apply for a Licensed
Refused Sanofi Candidate in such countries where, and for so long as,
****************** (plus any additional royalty referred to in Section
2.11(d)(i), if applicable, for a Licensed Refused Sanofi Candidate that is an
Immunoconjugate using Sanofi’s Immunoconjugate technology, for so long as it
incorporates such technology).

       

                     (iii) Sanofi Divested Antibody.
Royalty payments for a Sanofi Divested Antibody of *************** provided that
no such royalty amount shall be due for Antibodies
*********************.

       

                     (iv) Sanofi Regulatory
Divested Antibody. Royalty payments for a Sanofi Regulatory Divested Antibody of
*********** in such countries where, and for so long as, its manufacture, use or
sale is covered by a Valid Claim in any Sanofi Target IP as determined on a
country-by-country-basis. 

       

                     (v) IFMs/Failed MTCs. Royalty
payments for IFMs of **** as
described in Section 2.11(d)(ii) of this Agreement. 

       

                     (vi) Solely Developed
Immunoconjugates. Royalty payments for Solely Developed Immunoconjugates of ****
as described in Section 2.11(b). 

       

                     (vii) Antibodies Pursuant to
Section 12.11(b). Royalty payments for Antibodies referred to and described in
Section 12.11(b) of ************ in such countries where, and for so long as,
its manufacture, use or sale is covered by a Valid Claim in any Sanofi Target IP
as determined on a country-by-country basis.

    

     

    In the event that any Royalty
Product requires a sub-license to Sanofi Patent Rights or Regeneron Patent
Rights, as applicable, and such sub-license is granted under this Agreement,
then any financial remuneration that the licensing Party is required to pay to a
Third Party for its license from the Third Party shall be considered a
pass-through cost to be borne by the Party developing and/or commercializing the
Royalty Product.

     

    29

     

    

    
    

              4.6 Royalty Term and Reporting. The royalties payable under Sections 4.5 (i), 4.5(iii), and 4.5(v) of this Agreement shall each be paid for the
period of time, as determined on a Royalty Product-by-Royalty Product and
country-by-country basis, commencing on the Effective Date and ending on the
later to occur of (a) ***********************, (b) the expiration of the last to
expire Valid Claim of the Licensed Sanofi Target IP or Regeneron Target IP, as
the case may be. The royalties payable under Sections 4.5 (ii), 4.5 (iv), 4.5(vi), and 4.5(vii) of this Agreement shall each be paid on a
Royalty Product-by-Royalty Product and country-by-country basis, commencing on
the Effective Date and ending on the expiration of the last to expire Valid
Claim of the licensed Sanofi Target IP (the applicable period of time during
which royalties are payable pursuant to this sentence and the preceding sentence
being referred to as the applicable “Royalty Term”). During the applicable Royalty Term, the
Party owing royalties shall deliver to the other Party with each royalty payment
a report detailing in reasonable detail the information necessary to calculate
the royalty payments due under this Agreement for such calendar quarter,
including the following information, specified on a Royalty Product-by-Royalty
Product and country-by-country basis: (a) total gross invoiced amount from sales
of each Royalty Product by a Party, its Affiliates and sublicensees; (b) all
relevant deductions from gross invoiced amounts to calculate Net Sales; (c) Net
Sales; and (d) royalties payable.

     

              4.7 Payment Method and Currency. All payments under this Agreement shall be
made by bank wire transfer in immediately available funds to an account
designated by the Party to which such payments are due. All sums due under this
Agreement shall be payable in United States Dollars. In those cases where the
amount due in United States Dollars is calculated based upon one or more
currencies other than United States Dollars, such amounts shall be converted to
United States Dollars using the average of the buying and selling exchange rate
for conversion of the applicable foreign currency into United States Dollars,
using the spot rates (the “Closing Mid-Point Rates” found in the “Dollar spot
forward against the Dollar” table published by The Financial Times, or any other publication as agreed to by the Parties) from the last
Business Day of the preceding month.

     

              4.8 Late Payments. All late payments made under this Agreement
(including payments made pursuant to Sections 4.4 and 4.5 above), shall earn interest, to the extent
permitted by applicable Law, from the date due until paid at a rate equal to the
thirty (30) day London Inter-Bank Offering Rate (LIBOR) U.S. Dollars, as quoted
in The Wall Street Journal (U.S., Eastern Edition) effective for the
date on which the payment was due, ***** (such sum being referred to as the “Default Interest Rate”). 

     

              4.9 Taxes. Except as set forth in Section 4.1, any withholding or other taxes that a Party
is required by Law to withhold or pay on behalf of the other Party, with respect
to any payments to such other Party hereunder, shall be deducted from such
payments and paid to the appropriate tax authority contemporaneously with the
remittance to such other Party; provided, however, that the remitting Party shall furnish the
other Party with proper evidence, including any self-reporting documentation, of
the taxes so paid. Each Party shall cooperate with the other and furnish the
other Party with appropriate documents to secure application of the most
favorable rate of withholding tax under applicable Law (or exemption from such
withholding tax payments, as applicable).

     

    30

     

    

    
    

              4.10 Special Adjustment. If during the period beginning January 1,
2012 and ending on December 31, 2013, both *************************** then, at
Sanofi’s option, which must be exercised by written notice to Regeneron no later
than *************, the Maximum Annual Discovery Program Costs set forth in
Section 4.1 shall be reduced to US$120,000,000 for each
of Contract Years 7, 8, 9, and 10 (the “Special Adjustment”). Notwithstanding
the foregoing, ****************************** against which Lead Candidates have
been developed under the Discovery Program prior to such exclusion, and Regeneron files
IND(s) for Excluded Candidate(s) against such Excluded Target(s), then each such
IND filing shall be considered the submission of a Sanofi Opt-In Report for a
Product Candidate solely for purposes of determining whether
*************************. If Sanofi exercises its option for the Special
Adjustment following the occurrence of the conditions set forth above, then
Regeneron shall have the right (the “Catch Up Right”), in its sole discretion, to fund up to
US$40,000,000 of Discovery Program Costs on its own for each of the remaining
Contract Years through the Discovery Expiration Date (the actual aggregate
amount of such Discovery Program Costs funded by Regeneron on its own during
Contract Years 7, 8, 9, and 10 being referred to as the “Catch-Up Amount”). Regeneron shall have sixty (60) days from
the date of the Special Adjustment to exercise the Catch Up Right and shall
notify Sanofi promptly in writing of such exercise. Regeneron shall provide
Sanofi within sixty (60) days of the beginning of each subsequent Contract Year
with a written report setting forth in reasonable detail the calculation of the
Catch-Up Amount. If Regeneron exercises this Catch Up Right,
then********************************* then Sanofi shall be required to make a
payment to Regeneron equal to the Catch-Up Amount within forty-five (45) days
after receipt of a written report setting forth in reasonable detail the
calculation of the Catch-Up Amount. Effective upon the occurrence of the Special
Adjustment, unless Regeneron exercises the Catch Up Right, the annual
Collaboration Objectives shall be adjusted as follows: ***********************.

     

    ARTICLE 5

     

    OPT-IN RIGHTS TO LICENSE PRODUCT
CANDIDATES

     

              5.1 Opt-In Rights to License Product
Candidates. Subject to the
penultimate sentence of this Section 5.1 and the other terms of this Agreement, Sanofi
shall have the exclusive right during the term of the Discovery Program to elect
to jointly (with Regeneron) develop and commercialize each Product Candidate as
set forth below, under the terms and conditions set forth in the License and
Collaboration Agreement (the “Opt-In
Rights”). While the Opt-In Rights are in effect with respect to an
Antibody from the Discovery Program, including a MTC in the Discovery Program,
Regeneron will not grant to any Third Party rights to any such Antibody. The
Opt-In Rights will expire and Sanofi will no longer have any rights or licenses
to any Antibodies, including MTCs, under this Agreement upon the expiration or
earlier termination of the Discovery Program. After the first ten (10) years of
the Discovery Program, the Opt-In Rights shall remain in effect during the Tail
Period solely with respect to Lead Candidates and other Antibodies and MTCs
against any applicable Program Targets properly identified by Sanofi in its
notice to extend the Discovery Program through the Tail Period provided under
Section 2.9. For the avoidance of doubt, Sanofi shall
have no Opt-In Rights to Excluded Candidates owned or licensed by Regeneron or
its Affiliates. 

     

              5.2 Process for Opt-In Rights. At least *********** prior to the
anticipated filing date for the IND for a Product Candidate, Regeneron will
provide Sanofi with a report containing
*****************************************, as well as the anticipated date of
the filing of the applicable IND (the “Opt-In Report”). Following Sanofi’s
receipt of the Opt-In Report, Regeneron shall also provide Sanofi with updated
information, when available, that is required for or intended to be included in
the IND for such Product Candidate and any other information regarding the
Product Candidate Sanofi reasonably requests, which is reasonably available to
Regeneron. Regeneron shall provide a draft of the IND containing all material
information to be included in such draft IND at least one (1) month prior to the
anticipated filing date for such IND, it being understood that this draft IND
shall not be required to include
***********************************.

     

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              5.3 Initial Development Plan. Within thirty (30) days after Sanofi’s
receipt of the Opt-In Report, the Parties shall jointly commence, and thereafter
as promptly as practicable complete, preparation of a plan and budget for the
planned development activities for such Product Candidate through the completion
of the Phase I Clinical Trial (the “Initial Development Plan”), the final budget included in which shall
be subject to Sanofi’s written approval, not to be unreasonably withheld or
delayed; provided, however, that (i) the Parties shall not be required
to continue or complete such preparation if the Opt-In Period for such Product
Candidate has expired without Sanofi having timely exercised its Opt-In Rights
with respect thereto or Sanofi shall have otherwise advised Regeneron in writing
that it will not exercise its Opt-In Rights with respect to such Product
Candidate and (ii) if the Parties are unable to agree on a final budget the
matter shall first be referred to the Executive Officers in accordance with
Section 3.3(b) above, and if such Executive Officers are
unable to resolve such matter, it shall be submitted to binding arbitration to
be conducted in accordance with Section 13.1 below. If Sanofi properly exercises its
Opt-In Rights with respect to a Product Candidate, such Product Candidate shall
be developed in accordance with the Initial Development Plan until the Parties
agree to the “Global Development Plan” as such term is defined in the License and
Collaboration Agreement. 

     

              5.4 Opt-In Exercise. Sanofi may exercise its Opt-In Rights under
this Agreement and license a Product Candidate under the License and
Collaboration Agreement by delivering to Regeneron a written notice of exercise
in the form annexed hereto as Exhibit A (an “Opt-In Notice”) on or before ***************************
and (ii) ************* before the revised anticipated filing date of such IND
notified by Regeneron, if any, (“the “Opt-In Period”), unless Regeneron has not
submitted to Sanofi the draft of the IND in accordance with Section 5.2 above,
in which case Sanofi ************************* to exercise the Opt-In Rights..
Upon the timely exercise of the Opt-In Rights by Sanofi, the applicable Product
Candidate shall become a Licensed Product. Unless otherwise agreed by the
Parties, Regeneron shall exercise Commercially Reasonable Efforts to file the
IND **************************. 

     

              5.5 Dll4 and REGN 88. Sanofi exercised its Opt-In Rights to REGN
88 as of the Original Agreement Effective Date and was deemed to have exercised
its Opt-In Rights with respect to the MTC against Delta-like ligand 4 (Dll4) as
of the Original Agreement Effective Date.

     

              5.6 Refused Candidates. If Sanofi does not provide Regeneron with an
Opt-In Notice within the Opt-In Period with respect to a particular Product
Candidate, or Sanofi notifies Regeneron that it will not exercise Opt-In Rights
with respect to the Product Candidate, then the following shall
apply:

     

    
                          (i) Refused Candidate. The Opt-In Rights shall expire with respect
to that Product Candidate (a “Refused Candidate”). All licenses granted in Section 2.10 shall automatically expire with respect to
each Product Candidate upon such Product Candidate becoming a Refused Candidate.
Following such time as a Product Candidate becomes a Refused Candidate, except
as set forth below, the applicable Target shall no longer be deemed a Program
Target and shall be removed from the Target List and Sanofi shall no longer have
any rights to any Antibodies, including MTCs, against such Target under this
Agreement. Sanofi shall have a one-time right within four (4) weeks of the date
a Product Candidate becomes a Refused Candidate to designate the Target for such
Refused Candidate as one of its Sanofi Targets, otherwise it shall be considered
an Excluded Target.

    

     

    32

     

    

    
    

    
                     (ii) Regeneron Rights. Regeneron may continue to develop and
commercialize (on its own or with one or more Third Parties) any Refused
Candidate without restriction outside the Discovery Program and this Agreement,
unless the Refused Candidate is a Competing Refused Candidate, in which case,
Section 2.8(b)(ii) shall apply. In addition, unless Sanofi has
exercised its right under Section 5.6(i) to designate the applicable Target for a
Refused Candidate as one of its Sanofi Targets, then Regeneron may continue to
develop and commercialize (on its own or with one or more Third Parties) any
MTCs or other Antibodies against such Target and may practice and use any
Regeneron Intellectual Property, including, without limitation, the Mice, in
connection with such activities. If Sanofi has designated the applicable Target
for the Refused Candidate as a Sanofi Target pursuant to Section 5.6(i), then all Antibodies (including MTCs) against
such Target that were generated under the Discovery Program other than the
Refused Candidate shall remain part of the Discovery Program. 

       

                     (iii) Sanofi Rights. Neither Sanofi nor its Affiliates, either
directly or through any Third Party, may develop or commercialize an Antibody
that is against the Target of a Refused Candidate ****************** following
such date that it becomes a Refused Candidate, provided that ****************
shall not apply to the following:
************************************.

    

     

    ARTICLE 6 

     

    NEWLY CREATED
INVENTIONS 

     

              6.1 Ownership of Newly Created Intellectual
Property. 

     

                   (a) Each Party shall
exclusively own all intellectual property (including, without limitation,
Know-How, Patents and Patent Applications and copyrights) discovered, invented,
authored or otherwise created solely by such Party, its employees, agents and
consultants under the Discovery Program (“Sole Inventions”). Sole Inventions made solely by Sanofi, its
employees, agents and consultants are referred to herein as “Sanofi Sole Inventions.” Sole Inventions made solely by Regeneron,
its employees, agents and consultants are referred to herein as “Regeneron Sole Inventions.” The Parties agree that nothing in this
Agreement, and no use by a Party of the other Party’s Intellectual Property
pursuant to this Agreement, shall vest in a Party any right, title or interest
in or to the other Party’s Intellectual Property, other than the license rights
expressly granted hereunder.

     

    33

     

    

    
    

                   (b) The Parties shall jointly
own all intellectual property (including, without limitation, Know-How, Patents
and Patent Applications and copyrights) discovered, invented, authored or
otherwise created under the Discovery Programs that is invented or authored
jointly by an individual or individuals having an obligation to assign such
intellectual property to Sanofi (or for which ownership vests in Sanofi by
operation of law), on the one hand, and an individual or individuals having an
obligation to assign such intellectual property to Regeneron (or for which
ownership vests in Regeneron by operation of law), on the other hand, on the
basis of each Party having an undivided interest in the whole (“Joint Inventions”). 

     

                   (c) Notwithstanding the
foregoing in Section 6.1(b), (i)
for purposes of determining whether a patentable invention is a Sanofi Sole
Invention, a Regeneron Sole Invention or a Joint Invention, questions of
inventorship shall be resolved in accordance with United States patent laws, as
determined, if necessary, by an independent third party, (ii) for purposes of
determining whether a copyrighted work is a Sanofi Sole Invention, a Regeneron
Sole Invention or a Joint Invention, questions of copyright authorship shall be
resolved in accordance with United States copyright laws, and (iii) for purposes
of determining whether Know-How (other than copyrighted work and Patent
Applications) is a Sanofi Sole Invention, a Regeneron Sole Invention or a Joint
Invention, questions of authorship or inventorship shall be resolved in
accordance with the laws of the State of New York, United States. 

     

                   (d) To the extent that any
right, title or interest in or to any intellectual property discovered,
invented, authored or otherwise created under this Agreement vests in a Party or
its Affiliate, by operation of Law or otherwise, in a manner contrary to the
agreed upon ownership as set forth in this Agreement, such Party (or its
Affiliate) shall, and hereby does, irrevocably assign to the other Party any and
all such right, title and interest in and to such intellectual property to the
other Party without the need for any further action by any Party. 

     

                   (e) The Parties hereby agree
that each Party’s use of the Joint Inventions shall be governed by the terms and
conditions of this Agreement including the following: each Party’s interest in
the Joint Inventions may be sublicensed to Third Parties, and any ownership
rights therein transferred, in whole or in part, by each Party without consent
of the other Party (unless otherwise prohibited by this Agreement or the License
and Collaboration Agreement); provided that (i) each of the Parties acknowledges
that it receives no rights to any Intellectual Property of the other Party
underlying or necessary for the use of any Joint Invention, except as otherwise
set forth herein or in the License and Collaboration Agreement, (ii) each Party
agrees not to transfer any of its ownership interest in any of the Joint
Inventions without securing the transferee’s written agreement to be bound by
the terms of this Section 6.1(e), (iii) during the Discovery Program, each
Party agrees not to license its interest in any Joint Invention with the right
to use such Joint Invention for developing, manufacturing or commercializing
antibodies (except for developing, manufacturing or commercializing a Party’s
Antibodies that may be included in the exclusions described in Section 2.8 (b) of the Agreement), and (iv) nothing in this
Article 6 shall relieve a Party or its Affiliates of
their obligations under Article 9 with respect to Confidential Information
provided by the other Party or such other Party’s Affiliates. Neither Party
hereto shall have the obligation to account to the other Party for any revenues
or profits obtained from any transfer of its interest in, or its use, sublicense
or other exploitation of, the Joint Inventions outside the scope of the
Discovery Program. Each of the Parties (or its Affiliate), as joint owner of the
Joint Inventions, agrees to cooperate with any enforcement actions brought by
the other joint owner(s) against any Third Parties, and further agrees not to
grant any licenses to any such Third Parties against which such enforcement
actions are brought during the time of such dispute, without the prior written
consent of the other joint owner(s), such consent not to be unreasonably
withheld. The provisions governing Joint Inventions set forth in this
Section 6.1(e) shall survive the expiration or termination
of this Agreement. 

     

    34

     

    

    
    

              6.2 Prosecution and Maintenance of Patent
Rights. 

     

                   (a) Subject to the terms of
the License and Collaboration Agreement with respect to Licensed Products,
Regeneron shall prepare, file, prosecute and maintain Patents and Patent
Applications (as applicable) included in the Regeneron Patent Rights and
Regeneron shall confer with and keep Sanofi reasonably informed regarding the
status of such activities to the extent they are Product Patent Rights. With
respect to the preparation, filing, prosecution and maintenance of those
inventions that are Product Patent Rights, ********************* except that all
provisionals, the priority application based thereon and the corresponding PCT
application ************************. Sanofi shall prepare, file, prosecute and
maintain Patents and Patent Applications (as applicable) included in the Sanofi
Patent Rights provided that ***************************** except that all
provisionals, the priority application based thereon and the corresponding PCT
application *******************************. 

     

                   (b) With respect to any Joint
Patent Rights, the Parties shall consult with each other regarding the filing,
prosecution and maintenance of any Patents and Patent Applications, and
responsibility for such activities shall be the obligation of Regeneron.
Regeneron shall undertake such filings, prosecutions and maintenance in the
names of both Parties as co-owners using outside counsel reasonable acceptable
to Sanofi, ***************************************.

     

                   (c) The Parties shall have
the following obligations with respect to the filing, prosecution and
maintenance of any Joint Patent Rights, as well as any Product Patent Rights:
(i) the prosecuting Party (the “Prosecuting Party”) shall provide the other Party (the
“Non-Prosecuting Party”) with notice and a copy of a substantially
completed draft of any Patent Application at least thirty (30) days prior to the
filing of any such Patent Application by the Prosecuting Party and incorporate
all reasonable comments provided by the Non-Prosecuting Party within such thirty
(30) day period unless the Prosecuting Party reasonably believes that such
comments will adversely affect the scope or validity of the Patent Application
or resulting Patent (it being understood that the Parties will discuss any
points of disagreement and work to resolve disagreements during this thirty (30)
day period); (ii) the Prosecuting Party shall notify the Non-Prosecuting Party
prior to its filing of a Patent Application; (iii) the Prosecuting Party shall
consult with the Non-Prosecuting Party promptly following the filing of the
Patent Application to mutually determine in which countries it shall file
convention Patent Applications; (iv) the Prosecuting Party shall provide the
Non-Prosecuting Party promptly with copies of all material communications
received from or filed in patent offices with respect to such applications and
incorporate all reasonable comments provided by the Non-Prosecuting Party,
unless the Prosecuting Party reasonably believes that such comments will
adversely affect the validity or scope of the Patent Application or resulting
Patent for both Parties; and (v) the Prosecuting Party shall provide the
Non-Prosecuting Party a reasonable time prior to taking or failing to take
action that would affect the scope or validity of rights under any Patent
Applications or Patents, but in no event less than sixty (60) days prior to the
next deadline for any action that may be taken with the applicable patent
office, (including but not limited to substantially narrowing or canceling any
claim without reserving the right to file a continuing or divisional Patent
Application, abandoning any Patent or not filing or perfecting the filing of any
Patent Application in any country), with notice of such proposed action or
inaction so that the Non-Prosecuting Party has a reasonable opportunity to
review and make comments, and take such actions as may be appropriate in the
circumstances, including assuming the Prosecuting Party’s responsibility for
filing, prosecution and maintenance of any such Product Patent Right or Joint
Patent Right and becoming the Prosecuting Party. With respect to Joint
Inventions, it is understood that the Prosecuting Party and Non-Prosecuting
Party shall use all reasonable efforts to reach agreement on all material
filings and amendments and no such material filings or amendments shall be made
by the Non-Prosecuting Party without the prior written agreement of the
Non-Prosecuting Party, such agreement not to be unreasonably withheld or
delayed. In addition, in the event that the Prosecuting Party materially
breaches the foregoing obligations and such material breach is not cured within
thirty (30) days of a written notice from the Non-Prosecuting Party describing
such breach in reasonable detail, or in the event that the Prosecuting Party
fails to undertake the filing of a Patent Application within the earlier of (i)
ninety (90) days of a written request by the Non-Prosecuting Party to do so, and
(ii) sixty (60) days prior to the anticipated filing date, the Non-Prosecuting
Party may assume the Prosecuting Party’s responsibility for filing, prosecution
and maintenance of any such Product Patent Right and will thereafter be deemed
the Prosecuting Party for purposes hereof. Notwithstanding the foregoing, the
Prosecuting Party may withdraw from or abandon any Patent or Patent Application
on thirty (30) days’ prior notice to the Non-Prosecuting Party (provided that such notice shall be given no later than
sixty (60) days prior to the next deadline for any action that may be taken with
respect to such Patent or Patent Application with the applicable patent office),
providing the Non-Prosecuting Party a free-of-charge option to assume the
prosecution or maintenance thereof. The Parties will file and prosecute Patent
Applications described in this Section 6.2(a) in the list of countries set forth in
Exhibit B, unless otherwise agreed upon by the Parties.

     

    35

     

    

    
    

                   (d) All costs incurred in the
filing, prosecution and maintenance of any Joint Patent Rights and Product
Patent Rights and in performing freedom to operate analyses on Program Targets
or Lead Candidates shall be shared equally by the Parties.

     

                   (e) Each Party shall have the
right to invoke the Cooperative Research and Technology Enhancement Act of 2004,
35 U.S.C. 103(c)(2)-(c)(3) (the "CREATE Act") with respect to Joint Inventions,
without the prior written consent of the other Party. In the event that a Party
intends to invoke the CREATE Act, as permitted by the preceding sentence, it
shall notify the other Party and the Parties shall reasonably cooperate and
coordinate their activities with respect to any submissions, filings or other
activities in support thereof. The Parties acknowledge and agree that this
Agreement is a "joint research agreement" as defined in the CREATE Act. For the
avoidance of doubt, nothing in this Section 6.2(e) shall amend or modify the determination of
ownership of intellectual property as set forth in Section 6.1. 

     

    36

     

    

    
    

              6.3 Third Party Claims. In the normal course of business, Regeneron
shall carry out patent searches in relation to the Program Targets, Lead
Candidates, and Product Candidates, as well as the technologies used to
discover, develop and commercialize any of the foregoing, and will disclose,
along with any analysis, to Sanofi’s counsel any conflict or likely conflict of
which Regeneron is aware with respect to the Patent Rights of any Third Party
with respect to any such Program Targets, Lead Candidates and Product Candidates
prior to selection to enter IND Preparation. If either Party or its Affiliates
shall learn of a Third Party claim that the activities under the Discovery
Program infringe or otherwise violate the intellectual property rights of any
Third Party in the Territory, then such Party shall promptly notify the other
Party in writing of this claim, assertion or certification. As soon as
reasonably practical after the receipt of such notice, the Parties shall cause
their respective legal counsel to meet to confer on such allegation of
infringement. In particular, with regard to issues related to freedom to operate
concerning Targets pursued under this Agreement, the Parties shall conduct and
maintain ongoing and regular communications between their legal/intellectual
property departments. 

     

    ARTICLE 7

     

    BOOKS, RECORDS AND INSPECTIONS; AUDITS AND
ADJUSTMENTS 

     

              7.1 Books and Records. Each Party shall keep proper books of record
and account in which full, true and correct entries (in conformity with GAAP)
shall be made for the purpose of determining the amounts payable or owed
pursuant to this Agreement. Each Party shall permit auditors, as provided in
Section 7.2, to visit and inspect, during regular
business hours and under the guidance of its employees, the books of record and
account of such Party to the extent relating to this Agreement and discuss its
affairs, finances and accounts to the extent relating to this Agreement.

     

              7.2 Audits and Adjustments.

     

                   (a) Each Party shall have the
right, upon no less than thirty (30) days’ advance written notice and at such
reasonable times and intervals and to such reasonable extent as the Party shall
request, not more than once during any Contract Year, to have the books and
records of the other Party to the extent relating to this Agreement for the
preceding two (2) years audited by an independent “Big Four” (or equivalent)
accounting firm of its choosing under reasonable, appropriate confidentiality
provisions, for the sole purpose of verifying the accuracy of all financial,
accounting and numerical information and calculations provided, and payments
made, under this Agreement; provided that no period may be subjected to audit more
than one (1) time unless a material discrepancy is found in any such audit of
such period, in which case additional audits of such period may be conducted
until no material discrepancies are found. 

     

                   (b) The results of any such
audit shall be delivered in writing to each Party and shall be final and binding
upon the Parties, unless disputed by a Party within ninety (90) days of
delivery. If a Party over billed or underpaid an amount due under this Agreement
resulting in a cumulative discrepancy during any year of more than ******, it
shall also reimburse the other Party for the costs of such audit (with the cost
of the audit to be paid by the Party initiating the audit in all other cases).
Such accountants shall not reveal to the Party requesting the audit the details
of its review, except for the findings of such review and such information as is
required to be disclosed under this Agreement, and shall be subject to the
confidentiality provisions contained in Article
9.

     

    37

     

    

    
    

                   (c) If any examination or
audit of the records described above discloses an over billing or underpayment
of amounts due hereunder, then unless the result of the audit is contested
pursuant to Section 7.2(b) above, the Party that overbilled or underpaid
shall pay the same (plus interest thereon at the Default Interest Rate from the
date of such over billing or underpayment through the date of payment of the
amount required to be paid pursuant to this Section 7.2(c)) to the Party entitled thereto within thirty
(30) days after receipt of the written results of such audit pursuant to this
Section 7.2. 

     

                   (d) Disputes. Any disputes with respect to the results of
any audit conducted under Section 7.2 above shall be resolved by binding
arbitration in accordance with Section 13.1 below.

     

              7.3 IAS/IFRS/GAAP. Except as otherwise provided herein, all
costs and expenses and other financial determinations with respect to this
Agreement shall be determined in accordance with IAS/IFRS, and for the US, if
desired, GAAP, as generally and consistently applied. 

     

    ARTICLE 8

     

    REPRESENTATIONS, WARRANTIES AND
COVENANTS 

     

              8.1 Joint Representations and
Warranties. Each Party
hereto represents and warrants to the other Party, as of the Effective Date, as
follows: (a) it is duly organized and validly existing under the Laws of its
jurisdiction of incorporation; (b) it has full corporate power and authority and
has taken all corporate action necessary to enter into and perform this
Agreement; (c) the execution and performance by it of its obligations hereunder
will not constitute a breach of, or conflict with, its organizational documents
nor any other material agreement or arrangement, whether written or oral, by
which it is bound or requirement of applicable Laws or regulations; (d) this
Agreement is its legal, valid and binding obligation, enforceable in accordance
with the terms and conditions hereof (subject to applicable Laws of bankruptcy
and moratorium); (e) such Party is not prohibited by the terms of any agreement
to which it is a party from performing the Discovery Program or granting the
rights and/or licenses hereunder; and (f) no broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee in connection with this
Agreement or the transactions contemplated hereby based on arrangements made by
it or on its behalf. 

     

         8.2 Knowledge of Pending or Threatened
Litigation. Each Party
represents and warrants to the other Party that, as of the Effective Date, there
is no claim, announced investigation, suit, action or proceeding pending or, to
such Party’s knowledge, threatened, against such Party before or by any court,
arbitrator, or Governmental Authority that, individually or in the aggregate,
could reasonably be expected to (a) materially impair the ability of such Party
to perform any of its obligations under this Agreement or (b) prevent or
materially delay or alter the consummation of any or all of the transactions
contemplated hereby. During the term of the Discovery Program, each Party shall
promptly notify the other Party in writing upon learning of any of the
foregoing.

     

    38

     

    

    
    

              8.3 Additional Regeneron Representations,
Warranties and Covenants.
Regeneron additionally represents and warrants to Sanofi that, as of the
Effective Date: 

     

                   (a) Regeneron owns or has a valid license to all Regeneron Patent Rights in
existence as of the Effective Date; 

     

                   (b) Regeneron has the right and authority to grant the rights (including the
Opt-In Rights) granted pursuant to the terms and conditions of this Agreement
and Regeneron has not granted, and will not grant during the term of this
Agreement, any rights that would be inconsistent with or in conflict with or in
derogation of the rights granted herein; 

     

                   (c) there is no pending litigation of which Regeneron has received notice or
is otherwise aware that alleges that any of Regeneron’s activities relating to
the Mice or the Regeneron Intellectual Property have violated, or would violate,
the intellectual property rights of any Third Party (nor has it received any
written communication threatening such litigation);

     

                   (d) to Regeneron’s knowledge, no litigation has been otherwise threatened
which alleges that any of its activities relating to the Mice or the Regeneron
Intellectual Property have violated or would violate, any intellectual property
rights of any Third Party; 

     

                   (e) to Regeneron’s knowledge, after due inquiry, the use of the Mice and the
Regeneron Intellectual Property generally in the Discovery Program (but not with
respect to a specific MTC or Target) does not and will not infringe or otherwise
violate any valid Patent or provisional rights to applications or other
intellectual property of any Third Party claiming genetically modified mice or
the use thereof to make antibodies; 

     

                   (f) neither the development or reproduction of the Mice nor the conception,
development and reduction to practice of any Regeneron Intellectual Property
existing as of the Effective Date has constituted or involved the
misappropriation of trade secrets or other rights of any Person; 

     

                   (g) to Regeneron’s knowledge, the issued Patents included in the Regeneron
Intellectual Property existing as of the Effective Date are not invalid or
unenforceable, in whole or part; 

     

                   (h) Regeneron has not received any written notice of any threatened claims or
litigation seeking to invalidate or otherwise challenge the Regeneron Patent
Rights or Regeneron’s rights therein, and, to Regeneron’s knowledge, none of the
Regeneron Patent Rights are subject to any pending re-examination, opposition,
interference or litigation proceedings; and

     

    39 

     

    

    
    

                   (i) neither Regeneron nor any of its Affiliates shall transfer ownership,
assign ownership, grant a security interest in or otherwise encumber any of its
rights in, to or under any Regeneron Intellectual Property in a way that will
impair Sanofi’s rights or
Regeneron ability to perform its obligations under this
Agreement. 

     

    ***************************************. 

     

              8.4 Disclaimer of Warranties. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
CONCERNING THE SUCCESS OR POTENTIAL SUCCESS OF THE DEVELOPMENT,
COMMERCIALIZATION, MARKETING OR SALE OF ANY PRODUCT. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 

     

    ARTICLE 9 

     

    CONFIDENTIALITY 

     

              9.1 Confidential Information. During the term of this Agreement and for a
period of five (5) years thereafter, each Party (in such capacity, the
“Receiving Party”) shall keep confidential, and other than as
provided herein or in the License and Collaboration Agreement, shall not use or
disclose, directly or indirectly, any and all trade secrets or other proprietary
information, including, without limitation, any proprietary data, inventions,
documents, ideas, information, discoveries, or materials, owned, developed, or
possessed by the other Party (in such capacity, the “Disclosing Party”), whether in tangible or intangible form,
the confidentiality of which the Disclosing Party takes reasonable measures to
protect, including but not limited to Regeneron Know-How and Sanofi Know-How
disclosed by the Disclosing Party under this Agreement (the “Confidential Information”). For purposes of this Agreement, all
confidential information disclosed by Regeneron under the terms of the
confidentiality agreements between Sanofi Parent and Regeneron dated February 1,
2007 and October 23, 2007 is hereby deemed Confidential Information of
Regeneron. Each of Sanofi and Regeneron covenants that neither it nor any of its
respective Affiliates shall disclose any Confidential Information of the other
Party to any Third Party except to its employees, agents, consultants or any
other Person under its authorization; provided such employees, agents, consultants or other
Persons are subject in writing to confidentiality obligations applicable to the
Disclosing Party’s Confidential Information no less strict than those set forth
herein. 

     

                   (a) Notwithstanding the foregoing, Confidential Information shall not be
deemed to include information and materials (and such information and materials
shall not be considered Confidential Information under this Agreement) to the
extent that it can be established by written documentation by the Receiving
Party that such information or material is: (i) already in the public domain as
of the Effective Date or becomes publicly known through no act, omission or
fault of the Receiving Party or any Person to whom the Receiving Party provided
such information; (ii) is or was already in the possession of the Receiving
Party at the time of disclosure by the Disclosing Party; (iii) is disclosed to
the Receiving Party on an unrestricted basis from a Third Party not under an
obligation of confidentiality to the Disclosing Party or any Affiliate of the Disclosing Party with respect to such
information; (iv) information that has been independently created by the
Receiving Party (or its Affiliate), as evidenced by written or electronic
documentation, without any aid, application or use of the Disclosing Party’s
Confidential Information; or (v) required by Law to be disclosed, provided that the Receiving Party uses reasonable
efforts to give the disclosing Party advance notice of such required disclosure
in sufficient time to enable the Disclosing Party to seek confidential treatment
for such information, and provided further that the Receiving Party provides all
reasonable cooperation to assist the Disclosing Party to protect such
information and limits the disclosure to that information which is required by
Law to be disclosed.

     

    40 

     

    

    
    

                   (b) Information and other Know-How that is discovered by Regeneron in
connection with the Discovery Program will be considered Regeneron’s
Confidential Information, except to the extent it relates to a Licensed Product,
in which case it shall be Confidential Information of both Parties, subject to
the terms of the License and Collaboration Agreement. 

     

                   (c) Specific aspects or details of Confidential Information will not be
deemed to be within the public knowledge or in the prior possession of a Person
merely because such aspects or details of the Confidential Information are
embraced by general disclosures in the public domain. In addition, any
combination of Confidential Information will not be considered in the public
knowledge or in the prior possession of either Person merely because individual
elements thereof are in the public domain or in the prior possession of a Person
unless (i) the combination and its principles are in the public knowledge or in
the prior possession of that Person and (ii) the combination is documented, in a
single contemporaneous document, as in the public knowledge or in the prior
possession of a Person. 

     

                   (d) Notwithstanding anything else in this Agreement to the contrary, each
Party hereto (and each employee, representative, or other agent of any Party)
may disclose to any and all Persons, without limitation of any kind, the Federal
income tax treatment and Federal income tax structure of any and all
transaction(s) contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to any Party (or
to any employee, representative, or other agent of any party) relating to such
tax treatment or tax structure, provided, however, that this authorization of disclosure shall
not apply to restrictions reasonably necessary to comply with securities laws.
This authorization of disclosure is retroactively effective immediately upon
commencement of the first discussions regarding the transactions contemplated
herein, and the Parties aver and affirm that this tax disclosure authorization
has been given on a date which is no later than thirty (30) days from the first
day that any Party hereto (or any employee, representative, or other agent of
any party hereto) first made or provided a statement as to the potential tax
consequences that may result from the transactions contemplated
hereby.

     

              9.2 Injunctive Relief. The Parties hereby acknowledge and agree
that the rights of the Parties hereunder are special, unique and of
extraordinary character, and that if any Party refuses or otherwise fails to
act, or to cause its Affiliates to act, in accordance with the provisions of
this Agreement, such refusal or failure would result in irreparable injury to
the other Party, the exact amount of which would be difficult to ascertain or
estimate and the remedies at law for which would not be reasonable or adequate
compensation. Accordingly, if any Party
refuses or otherwise fails to act, or to cause its Affiliates to act, in
accordance with the provisions of this Agreement, then, in addition to any other
remedy which may be available to any damaged Party at law or in equity, such
damaged Party will be entitled to seek specific performance and injunctive
relief, without posting bond or other security, and without the necessity of
proving actual or threatened damages, which remedy such damaged party will be
entitled to seek in any court of competent jurisdiction. 

     

    41 

     

    

    
    

              9.3 Publications. If either Sanofi or Regeneron (the
“Publishing Party”) desires to publish or publicly present any
results from the Discovery Program in scientific journals, publications or
scientific presentations or otherwise, the Publishing Party shall provide the
other Party an advance final copy of any proposed publication or summary of a
proposed oral presentation relating to the information from the Discovery
Program prior to submission for publication or disclosure. Such other Party
shall have a reasonable opportunity to recommend any changes it reasonably
believes are necessary to preserve the confidentiality of its Confidential
Information and to recommend any changes it reasonably believes are necessary to
prevent any specific, material adverse effect to it as a result of the
publication or disclosure, to which the Publishing Party shall give due
consideration. If such other Party informs the Publishing Party, within thirty (30) days of
receipt (or such other period agreed to by the JRC) of an advance copy of a
proposed publication or summary of a proposed oral presentation, that such
publication in its reasonable judgment should not be published or presented, the
Publishing Party shall delay or prevent such disclosure or publication as
proposed by the other Party. In the case of patentable inventions, the delay
shall be sufficiently long to permit the timely preparation and filing of a
patent application(s) or application(s) for a certificate of invention on the
information involved. The Parties shall establish a publication review process
to ensure compliance with this Section 9.3. 

     

              9.4 Disclosures Concerning this
Agreement. The Parties
will mutually agree upon the contents of a their respective press releases with
respect to the execution of this Agreement and the License and Collaboration
Agreement which shall be issued simultaneously by both Parties on the Effective
Date. Sanofi and Regeneron agree not to (and to ensure that their respective
Affiliates do not) issue any other press releases or public announcements
concerning this Agreement or any other activities contemplated hereunder without
the prior written consent of the other Party (which shall not be unreasonably
withheld or delayed), except as required by a Governmental Authority or
applicable Law (including the rules and regulations of any stock exchange or
trading market on which a Party’s (or its parent entity’s) securities are
traded); provided that the Party intending to disclose such
information shall use reasonable efforts to provide the other Party advance
notice of such required disclosure, an opportunity to review and comment on such
proposed disclosure (which comments shall be considered in good faith by the
disclosing Party) and all reasonable cooperation to assist the other Party to
protect such information and shall limit the disclosure to that information
which is required to be disclosed. Notwithstanding the foregoing, without prior
submission to or approval of the other Party, either Party may issue press
releases or public announcements which incorporate information concerning this
Agreement or any activities contemplated hereunder which information was
included in a press release or public disclosure which was previously disclosed
under the terms of this Agreement or which contains only non-material factual
information regarding this Agreement. Except as required by a Governmental
Authority or applicable Law (including the rules and regulations of any stock
exchange or trading market on which a Party’s (or its parent entity’s) securities are traded), or in connection with
the enforcement of this Agreement, neither Party (or their respective
Affiliates) shall disclose to any Third Party, under any circumstances, any
financial terms of this Agreement that have not been previously disclosed
publicly pursuant to this Article 9 without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed; except
for disclosures to Third Parties that are bound by obligations of
confidentiality and nonuse substantially equivalent in scope to those included
herein with a term of at least five (5) years. Each Party acknowledges that the
other Party as a publicly traded company is legally obligated to make timely
disclosures of all material events relating to its business. The Parties
acknowledge that either or both Parties may be obligated to file a copy of this
Agreement with the United States Securities and Exchange Commission or its
equivalent in the Territory. Each Party will be entitled to make such filing but
shall cooperate with one another and use reasonable efforts to obtain
confidential treatment of confidential, including trade secret, information in
accordance with applicable Law. The filing Party will provide the non-filing
Party with an advance copy of the Agreement marked to show provisions for which
the filing Party intends to seek confidential treatment and will reasonably
consider the non-filing Party’s timely comments thereon. 

     

    42 

     

    

    
    

    ARTICLE 10 

     

    INDEMNITY 

     

              10.1 Indemnity and Insurance. 

     

                   (a) Sanofi will defend, indemnify and hold harmless Regeneron, its Affiliates
and their respective officers, directors, employees and agents (“Regeneron Indemnitees”) from and against all claims, demands,
liabilities, damages, penalties, fines and expenses, including reasonable
attorneys’ fees and costs (collectively, “Damages”), arising from or occurring as a result of a
Third Party’s claim, action, suit, judgment or settlement against a Regeneron
Indemnitee that is due to or based upon: 

     

                   (i) the negligence, recklessness, bad faith, intentional wrongful acts or
omissions of Sanofi or its Affiliates in connection with the Discovery Program,
except to the extent that Damages arise out of the negligence, recklessness, bad
faith or intentional wrongful acts, or omissions committed by Regeneron or its
Affiliates; or 

     

                   (ii) material breach by Sanofi of the terms of, or the inaccuracy of any
representation or warranty made by it in, this Agreement. 

     

                   (b) Regeneron will defend, indemnify and hold harmless Sanofi, its Affiliates
and their respective officers, directors, employees and agents (“Sanofi Indemnitees”) from and against
all Damages arising from or occurring as a result of a Third Party’s claim,
action, suit, judgment or settlement against a Sanofi Indemnitee that is due to
or based upon: 

     

                   (i) the negligence, recklessness, bad faith, intentional wrongful acts or
omissions of Regeneron or its Affiliates in connection with the Discovery
Program, except to the extent that Damages arise out of the negligence, recklessness, bad faith or intentional
wrongful acts, or omissions committed by Sanofi or its Affiliates; or

     

    43 

     

    

    
    

                   (ii) material breach by
Regeneron of the terms of, or the inaccuracy of any representation or warranty
made by it in, this Agreement.

     

              10.2 Indemnity Procedure. 

     

                   (a) The Party entitled to
indemnification under this Article 10 (an “Indemnified Party”) shall notify the Party potentially
responsible for such indemnification (the “Indemnifying Party”) within five (5) Business Days of becoming
aware of any claim or claims asserted or threatened in writing against the
Indemnified Party which could give rise to a right of indemnification under this
Agreement; provided, however, that the failure to give such notice shall
not relieve the Indemnifying Party of its indemnity obligation hereunder except
to the extent that such failure materially prejudices its rights hereunder.

     

                   (i) If the Indemnifying Party
has acknowledged in writing to the Indemnified Party the Indemnifying Party’s
responsibility for defending such claim, the Indemnifying Party shall have the
right to defend, at its sole cost and expense, such claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party; provided, however, that the Indemnifying Party may not enter
into any compromise or settlement unless (i) such compromise or settlement
includes as an unconditional term thereof, the giving by each claimant or
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim; and (ii) the Indemnified Party consents to such compromise or
settlement, which consent shall not be withheld or delayed unless such
compromise or settlement involves (A) any admission of legal wrongdoing by the
Indemnified Party, (B) any payment by the Indemnified Party that is not
indemnified hereunder or (C) the imposition of any equitable relief against the
Indemnified Party. If the Indemnifying Party does not elect to assume control of
the defense of a claim or if a good faith and diligent defense is not being or
ceases to be materially conducted by the Indemnifying Party, the Indemnified
Party shall have the right, at the expense of the Indemnifying Party, upon at
least ten (10) Business Days’ prior written notice to the Indemnifying Party of
its intent to do so, to undertake the defense of such claim for the account of
the Indemnifying Party (with counsel reasonably selected by the Indemnified
Party and approved by the Indemnifying Party, such approval not unreasonably
withheld or delayed), provided, that the Indemnified Party shall keep the
Indemnifying Party apprised of all material developments with respect to such
claim and promptly provide the Indemnifying Party with copies of all
correspondence and documents exchanged by the Indemnified Party and the opposing
party(ies) to such litigation. The Indemnified Party may not compromise or
settle such litigation without the prior written consent of the Indemnifying
Party, such consent not to be unreasonably withheld or delayed. 

     

    44 

     

    

    
    

                   (ii) The Indemnified Party may participate in, but not control, any defense or
settlement of any claim controlled by the Indemnifying Party pursuant to this
Section 10.2 and shall bear its own costs and expenses
with respect to such participation; provided, however, that the Indemnifying Party shall bear such
costs and expenses if counsel for the Indemnifying Party shall have reasonably
determined that such counsel may not properly represent both the Indemnifying
and the Indemnified Party. 

     

                   (iii) The amount of any Damages for which indemnification is provided under
this Article 10 will be reduced by the insurance proceeds
received, and any other amount recovered, if any, by the Indemnified Party in
respect of any Damages. 

     

                   (iv) If an Indemnified Party receives an indemnification payment pursuant to
this Article 10 and subsequently receives insurance proceeds
from its insurer with respect to the damages in respect of which such
indemnification payment(s) was made, the Indemnified Party will promptly pay to
the Indemnifying Party an amount equal to the difference (if any) between (i)
the sum of such insurance proceeds or other amounts received, and the
indemnification payment(s) received from the Indemnifying Party pursuant to this
Article 10 and (ii) the amount necessary to fully and
completely indemnify and hold harmless the Indemnified Party from and against
such Damages. However, in no event will such refund ever exceed the Indemnifying
Party’s indemnification payment(s) to the Indemnified Party under this
Article 10. 

     

    ARTICLE 11 

     

    FORCE MAJEURE 

     

         Neither Party will be held liable or responsible to the other Party nor
be deemed to have defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of this Agreement when such failure
or delay is caused by or results from causes beyond the reasonable control of
the affected Party including, without limitation, embargoes, acts of terrorism,
acts of war (whether war be declared or not), insurrections, strikes, riots,
civil commotions, or acts of God (“Force Majeure”). Such excuse from liability and
responsibility shall be effective only to the extent and duration of the
event(s) causing the failure or delay in performance and provided that the affected party has not caused such
event(s) to occur. The affected Party will notify the other Party of such Force
Majeure circumstances as soon as reasonably practical and will make every
reasonable effort to mitigate the effects of such Force Majeure circumstances.
In the event of a Force Majeure, the performance of the Party giving such
notification shall be abated and any time deadlines shall be extended for so
long as the performance is prevented by Force Majeure. In no event will any
Force Majeure extend beyond one hundred eighty (180) days. In the event of a
Force Majeure affecting satisfaction of the criteria set forth in Section 4.10,
the applicable time deadline set forth in Section 4.10 shall be extended for so
long as such Force Majeure continues, but in no event shall such extension
period exceed one hundred eighty (180) days. 

     

    45 

     

    

    
    

    ARTICLE 12 

     

    TERM AND TERMINATION 

     

              12.1 Term. The “Term” of this Agreement commenced on the Original
Agreement Effective Date and shall end upon the end of the Discovery Program,
including any Tail Period, unless this Agreement is earlier terminated in
accordance with this Article 12 in which event the Term shall end on the
effective date of such termination. 

     

              12.2 Termination For Material
Breach. Upon and subject
to the terms and conditions of this Section 12.2, this Agreement shall be terminable by a
Party in its entirety if the other Party commits a material breach of this
Agreement. Such notice of termination shall set forth in reasonable detail the
facts underlying or constituting the alleged breach (and specifically
referencing the provisions of this Agreement alleged to have been breached), and
the termination which is the subject of such notice shall be effective ninety
(90) days after the date such notice is given unless the breaching Party shall
have cured such breach within such ninety (90) day period. Notwithstanding the
foregoing, in the case of breach of a payment obligation not subject to a bona
fide dispute hereunder, the ninety (90) day period referred to in the
immediately preceding sentence shall instead be forty-five (45) days. For
purposes of this Section 12.2, the term “material breach” shall mean an
intentional, continuing (and uncured within the time period described above),
material breach by a Party as determined by binding arbitration consistent with
the provisions of Section 13.1 of this Agreement. 

     

              12.3 Termination for Insolvency. Either Party shall have the right to
terminate this Agreement in its entirety if, at any time, (a) the other Party
shall file in any court or agency pursuant to any statute or regulation of any
state or country, a petition in bankruptcy or insolvency or for reorganization
or for an arrangement or for the appointment of a receiver or trustee of the
Party or of its assets, or (b) if the other Party proposes a written agreement
of composition or extension of its debts, or (c) if the other Party shall be
served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or (d) if the other Party shall propose or be a party
to any dissolution or liquidation, or (e) if the other Party shall make an
assignment for the benefit of creditors. In the event that this Agreement is
terminated or rejected by a Party or its receiver or trustee under applicable
bankruptcy Laws due to such Party’s bankruptcy, then all rights and licenses
granted under or pursuant to this Agreement by such Party to the other Party
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
U.S. Bankruptcy Code and any similar Laws in any other country in the Territory,
licenses of rights to “intellectual property” as defined under Section 101(52)
of the U.S. Bankruptcy Code. The Parties agree that all intellectual property
rights licensed hereunder, including, without limitation, any Patent Rights in
any country of a Party covered by the license grants under this Agreement, are
part of the “intellectual property” as defined under Section 101(52) of the
Bankruptcy Code subject to the protections afforded the non-terminating Party
under Section 365(n) of the Bankruptcy Code, and any similar law or regulation
in any other country.

     

    46 

     

    

    
    

              12.4 Termination for Breach of
Standstill. Regeneron
shall have the unilateral right to terminate this Agreement in its entirety,
effective immediately upon written notice to Sanofi, if Sanofi or any of its
Affiliates shall have breached their obligations under any of Sections 3, 4 or 5
of the Investor Agreement (to the extent such sections of the Investor Agreement
is then in effect). Furthermore, Regeneron shall have the unilateral right to
terminate this Agreement in its entirety, effective immediately upon written
notice to Sanofi, if Sanofi or any of its Affiliates shall have (a) breached
their obligations under Section 20.16 of the Aventis Collaboration Agreement, to
the extent that such Section 20.16 remains in effect after the Effective Date,
or (b) breached its obligations under Section 5.3 of the Stock Purchase
Agreement, dated as of September 5, 2003, by and between Sanofi and Regeneron
(the “Aventis Stock Purchase Agreement”), to the extent that such Section 5.3
remains in effect after the Effective Date. Any such breach of the Investor
Agreement, the Aventis Stock Purchase Agreement or the Aventis Collaboration
Agreement, as the case may be, shall be treated as a breach of this Agreement.
Notwithstanding the foregoing and for the avoidance of doubt, Regeneron shall
not have the right to terminate this Agreement as a result of (i) a de minimus
breach of Section 3.1(a) of the Investor Agreement (to the extent such Section
3.1(a) is in effect after the Effective Date) or of Section 20.16(a) of the
Aventis Collaboration Agreement (to the extent such Section 20.16(a) remains in
effect after the Effective Date) or (ii) an inadvertent breach of Section 3.1(g)
of the Investor Agreement (to the extent such Section 3.1(g) is in effect after
the Effective Date) or an inadvertent breach of Section 20.16(g) of the Aventis
Collaboration Agreement (to the extent such Section 20.16(g) remains in effect
after the Effective Date), arising from informal discussions covering general
corporate or other business matters the purpose of which is not intended to
effectuate or lead to any of the actions referred to in paragraphs (a) through
(e) of such Section 20.16 or of paragraphs (a) through (e) of Section 3.1 of the
Investor Agreement, as applicable. Sanofi’s rights under Sections 2.16 and 2.17 shall survive termination of this Agreement
pursuant to this Section 12.4. 

     

              12.5 Termination for Breach of License and
Collaboration Agreement.
Notwithstanding anything to the contrary herein, (a) Regeneron shall have the
unilateral right to terminate this Agreement in its entirety, effective
immediately upon providing written notice to Sanofi, if Regeneron has terminated
the License and Collaboration Agreement, in its entirety, pursuant to Section
19.3, 19.4, or 19.5 of the License and Collaboration Agreement, and (b) Sanofi
shall have the unilateral right to terminate this Agreement in its entirety,
effective immediately upon providing written notice to Regeneron, if Sanofi has
terminated the License and Collaboration Agreement, in its entirety, pursuant to
Section 19.3 or 19.4 of the License and Collaboration Agreement. 

     

              12.6 Effect of Termination by Sanofi for
Breach. In addition to the
provisions of Section 12.8 below, notwithstanding anything herein to the
contrary, in the event that Sanofi terminates this Agreement pursuant to
Section 12.2 of this Agreement the following shall apply:

     

                   (a) Sanofi shall be granted a non-exclusive, non-transferable, royalty free,
worldwide license, without the right to sublicense, for a period that shall
expire eleven (11) years from the Original Agreement Effective Date, to the Mice
and the underlying Regeneron Intellectual Property for Sanofi and its Affiliates
to use to discover and develop MTCs for any and all purposes; 

     

    47 

     

    

    
    

                   (b) Regeneron shall perform a timely and expeditious technology transfer as
required by Sanofi to pursue its rights under subsection (a) without delay above subject to the execution
of a material transfer agreement containing non-financial terms and conditions
related to the use of the Mice consistent with Regeneron’s commercial license
agreements for the Mice; 

     

                   (c) the licenses granted to Regeneron under this Agreement shall
automatically terminate; 

     

                   (d) Sanofi shall be granted an exclusive, fully paid-up, non-transferable,
royalty-free, worldwide license, with the right to sublicense, under Regeneron
Target IP existing at the effective time of termination solely for use to
develop and commercialize Antibodies against Sanofi Targets (and for no other
uses), and the co-exclusive (with Regeneron and its Affiliates) fully paid-up,
non-transferable, royalty-free, worldwide license, with the right to sublicense
under Regeneron Target IP to develop and commercialize Antibodies against all
other Program Targets at the effective time of termination (and for no other
uses); 

     

                   (e) Sanofi’s rights under Sections 2.16, and 2.17 shall survive; and 

     

                   (f) Sanofi shall have no further funding obligations under Section 4.2 of the Agreement.

     

              12.7 Effect of Termination by Regeneron for
Breach. In addition to the
provisions of Sections 12.8 and 12.10 below, notwithstanding anything herein to the
contrary, in the event that Regeneron terminates this Agreement pursuant to
Section 12.2 or 12.4 of this Agreement, the following shall apply:

     

                   (a) the licenses granted to Sanofi under this Agreement shall automatically
terminate; 

     

                   (b) the rights granted to Sanofi under this Agreement in Sections 2.16 and 2.17 shall automatically terminate; 

     

                   (c) Regeneron shall be granted an exclusive, fully paid-up, non-transferable,
royalty-free, worldwide, exclusive license, with the right to sublicense, under
Sanofi Target IP existing at the effective time of termination solely for use to
develop and commercialize Antibodies against Program Targets other than Sanofi
Discovery Targets (and for no other uses), and the co-exclusive (with Sanofi and
its Affiliates) fully paid-up, non-transferable, royalty-free, worldwide
license, with the right to sublicense under Sanofi Target IP to develop and
commercialize Antibodies against all Sanofi Discovery Targets at the effective
time of termination (and for no other uses).

     

              12.8 Survival of Obligations. Subject to Sections 12.6, 12.7, and 12.11 and except as otherwise provided below, upon
expiration or termination of this Agreement, the rights and obligations of the
Parties hereunder shall terminate, and this Agreement shall cease to be of
further force or effect: 

     

    48 

     

    

    
    

                   (a) neither Sanofi nor Regeneron shall be relieved of any obligations
(including payment obligations) of such Party arising prior to such expiration
or termination, including, without limitation, the payment of any non-cancelable
costs and expenses incurred as part of the Discovery Program (even if such costs
and expenses arise following termination or expiration, as the case may be);
provided, however, that Sanofi shall not be obligated to pay or
reimburse Regeneron for any such costs or expenses in the event Sanofi
terminates this Agreement pursuant to Section 12.2 above; 

     

                   (b) the obligations of the Parties with respect to the protection and
nondisclosure of the other Party’s Confidential Information in accordance with
Article 9, as well as other provisions (including,
without limitation, Sections 2.11(b), 2.11(c), 2.12 (except as set forth in Section 12.6 above), 2.13 (except as set forth in Section 12.7 above), 2.16, 2.17, 6.1(e), 6.2(b), 6.2(c), 6.2(d)(as it relates to Joint Patent Rights),
7.2, 10.1, 10.2, this Article 12, and Article 13) which by their nature are intended to
survive any such expiration or termination, shall survive and continue to be
enforceable;

     

                   (c) for the avoidance of doubt, the early termination of this Agreement by
either Party, and the expiration of this Agreement shall not relieve either
Party of any of its royalty or other obligations under Article 4 with respect to any Royalty Product, for
which royalties remain payable to the other Party under this Agreement; and such
royalty provisions of Article 4 shall survive; 

     

                   (d) for the avoidance of doubt, the licenses granted in Sections 2.11(b)(3), 2.11(c), 2.12, and 2.13 shall survive the termination or expiration
of this Agreement; and

     

                   (e) such expiration or termination and this Article 12 shall be without prejudice to any rights or
remedies a Party may have for breach of this Agreement. 

     

              12.9 Return of Confidential
Information. Subject to
either Parties’ licenses that survive termination or expiration, Confidential
Information disclosed by the Disclosing Party, including permitted copies, shall
remain the property of the Disclosing Party. Subject to the terms of the License
and Collaboration Agreement (with respect to Licensed Products), upon the
earlier to occur of (a) the termination of this Agreement or (b) the expiration
of the Discovery Program, or upon written request of the Disclosing Party, the
Receiving Party shall promptly return to the Disclosing Party or, at the
Disclosing Party’s request, destroy, all documents or other tangible materials
representing the Disclosing Party’s Confidential Information (or any designated
portion thereof); provided that one (1) copy may be maintained in the
confidential files of the Receiving Party for the purpose of complying with the
terms of this Agreement. An officer of the Receiving Party also shall certify in
writing that it has satisfied its obligations under this Section 12.9 within ten (10) days of a written request by
the Disclosing Party. 

     

              12.10 Special Damages. If Regeneron terminates this Agreement
pursuant to Section 12.2 or 12.4, then Sanofi shall pay to Regeneron, within
sixty (60) days of the termination of this Agreement, in addition to any other
amount payable by Sanofi to Regeneron under this Agreement under Laws, or
pursuant to any contractual remedies available to Regeneron, an amount equal to
the sum of the Maximum Annual Discovery Program Costs for each of the years, including the remaining
unpaid Maximum Annual Discovery Program Cost for the Contract Year in which such
termination is effective, that would have been the remainder of the term of the
Discovery Program but for the termination of this Agreement.

     

    49 

     

    

    
    

              12.11 Termination by Sanofi At
Will. Sanofi shall be
entitled to terminate this Agreement at any time (except following a material
breach of this Agreement by Sanofi pursuant to Section 12.2) without cause upon three months’ written
notice to Regeneron. If Sanofi terminates the Agreement under this Section 12.11, then Sanofi shall pay to Regeneron within
five (5) days of its notice of termination, an amount equal to the sum of the
Maximum Annual Discovery Program Costs for each of the years, including the
Remaining Unpaid Maximum Annual Discovery Program Cost for the Contract Year in
which such termination is effective, that would have been the remainder of the
term of the Discovery Program but for the termination of this Agreement. In
addition, Sanofi shall complete GLP toxicology studies conducted by Sanofi at
the time of termination, if applicable, and such other critical activities
conducted by Sanofi at the time of termination that cannot be transferred to
Regeneron without a material adverse effect on the completion of such
activities. In the event of such termination, in addition to the provisions of
Section 12.8, the following shall apply: 

     

                   (a) the rights granted to Sanofi under Sections 2.16 and 2.17 shall automatically terminate; and

     

                   (b) Regeneron shall be granted a non-exclusive, non-transferable, royalty
bearing (in accordance with Section 4.5) worldwide license with the right to
sublicense under Sanofi Target IP existing at the effective time of termination
solely for use to develop and commercialize (i) MTCs against Program Targets,
and (ii) any other Antibodies against Program Targets in existence and included
in the Discovery Program at the effective time of termination. 

     

    ARTICLE 13 

     

    ARBITRATION 

     

              13.1 Binding Arbitration. In the event the Parties cannot reach
agreement with respect to (i) the commercial reasonableness of the budget for
the Initial Development Plan for a Product Candidate, (ii) the royalty on Net
Sales of Immunoconjugates under Section 2.11(d)(i) of this Agreement, (iii) whether a breach
constitutes a “material breach” as described in Section 12.2 of this Agreement, and (iv) audits under
Section 7.2(d) above, and such disputes are not resolved by
the Executive Officers in accordance with Section 3.3(b) above, then the following shall apply:

     

                   (a) General. The respective disputed issue shall be
referred to binding arbitration by one (1) arbitrator who shall be an
independent expert in the pharmaceutical or biotechnology industry mutually
acceptable to the Parties. The Parties shall use their best efforts to mutually
agree upon one (1) arbitrator; provided, however, that if the Parties have not done so within
ten (10) days after initiation of arbitration hereunder, or such longer period
of time as the Parties have agreed to in writing, then such arbitrator shall be
an independent expert as described in the preceding sentence selected by the New
York office of the American Arbitration Association. Such arbitration shall be
limited to casting the deciding vote with respect to the disputed issues as more fully described in
Sections 13.1 (b)-(e) below. In connection therewith, each Party
shall submit to the arbitrator in writing its position on and desired resolution
of such matter. Such submission shall be made within ten (10) days of the
selection or appointment of the arbitrator, and the arbitrator shall rule on
such matter within ten (10) days of receipt of the written submissions by both
Parties. The arbitrator shall select one of the Party’s positions as his or her
decision, and shall not have authority to render any substantive decision other
than to so select the position of either Regeneron or Sanofi. Except as provided
in the preceding sentence, such arbitration shall be conducted in accordance
with the then-current Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator’s ruling shall be final and binding upon the
Parties. The costs of any arbitration conducted pursuant to this Section 13.1 shall be borne equally by the Parties. The
Parties shall use diligent efforts to cause the completion of any such
arbitration within sixty (60) days following a request by any Party for such
arbitration.

     

    50 

     

    

    
    

                   (b) Initial Development Plan
Budget. The specific issue
that shall be submitted to the arbitrator shall be limited to determining the
overall commercial reasonableness of the budget that is the subject of the
dispute. If the arbitrator determines that such budget is commercially
reasonable, then the dispute shall be deemed finally resolved and such
resolution shall be binding on the Parties. However, if the arbitrator
determines that such budget is not commercially reasonable, then the arbitrator
shall, within fifteen (15) days after such determination, render a final
determination as to what modifications must be made to such budget in order for
it to be commercially reasonable (the “Budget Modification
Decision”). In connection
with reaching a Budget Modification Decision, the arbitrator may order the
Parties to produce any documents or other information which are relevant to such
final decision, and the Parties shall submit such documents or other
information, together with their respective proposed resolutions which shall
consist of their proposed modifications to the budget in order for it to be
commercially reasonable, at least five (5) days prior to the date a Budget
Modification Decision is required to be rendered as provided above. In rendering
the final decision, the arbitrator shall be limited to choosing a resolution
proposed by a Party without modification. 

     

                   (c) Royalty on Net Sales of
Immunoconjugates: The
issue that shall be submitted to the arbitrator shall be the royalty rate to
apply under Section
2.11(d)(i).

     

                   (d) Material Breach Under Section 12.2:
The issue that shall be
submitted to the arbitrator shall be whether the breach committed by a Party
meets the requirements for a material breach under Section 12.2 of this Agreement.

     

                   (e) Audit Disputes. The issue that shall be submitted to the
arbitrator shall be disputes as described under Section 7.2(d) of this Agreement.

     

    ARTICLE 14 

     

    MISCELLANEOUS 

     

              14.1 Governing Law; Submission to
Jurisdiction. This
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York, without regard to the conflict of laws principles thereof
that would require the application of the Law of any other jurisdiction. Except
as set forth in Article 13 and 7.2(d), the Parties irrevocably and unconditionally submit to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York solely and specifically for the purposes of any action or proceeding
arising out of or in connection with this Agreement. 

     

    51 

     

    

    
    

              14.2 Waiver. Waiver by a Party of a breach hereunder by
the other Party shall not be construed as a waiver of any subsequent breach of
the same or any other provision. No delay or omission by a Party in exercising
or availing itself of any right, power or privilege hereunder shall preclude the
later exercise of any such right, power or privilege by such Party. No waiver
shall be effective unless made in writing with specific reference to the
relevant provision(s) of this Agreement and signed by a duly authorized
representative of the Party granting the waiver. 

     

              14.3 Notices. All notices, instructions and other
communications required or permitted hereunder or in connection herewith shall
be in writing, shall be sent to the address of the relevant Party set forth on
Schedule 10 attached hereto and shall be (a) delivered personally, (b) sent via
a reputable nationwide overnight courier service, or (c) sent by facsimile
transmission, with a confirmation copy to be sent by registered or certified
mail, return receipt requested, postage prepaid. Any such notice, instruction or
communication shall be deemed to have been delivered upon receipt if delivered
by hand, one (2) Business Days after it is sent via a reputable nationwide
overnight courier service or when transmitted with electronic confirmation of
receipt, if transmitted by facsimile (if such transmission is made during
regular business hours of the recipient on a Business Day; or otherwise, on the
next Business Day following such transmission). Either Party may change its
address by giving notice to the other Party in the manner provided above.

     

              14.4 Entire Agreement. This Agreement and the License and
Collaboration Agreement contain the complete understanding of the Parties with
respect to the subject matter hereof and thereof and supersede all prior
understandings and writings relating to the subject matter hereof and thereof.
It is understood and agreed that in the event of any conflict or inconsistency
between this Agreement and the License and Collaboration Agreement, this
Agreement shall control regarding the Parties’ rights and obligations with
respect to any Antibody (including any MTC), Lead Candidate or Product Candidate
in the Discovery Program (prior to Sanofi’s exercise of its Opt-In Rights with
respect to such Product Candidate), and the License and Collaboration Agreement
shall control regarding the Parties’ rights and obligations with respect to any
Licensed Product from and after the time a Product Candidate becomes a Licensed
Product. 

     

              14.5 Amendments. No provision in this Agreement shall be
supplemented, deleted or amended except in a writing executed by an authorized
representative of each of Sanofi and Regeneron. 

     

              14.6 Interpretation. The captions to the several Articles and
Sections of this Agreement are included only for convenience of reference and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, this Agreement. In this Agreement: (a) the word “including”
shall be deemed to be followed by the phrase “without limitation” or like
expression; (b) references to the singular shall include the plural and vice
versa; (c) references to masculine, feminine and neuter pronouns and expressions
shall be interchangeable; and (d) the
words “herein” or “hereunder” relate to this Agreement. Each accounting term
used herein that is not specifically defined herein shall have the meaning given
to it under GAAP, but only to the extent consistent with its usage and the other
definitions in this Agreement. 

     

    52 

     

    

    
    

              14.7 Severability. If, under applicable Laws, any provision
hereof is invalid or unenforceable, or otherwise directly or indirectly affects
the validity of any other material provision(s) of this Agreement in any
jurisdiction (“Modified Clause”), then, it is mutually agreed that this
Agreement shall endure and that the Modified Clause shall be enforced in such
jurisdiction to the maximum extent permitted under applicable Laws in such
jurisdiction; provided that the Parties shall consult and use all
reasonable efforts to agree upon, and hereby consent to, any valid and
enforceable modification of this Agreement as may be necessary to avoid any
unjust enrichment of either Party and to match the intent of this Agreement as
closely as possible, including the economic benefits and rights contemplated
herein.

     

              14.8 Assignment. Except as otherwise expressly provided
herein, neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Sanofi or Regeneron without (a) the prior written
consent of Regeneron in the case of any assignment by Sanofi or (b) the prior
written consent of Sanofi in the case of an assignment by Regeneron, except in
each case (i) to an Affiliate of the assigning Party that has and will continue
to have the resources and financial wherewithal to fully meet its obligations
under this Agreement, provided that the assigning Party shall remain
primarily liable hereunder notwithstanding any such assignment, or (ii) to any
Third Party who acquires all or substantially all of the business of the
assigning Party by merger, sale of assets or otherwise, so long as such
Affiliate or Third Party agrees in writing to be bound by the terms of this
Agreement. The assigning Party shall remain primarily liable hereunder
notwithstanding any such assignment. Any attempted assignment in violation
hereof shall be void. 

     

              14.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns, and shall also inure to the benefit of the Regeneron
Indemnitees and Sanofi Indemnitees to the extent provided in the last sentence
of Section 14.12 below. 

     

              14.10 Affiliates. Each Party may carry out its obligations
under this Agreement through its Affiliates and absolutely, unconditionally and
irrevocably guarantees to the other Party prompt performance when due and at all
times thereafter of the responsibilities, liabilities, covenants, warranties,
agreements and undertakings of its Affiliates pursuant to this Agreement.
Without limiting the foregoing, neither Party shall cause or permit any of its
Affiliates to commit any act (including any act or omission) which such Party is
prohibited hereunder from committing directly. Sanofi shall not, directly or
indirectly, cause or direct Sanofi Pasteur or Merial Limited to take any action
for which Sanofi and its Affiliates are prohibited hereunder from committing.
Each Party represents and warrants to the other Party that it has licensed or
will license from its Affiliates the Patents and Know-How owned by its
Affiliates that are to be licensed (or sublicensed) to the other Party under
this Agreement. 

     

    53 

     

    

    
    

              14.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument. 

     

              14.12 Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party, including any
creditor of any Party hereto. No Third Party shall obtain any right under any
provision of this Agreement or shall by reason of any such provision make any
claim in respect of any debt, liability or obligation (or otherwise) against any
Party hereto. Notwithstanding the foregoing, Article 10 is intended to benefit, in addition to the
Parties, the other Regeneron Indemnitees and Sanofi Indemnitees as if they were
parties hereto, but this Agreement is enforceable only by the Parties.

     

              14.13 Relationship of the Parties. Each Party shall bear its own costs incurred
in the performance of its obligations hereunder without charge or expense to the
other Party except as expressly provided in this Agreement. Neither Sanofi nor
Regeneron shall have any responsibility for the hiring, termination or
compensation of the other Party’s employees or for any employee compensation or
benefits of the other Party’s employees. No employee or representative of a
Party shall have any authority to bind or obligate the other Party to this
Agreement for any sum or in any manner whatsoever, or to create or impose any
contractual or other liability on the other Party without said Party’s approval.
For all purposes, and notwithstanding any other provision of this Agreement to
the contrary, Regeneron’s legal relationship under this Agreement to Sanofi, and
Sanofi’s legal relationship under this Agreement to Regeneron, shall be that of
an independent contractor. Nothing in this Agreement shall be construed to
establish a relationship of partners or joint ventures between the Parties or
any of their respective Affiliates. 

     

              14.14 Limitation of Damages. EXCEPT AS SET FORTH IN SECTION 12.10, IN NO EVENT SHALL REGENERON OR SANOFI BE
LIABLE FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY,
REGARDLESS OF THE THEORY OF LIABILITY (INCLUDING CONTRACT, TORT, NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE) AND REGARDLESS OF ANY PRIOR NOTICE OF SUCH
DAMAGES. HOWEVER, NOTHING IN THIS SECTION 14.14 IS INTENDED TO LIMIT OR RESTRICT THE
INDEMNIFICATION RIGHTS AND OBLIGATIONS OF EITHER PARTY HEREUNDER WITH RESPECT TO
THIRD PARTY CLAIMS . 

     

              14.15 Non-Solicitation. During the Term and for a period of two (2)
years thereafter, neither Party shall solicit or otherwise induce or attempt to
induce any employee of the other Party directly involved in the performance of
the Discovery Program to leave the employment of the other Party and accept
employment with the first Party. Notwithstanding the foregoing, this prohibition
on solicitation does not apply to actions taken by a Party solely as a result of
an employee’s affirmative response to a general recruitment effort carried
through a public solicitation or general solicitation. 

     

              14.16 No Strict Construction. This Agreement has been prepared jointly and
will not be construed against either Party. 

     

    54 

     

    

    
    

    [Remainder of page intentionally left blank;
signature page follows] 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    55 

     

    

    
    

         IN WITNESS WHEREOF, Sanofi and Regeneron have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written. 

     

    
      	
            	AVENTIS PHARMACEUTICALS
INC.
	
            	 
	
            	 
	
            	By	       	/s/ John M.
      Spinnato	 
	
            	
            	
            	Name: John M. Spinnato
	
            	
            	
            	Title: VP & General Counsel, US
      Legal
	
            	 
	
            	 
	
            	 
	
            	By	
            	/s/ Christian
      Blin	 
	
            	
            	
            	Name: Christian Blin
	
            	
            	
            	Title: VP, R&D Finance
	
            	 
	 	 
	
            	 
	
            	 
	
            	REGENERON PHARMACEUTICALS,
  INC.
	
            	 
	
            	 
	
            	By	
            	/s/ Murray
      Goldberg	 
	
            	
            	
            	Name: Murray A. Goldberg
	
            	
            	
            	Title: Senior Vice President, Finance
      &
	
            	Administration and Chief Financial
      Officer

    

    56 

     

    

    
    

    Execution Version

     

    SCHEDULE 1

     

    ************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    SCHEDULE 2 

     

    Excluded Targets 

     

    ***************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    2

     

    

    
    

    SCHEDULE 3

     

    Initial
Immunized Target List

     

    ************************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    3

     

    

    
    

    Execution Version

     

    SCHEDULE 4

     

    Lead
Candidate Criteria

     

    ***********************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    Execution Version

     

    SCHEDULE 5

     

    Manufacturing
Cost

     

    ******************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    Execution Version

     

    SCHEDULE 6

     

    Initial Rolling Target List

     

    ***************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    Execution Version

     

    SCHEDULE 7

     

    Expansion Plan 

     

         Technical Appendices 1 through 4 describe the general capacity expansion
plans for Regeneron’s Rensselaer Operations in
Rensselaer, New York. The “IN” items described in appendices 1 and 2 will be initiated immediately. 
********************************************** 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    SCHEDULE 8

     

    ************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    2

     

    

    
    

    Execution
Version

     

    SCHEDULE
9

     

    ************

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

    
    

    Execution Version

     

    SCHEDULE 10

     

    Notices 

     

    If to Sanofi:

     

    Aventis Pharmaceuticals
Inc. 
200 Crossing Boulevard 
Bridgewater, New Jersey 08807 
United
States 
Attn: President US
Research and Development 

     

    
      	Copy:	  	Sanofi Aventis
	
            	
            	174 Avenue de France
	
            	
            	75013 Paris
	
            	
            	France
	Attn:	
            	Senior Vice President and
      General Counsel

    

    If to Regeneron:

     

    Regeneron
Pharmaceuticals, Inc. 
777 Old Saw Mill River Road 
Tarrytown, New York
10591 
Attention: President & CEO 
Copy: General Counsel 

     

    

    
    

    Execution Version

     

    EXHIBIT A

     

    Form of Opt-In Notice 

     

    [Sanofi Letterhead]

     

    [DATE] 

     

    Regeneron
Pharmaceuticals, Inc. 
777 Old Saw Mill River Road 
Tarrytown, New York
10591 
Attention: President & CEO 
Copy: General Counsel Regeneron
Pharmaceuticals, Inc. 

     

         Reference is hereby made to the Amended and Restated Discovery and
Preclinical Development Agreement (the “Discovery Agreement”) by and between
Aventis Pharmaceuticals Inc., a [ ], corporation with a principal place of
business located at
[                      
], and Regeneron Pharmaceuticals, Inc., a New York corporation with a principal
place of business located at 777 Old Saw Mill River Road, Tarrytown, New York
10591. Capitalized terms used herein shall have the defined meanings set forth
in the Discovery Agreement. 

     

         Pursuant to Section 5.4 of the Discovery Agreement, Sanofi hereby
provides this Opt-In Notice to Regeneron to license [INSERT PRODUCT CANDIDATE]
under the License and Collaboration Agreement. Effective immediately, [INSERT
PRODUCT CANDIDATE] shall be considered a Licensed Product. 

     

    
      	
            	AVENTIS PHARMACEUTICALS
INC.
	
            	

 
	
            	 	 
	
            	Name:
	
            	 
	
            	            
      Title:

    

    

    
    

    Execution Version

     

    EXHIBIT B

     

    ***************exhibit10-15.htm

    
      	
              Execution Version

            	
              
                Exhibit 10.15

                 

                Portions of this Exhibit Have
Been Omitted and Separately
      Filed
with the Securities and Exchange Commission
with a Request for
      Confidential Treatment

              

            

    

     

     

     

     

     

     

     

     

     

     

     

    AMENDED AND RESTATED

     

    LICENSE AND COLLABORATION
AGREEMENT 

     

    By and Among 

     

    AVENTIS PHARMACEUTICALS INC.,

     

    SANOFI-AVENTIS AMERIQUE DU
NORD 

     

    and 

     

    REGENERON PHARMACEUTICALS,
INC. 

     

    Dated as of November 10,
2009

     

     

     

     

     

     

     

    

    
    

    TABLE OF CONTENTS 

     

    
      	
            	
            	
            	
            	Page
	ARTICLE I DEFINITIONS	2
	          	1.1	     	"Additional Major Market Country"	2
	
            	1.2	
            	"Affiliate"	2
	
            	1.3	
            	"Ancillary Agreements"	2
	
            	1.4	
            	"Anticipated First Commercial Sale"	3
	
            	1.5	
            	"Approval"	3
	 	1.6	
            	"Aventis LLC"	3
	
            	1.7	
            	"Aventis Collaboration Agreement"	3
	
            	1.8	
            	"Aventis Stock Purchase Agreement"	3
	
            	1.9	
            	"BLA"	3
	
            	1.10	
            	"Business Day"	3
	
            	1.11	
            	"Clinical Supply Cost"	3
	
            	1.12	
            	"Clinical Supply Requirements"	4
	
            	1.13	 	"Co-Commercialize" or "Co-Commercialization"	4
	
            	1.14	
            	"Co-Commercialization Country"	4
	
            	1.15	
            	"COGS"	4
	
            	1.16	
            	"Commercial Overhead Charge"	4
	
            	1.17	
            	"Commercial Supply Cost"	4
	
            	1.18	
            	"Commercial Supply Requirements"	4
	
            	1.19	
            	"Commercialize" or "Commercialization"	4
	
            	1.20	
            	"Commercially Reasonable Efforts"	5
	
            	1.21	
            	"Committee"	5
	
            	1.22	
            	"Competing Opt-Out Product"	5
	
            	1.23	
            	"Competing Product"	5
	
            	1.24	
            	"Confidentiality Agreements"	5
	
            	1.25	
            	"Consolidated Payment Report"	5
	
            	1.26	
            	"Contract Sales Force"	5
	
            	1.27	
            	"Contract Year"	5
	
            	1.28	
            	"Controlling Party"	6
	
            	1.29	
            	"Co-Promote" or "Co-Promotion"	6
	
            	1.30	
            	"Country/Region Commercialization Budget"	6
	
            	1.31	
            	"Country/Region Commercialization Plan"	6
	
            	1.32	
            	"Country/Region Commercialization Committee", or "CRCC"	6
	
            	1.33	
            	"Detail"	6
	
            	1.34	
            	"Develop" or "Development"	6
	
            	1.35	
            	"Development Costs"	7
	
            	1.36	
            	"Development FTE Cost"	7
	
            	1.37	
            	"Development FTE Rate"	8
	
            	1.38	
            	"Development Plan"	8
	
            	1.39	
            	"Discovery Program"	8
	
            	1.40	
            	"EMEA"	8

    

    i 

     

    

    
    

    
      	          	1.41	     	"Executive Officers"	8
	
            	1.42	
            	"FDA"	8
	
            	1.43	
            	"Field"	8
	
            	1.44	
            	"Finished Product"	8
	
            	1.45	
            	"First Commercial Sale"	8
	
            	1.46	
            	"Formulated Bulk Product"	8
	
            	1.47	
            	"FTE"	8
	
            	1.48	
            	"GAAP"	8
	
            	1.49	
            	"Global Commercialization Budget"	9
	
            	1.50	
            	"Global Commercialization Plan"	9
	
            	1.51	
            	"Global Development Budget"	9
	
            	1.52	
            	"Global Development Plan"	9
	 	1.53	
            	"Good Practices"	9
	
            	1.54	
            	"Governmental Authority"	9
	
            	1.55	 	"IAS/IFRS"	9
	
            	1.56	
            	"ICH"	9
	
            	1.57	
            	"IND"	9
	
            	1.58	
            	"Indication"	9
	
            	1.59	
            	"Initial Development Plan"	9
	
            	1.60	
            	"Initial IND Filing Date"	10
	
            	1.61	
            	"Investor Agreement"	10
	
            	1.62	
            	"Joint Patent Rights"	10
	
            	1.63	
            	"Know-How"	10
	
            	1.64	
            	"Law" or "Laws"	10
	
            	1.65	
            	"Lead Regulatory Party"	10
	
            	1.66	
            	"Legal Dispute"	10
	
            	1.67	
            	"License"	10
	
            	1.68	
            	"Licensed Products"	10
	
            	1.69	
            	"Major Market Country"	10
	
            	1.70	
            	"Manufacture" or "Manufacturing"	10
	
            	1.71	
            	"Marketing Approval"	11
	
            	1.72	
            	"Manufacturing Plan"	11
	
            	1.73	
            	"Medical Post-Approval Cost"	11
	
            	1.74	
            	"Medical Post-Approval FTE Rate"	11
	
            	1.75	
            	"Net Sales"	11
	
            	1.76	
            	"New Information"	12
	
            	1.77	
            	"Non-Approval Trials"	13
	
            	1.78	
            	"Opt-In Right"	13
	
            	1.79	
            	"Opt-Out Product"	13
	
            	1.80	
            	"Other Shared Expenses"	13
	
            	1.81	
            	"Out-of-Pocket Costs"	13
	
            	1.82	
            	"Party Information"	13
	
            	1.83	
            	"Patent Application"	13
	
            	1.84	
            	"Patent Rights"	13
	
            	1.85	
            	"Patents"	13
	
            	1.86	
            	"Person"	13

 

    ii 

     

    

    
    

    
      	          	1.87	    
    	"Phase 3 Trial"	13
	
            	1.88	
            	"Plan"	14
	
            	1.89	
            	"Positive Phase 3 Trial
    Results"	14
	
            	1.90	
            	"Pre-Launch Marketing Expenses"	14
	
            	1.91	
            	"Pricing Approval"	14
	
            	1.92	
            	"Product Candidate"	14
	
            	1.93	
            	"Product Trademark"	14
	
            	1.94	
            	"Promotional Materials"	14
	
            	1.95	
            	"Quarter" or "Quarterly"	14
	
            	1.96	
            	"Regeneron Intellectual Property"	14
	
            	1.97	
            	"Regeneron Know-How"	15
	
            	1.98	
            	"Regeneron Patent Rights"	15
	
            	1.99	
            	"Region"	15
	
            	1.100	
            	"Registration Filing"	15
	
            	1.101	
            	"Regulatory Authority"	15
	
            	1.102	
            	"Reporting Country/Region"	15
	
            	1.103	
            	"Rest of World" or "ROW"	15
	
            	1.104	
            	"Rest of World Country"	15
	
            	1.105	
            	"ROW CPI"	15
	
            	1.106	
            	"Sales Force Cost"	15
	
            	1.107	
            	"Sales Force FTE Rate"	16
	
            	1.108	
            	"Sanofi Intellectual Property"	16
	
            	1.109	
            	"Sanofi Know-How"	16
	
            	1.110	
            	"Sanofi Patent Rights"	16
	
            	1.111	
            	"Sanofi Stock Purchase
    Agreement"	16
	
            	1.112	
            	"Shared Commercial Expenses"	16
	
            	1.113	
            	"Shared Phase 3 Trial Costs"	18
	
            	1.114	
            	"Sublicensee"	18
	
            	1.115	
            	"Target"	18
	
            	1.116	
            	"Terminated Licensed Product"	18
	
            	1.117	
            	"Termination Notice Period"	18
	
            	1.118	
            	"Territory"	18
	
            	1.119	
            	"Third Party"	18
	
            	1.120	
            	"United States," "US" or "U.S."	18
	
            	1.121	
            	"US CPI"	18
	
            	1.122	
            	"Valid Claim"	18
	
            	1.123	
            	Additional Definitions	19
	ARTICLE II COLLABORATION	21
	
            	2.1	
            	Scope of Collaboration	21
	
            	2.2	
            	Compliance With Law	21
	 	2.3	 	Further Assurances and Transaction
      Approvals	21
	
            	2.4	
            	Compliance with Third Party Agreements	21
	
            	2.5	
            	Plans	22
	
            	2.6	
            	Limitation on Exercise of Rights Outside of Collaboration	22

    

    iii 

     

    

    
    

    
      	ARTICLE III MANAGEMENT	27
	          	3.1	     	Committees/Management	27
	
            	3.2	
            	Joint Steering Committee	27
	
            	3.3	
            	Joint Development Committee	28
	
            	3.4	
            	Joint Commercialization Committee
    	29
	
            	3.5	
            	Country/Region Commercialization Committees	31
	
            	3.6	
            	Joint Finance Committee	32
	
            	3.7	
            	Joint Manufacturing Committee	32
	
            	3.8	
            	Membership	32
	
            	3.9	
            	Meetings	32
	
            	3.10	
            	Decision-Making	32
	
            	3.11	
            	Resolution of Governance Matters	33
	ARTICLE IV LICENSE GRANTS	34
	
            	4.1	
            	Regeneron License Grants	34
	
            	4.2	
            	Sanofi License Grants	34
	
            	4.3	
            	Newly Created Intellectual Property	34
	
            	4.4	
            	Sublicensing	35
	
            	4.5	
            	No Implied License	35
	
            	4.6	
            	Retained Rights	35
	ARTICLE V DEVELOPMENT
    ACTIVITIES	36
	
            	5.1	
            	Development of Licensed
    Products	36
	
            	5.2	
            	Global Development Plans	36
	
            	5.3	
            	Global Development Budgets	37
	
            	5.4	
            	Development Reports	37
	
            	5.5	
            	Review of Clinical Trial
    Protocols	37
	
            	5.6	
            	Regeneron Early Development Opt-Out	37
	ARTICLE VI COMMERCIALIZATION	38
	
            	6.1	
            	Commercialization of Licensed Products in the Field in the
      Territory	38
	
            	6.2	
            	Global Commercialization
    Plan(s)	38
	
            	6.3	
            	Country/Region Commercialization Plans	39
	
            	6.4	
            	Commercialization Efforts; Sharing of
      Commercial Information	40
	
            	6.5	
            	Co-Commercialization of Licensed Products	40
	
            	6.6	
            	Licensed Product Pricing and Pricing
      Approvals in the Territory	42
	
            	6.7	
            	Sales and Licensed Product Distribution in the Territory;
      Other	
            
	
            	
            	
            	Responsibilities	43
	
            	6.8	
            	Contract Sales Force	43
	
            	6.9	
            	Promotional Materials	43
	
            	6.10	
            	Promotional Claims/Compliance	44
	
            	6.11	 	Restriction on Bundling in the
      Territory	44
	 	6.12	
            	Inventory Management	44
	
            	6.13	
            	Medical and Consumer Inquiries
	44
	
            	6.14	
            	Market Exclusivity Extensions	44
	
            	6.15	
            	Post Marketing Clinical Trials
	45

    

    iv 

     

    

    
    

    
      	ARTICLE VII CLINICAL AND REGULATORY
      AFFAIRS	45
	          	7.1	     	Ownership of Approvals and Registration Filings	45
	
            	7.2	
            	Regulatory Coordination	45
	
            	7.3	
            	Regulatory Events	46
	
            	7.4	
            	Pharmacovigilance and Product
      Complaints	47
	
            	7.5	
            	Regulatory Inspection or Audit	47
	
            	7.6	
            	Recalls and Other Corrective
      Actions	48
	ARTICLE VIII MANUFACTURING AND
      SUPPLY	48
	
            	8.1	
            	Manufacture and Supply of Clinical
      Supply Requirements of Formulated	
            
	
            	
            	
            	Bulk Product	48
	
            	8.2	
            	Finished Product Supply of Clinical
      Supply Requirements	49
	
            	8.3	
            	Manufacture and Supply of Commercial
      Supply Requirements	49
	
            	8.4	
            	Supply Agreement	50
	
            	8.5	
            	Process Development and Manufacturing
      Plans	50
	
            	8.6	
            	Manufacturing Shortfall	51
	
            	8.7	
            	Manufacturing Compliance	51
	ARTICLE IX PERIODIC REPORTS;
      PAYMENTS	51
	
            	9.1	
            	Development Costs	51
	
            	9.2	
            	Milestone Payments	51
	
            	9.3	
            	Royalties	51
	
            	9.4	
            	Sharing of Profits from Licensed
      Products	52
	
            	9.5	
            	Periodic Reports	52
	
            	9.6	
            	Funds Flow	53
	
            	9.7	
            	Invoices and Documentation	53
	
            	9.8	
            	Payment Method and Currency	53
	
            	9.9	
            	Late Payments	53
	
            	9.10	
            	Taxes	54
	
            	9.11	
            	Adjustments to FTE Rates	54
	
            	9.12	
            	Resolution of Payment Disputes	54
	ARTICLE X DISPUTE RESOLUTION	54
	
            	10.1	
            	Resolution of Disputes	54
	
            	10.2	
            	Governance Disputes	55
	
            	10.3	
            	Legal Disputes	55
	
            	10.4	
            	Expert Panel	55
	
            	10.5	
            	No Waiver	57
	ARTICLE XI TRADEMARKS AND CORPORATE
      LOGOS	57
	
            	11.1	
            	Corporate Names	57
	
            	11.2	
            	Selection of Product
Trademarks	57
	
            	11.3	
            	Ownership of Product
Trademarks	58
	
            	11.4	
            	Prosecution and Maintenance of Product
      Trademark(s)	58
	
            	11.5	
            	License to the Product
      Trademark(s)	58
	
            	11.6	
            	Use of Corporate Names	59

    

    v 

     

    

    
    

    
      	ARTICLE XII NEWLY CREATED INVENTIONS AND
      KNOW-HOW	59
	          	12.1	     	Ownership of Newly Created Intellectual Property	59
	
            	12.2	
            	Prosecution and Maintenance of Patent
      Rights	61
	
            	12.3	
            	Interference, Opposition and Reissue	64
	ARTICLE XIII INTELLECTUAL PROPERTY
      LITIGATION AND LICENSES	64
	
            	13.1	
            	Third Party Infringement Suits	64
	
            	13.2	
            	Patent Marking	66
	
            	13.3	
            	Third Party Infringement Claims; New Licenses	66
	ARTICLE XIV BOOKS, RECORDS AND
      INSPECTIONS; AUDITS AND	
            
	
            	ADJUSTMENTS	67
	
            	14.1	
            	Books and Records	67
	
            	14.2	
            	Audits and Adjustments	67
	
            	14.3	
            	GAAP/IAS/IFRS	68
	ARTICLE XV REPRESENTATIONS, WARRANTIES
      AND COVENANTS	68
	
            	15.1	
            	Due Organization, Valid Existence and Due Authorization;
      Financial	
            
	
            	
            	
            	Capability	68
	
            	15.2	
            	Knowledge of Pending or Threatened
      Litigation	68
	
            	15.3	
            	Additional Regeneron Representations, Warranties and
      Covenants	68
	
            	15.4	
            	Disclaimer of Warranties	69
	
            	15.5	
            	Mutual Covenants	70
	ARTICLE XVI CONFIDENTIALITY	70
	
            	16.1	
            	Confidential Information	70
	
            	16.2	
            	Injunctive Relief	71
	
            	16.3	
            	Publication of New Information	72
	
            	16.4	
            	Disclosures Concerning this
      Agreement	72
	ARTICLE XVII INDEMNITY	73
	
            	17.1	
            	Indemnity and Insurance	73
	
            	17.2	
            	Indemnity Procedure	74
	ARTICLE XVIII FORCE MAJEURE	76
	ARTICLE XIX TERM AND
    TERMINATION	76
	
            	19.1	
            	Term/Expiration of Term	76
	
            	19.2	
            	Termination Without Cause	77
	
            	19.3	
            	Termination For Material Breach
    	78
	
            	19.4	
            	Termination for Insolvency	79
	
            	19.5	
            	Termination for Breach of Standstill or
      Lock-Up	79
	
            	19.6	
            	Termination of Discovery Agreement	80
	
            	19.7	
            	Effect of Termination	80
	
            	19.8	
            	Survival of Obligations	81

    

    vi 

     

    

    
    

    
      	ARTICLE XX MISCELLANEOUS	82
	          	20.1	     	Governing Law; Submission to Jurisdiction	82
	
            	20.2	
            	Waiver	82
	
            	20.3	
            	Notices	82
	
            	20.4	
            	Entire Agreement	82
	
            	20.5	
            	Amendments	82
	
            	20.6	
            	Interpretation	82
	
            	20.7	
            	Severability	83
	 	20.8	
            	Registration and Filing of the
      Agreement	83
	
            	20.9	
            	Assignment	83
	
            	20.10	
            	Successors and Assigns	83
	
            	20.11	
            	Affiliates	83
	
            	20.12	 	Counterparts	84
	
            	20.13	
            	Third-Party Beneficiaries	84
	
            	20.14	
            	Relationship of the Parties	84
	
            	20.15	
            	Limitation of Damages	84
	
            	20.16	
            	Non-Solicitation	84
	
            	20.17	
            	No Strict Construction	84

    

    vii 

     

    

    
    

    AMENDED AND
RESTATED
LICENSE AND
COLLABORATION AGREEMENT 

     

         THIS AMENDED AND RESTATED LICENSE
AND COLLABORATION AGREEMENT (this
"Agreement"), dated as of November 10, 2009 (the
"Effective Date"), is by and between AVENTIS PHARMACEUTICALS
INC., a corporation organized under the laws of the state of Delaware having a
principal place of business at 55 Corporate Drive, Bridgewater, New Jersey 08807
("Sanofi"), an indirect wholly owned subsidiary of
sanofi-aventis, a company organized under the laws of France with its principal
headquarters at 174, avenue de France, 75013 Paris, France ("Sanofi Parent"), SANOFI-AVENTIS AMERIQUE DU NORD, a
partnership organized under the laws of France with its principal headquarters
at 174 avenue de France, 75013 Paris, France ("Sanofi Amerique"), and REGENERON PHARMACEUTICALS, INC., a
corporation organized under the laws of the state of New York having a principal
place of business at 777 Old Saw Mill River Road, Tarrytown, New York 10591
("Regeneron") (with each of Sanofi and Regeneron being
sometimes referred to herein individually as a "Party" and collectively as the "Parties", and with Sanofi Amerique being a party to
this Agreement for purposes of Sections 15.1, 15.2 and 20.11 only).

     

         WHEREAS, the Parties previously entered into a License and Collaboration
Agreement (the “Original Agreement”), dated as of November 28, 2007, whereby,
pursuant to the terms and conditions set forth therein, the Parties agreed to
collaborate on the Development, Manufacture and Commercialization of Licensed
Products in the Field in the Territory (each capitalized term not previously
defined being defined below); 

     

         WHEREAS, concurrently with the execution and delivery of the Original
Agreement, the Parties entered into a Discovery and Preclinical Development
Agreement (the "Original Discovery Agreement") whereby, upon the terms and conditions set
forth therein, Regeneron agreed to use its proprietary VelocImmune® technology and related
suite of technologies with the objective of discovering Product Candidates (as
defined below) which Sanofi may have elected, in accordance with the Discovery
Agreement, to advance into Development (as defined below) and thereupon
automatically obtain from Regeneron a license of certain rights thereto upon the
terms and conditions set forth herein;

     

         WHEREAS, concurrently with the execution and delivery of this Agreement,
the Parties have entered into an agreement amending and restating the Original
Discovery Agreement (such amended and restated agreement, the “Discovery
Agreement”);

     

         WHEREAS, Sanofi and its Affiliates possess knowledge and expertise in,
and resources for, developing and commercializing pharmaceutical products in the
Field in the Territory (each as defined below);

     

         WHEREAS, Regeneron and Sanofi desire to continue to collaborate on the
Development, Manufacture and Commercialization of Licensed Products (each as
defined below) in the Field in the Territory (each as defined below) upon the
terms and conditions set forth herein (the "Collaboration");

     

    

    
    

         WHEREAS, Regeneron and Sanofi now desire to amend the Original Agreement
in accordance with Section 20.5 of the Original Agreement as set forth in this
Agreement.

     

         NOW, THEREFORE, in consideration of the following mutual covenants
contained herein, and for other good and valuable consideration the adequacy and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

     

    ARTICLE I 
DEFINITIONS 

     

         Capitalized terms used in this Agreement, whether used in the singular or
plural, except as expressly set forth herein, shall have the meanings set forth
below: 

     

              1.1 "Additional Major Market
Country" shall mean any
country in the Territory, other
than the Major Market Countries referred to in clause (i) of the definition
thereof, in which Net Sales in the immediately preceding Contract Year were
******** or more of aggregate Net Sales in the Territory, and such designation
shall remain effective from and after the determination of such Net Sales
amount; provided, however, that a country shall not be deemed an Additional
Major Market Country if, at the time that Net Sales in such country in a given
Contract Year first exceed ******** of aggregate Net Sales in the Territory, the
Parties mutually agree otherwise. 

     

              1.2 "Affiliate" shall mean, with respect to any Person,
another Person which controls, is controlled by or is under common control with
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. Without limiting the generality of
the foregoing, a Person shall be deemed to control another Person if any of the
following conditions is met: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
of the United States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in such case
such lower percentage shall be substituted in the preceding sentence, provided
that such foreign investor has the power to direct the management and policies
of such entity. For purposes of this Agreement, in no event shall Sanofi or any
of its Affiliates be deemed Affiliates of Regeneron or any of its Affiliates.
For purposes of this Agreement, neither Sanofi Pasteur nor Merial Limited, nor
any of their respective subsidiaries or joint ventures, shall be deemed to be
Affiliates of Sanofi or any of its Affiliates.

     

              1.3 "Ancillary Agreements" means the Sanofi Stock Purchase Agreement
and the Investor Agreement. 

     

              1.4 “Antibody” shall have the meaning ascribed to such term
in the Discovery Agreement. 

     

    2 

     

    

    
    

              1.5 "Anticipated First Commercial
Sale" shall mean, with
respect to a Licensed Product in the Field, the date agreed upon by the JSC in
advance as the expected date of First Commercial Sale of such Licensed Product
in the Field in a country in the Territory. 

     

              1.6 "Approval" shall mean, with respect to each Licensed
Product, any approval (including Marketing Approvals and Pricing Approvals),
registration, license or authorization from any Regulatory Authority required
for the Development, Manufacture or Commercialization of such Licensed Product
in the Field in a regulatory jurisdiction anywhere in the world, and shall
include, without limitation, an approval, registration, license or authorization
granted in connection with any Registration Filing.

     

              1.7 "Aventis LLC" shall mean sanofi-aventis US LLC (successor
in interest under the Aventis Collaboration Agreement to Aventis Pharmaceuticals
Inc.).

     

              1.8 "Aventis Collaboration
Agreement" shall mean the
Collaboration Agreement, dated as of September 5, 2003, by and between Aventis
LLC and Regeneron, as amended by the First Amendment, dated as of December 31,
2004, the Second Amendment, dated as of January 7, 2005, the Third Amendment,
dated as of December 21, 2005, the Fourth Amendment, dated as of January 31,
2006, and Section 11.2 of the Sanofi Stock Purchase Agreement, as the same may
be further amended from time to time.

     

              1.9 "Aventis Stock Purchase
Agreement" shall mean the
Stock Purchase Agreement dated as of September 5, 2003 by and between Aventis
Pharmaceuticals Inc. and Regeneron, as amended by Sections 4.2(b) and 4.4 of the
Investor Agreement, and as may be further amended from time to time.

     

              1.10 "BLA" shall mean, with respect to each Licensed
Product, a biologics license application filed with respect to such Licensed
Product, as described in the FDA regulations, including all amendments and
supplements to the application, and any equivalent filing with any Regulatory
Authority. 

     

              1.11 "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York, New York, the United
States or Paris, France are authorized or required by Law to remain
closed.

     

              1.12 "Clinical Supply Cost" shall mean (a) the Out-of-Pocket Cost for
purchasing and/or the Manufacturing Cost to Manufacture Formulated Bulk Product
for Clinical Supply Requirements under the applicable Global Development Plan,
(b) the Out-of-Pocket Cost for purchasing and/or the Manufacturing Cost to
Manufacture, comparator agent or placebo requirements for activities
contemplated under the applicable Global Development Plan, (c) the Out-of-Pocket
Cost and/or the Manufacturing Cost for filling, packaging, labeling and delivery
of such Clinical Supply Requirements, comparator agent, combination agent and/or
placebo, as the case may be, for activities contemplated under the applicable
Global Development Plan and (d) any irrecoverable VAT or similar taxes actually
paid with respect to the Manufacture or delivery of Clinical Supply
Requirements. To the extent that manufacturing cost for comparator agent,
combination agent or placebo includes any markup over Manufacturing Cost to the
benefit of one of the Parties or its Affiliates, such markup shall be deducted
in the calculation of Clinical Supply Cost. 

     

    3 

     

    

    
    

              1.13 "Clinical Supply
Requirements" shall mean,
with respect to a Licensed Product, the quantities of such Licensed Product
which are required by a Party or the Parties for Development in the Field under
this Agreement, including, without limitation, the conduct of research,
pre-clinical studies and clinical trials in connection with a Development Plan
and quantities of such Licensed Product which are required by a Party for
submission to a Regulatory Authority in connection with any Registration Filing
or Approval in the Field in any regulatory jurisdiction in the Territory.

     

              1.14 "Co-Commercialize" or "Co-Commercialization" shall mean the act of Co-Promoting in a
Co-Commercialization Country. 

     

              1.15 "Co-Commercialization
Country" shall mean each
country in which Regeneron has elected to Co-Promote a Licensed Product, so long
as, after commencing such Co-Promotion, Regeneron is Co-Promoting at least one
Licensed Product in such country. 

     

              1.16 "COGS" for a Licensed Product for a Quarter shall
mean cost (calculated in accordance with IAS/IFRS) of Manufacturing the Licensed
Product sold in the Field in the Territory in the Quarter.

     

              1.17 "Commercial Overhead Charge" shall mean, on a country-by-country and
Licensed Product-by-Licensed Product basis in the Territory, beginning in the
Contract Year of First Commercial Sale in the applicable country, an amount
(agreed upon by the JFC at least six (6) months prior to the Anticipated First
Commercial Sale in the country) to cover Sanofi's or Regeneron's, if applicable,
internal costs of ***************************** and other administrative costs
to the extent attributable to the Commercialization of the applicable Licensed
Product in the Field in such country, such amount to be determined by the JFC as
of January 1 of each following Contract Year. For the avoidance of doubt,
"Commercial Overhead Charge" shall not include any amounts included in
Medical Post-Approval Cost, Sales Force Cost, Other Shared Expenses or Shared
Commercial Expenses. 

     

              1.18 "Commercial Supply Cost" shall mean the Out-of-Pocket Cost for
purchasing and/or the Manufacturing Cost for the Manufacture of Commercial
Supply Requirements, including, without limitation, scale-up after First
Commercial Sale, any filling, packaging and labeling costs, and any
irrecoverable VAT or similar taxes actually paid with respect to the Manufacture
or delivery of such Commercial Supply Requirements.

     

              1.19 "Commercial Supply
Requirements" shall mean,
with respect to each Licensed Product, quantities of Finished Product as are
required to fulfill requirements for commercial sales, Non-Approval Trials and
product sampling with respect to such Licensed Product in the Field in the
Territory. 

     

              1.20 "Commercialize" or "Commercialization" shall mean, with respect to a Licensed
Product, any and all activities directed to marketing, promoting (including, if
applicable, Co-Promoting), detailing, distributing, importing, offering for
sale, having sold and/or selling such Licensed Product in the Field in the
Territory, including, without limitation, market research, obtaining Pricing
Approvals, pre-launch marketing, *********************** marketing and
educational activities, post-Approval pharmacovigilance excluding
pharmacovigilance for clinical trials other than Non-Approval Trials, sampling
and Non-Approval Trials in the Territory. 

     

    4 

     

    

    
    

              1.21 "Commercially Reasonable
Efforts" shall mean the
carrying out of obligations or tasks by a Party in a sustained manner using good
faith commercially reasonable and diligent efforts, which efforts shall be
consistent with the exercise of prudent scientific and business judgment in
accordance with the efforts such Party devotes to products or research or
development projects owned by it of similar scientific and commercial potential.
Commercially Reasonable Efforts shall be determined on a market-by-market and
Licensed Product-by-Licensed Product basis in view of conditions prevailing at
the time, and evaluated taking into account all relevant factors, including
without limitation, the efficacy, safety, anticipated regulatory authority
approved labeling, competitiveness of the Licensed Product or alternative
products that are in the marketplace or under development by Third Parties and
other technical, scientific, legal, medical marketing and competitiveness
factors. It is anticipated that the level of effort constituting Commercially
Reasonable Efforts may change over time. In determining whether a Party has used
Commercially Reasonable Efforts, neither the profit sharing nor other payments
made or required to be made hereunder shall be factor weighed (that is, a Party
may not apply lesser resources or efforts in support of a Licensed Product
because it must share profits from sales of such Licensed Product or make any
other payments hereunder).

     

              1.22 "Committee" means any of the JSC, JDC, JCC, JMC, JFC,
any CRCC, and any other committee established by the Parties or by the
Committees referenced above, each as described in Article III (together with
Working Groups or other committees contemplated herein or established in
accordance with this Agreement). 

     

              1.23 "Competing Opt-Out Product" shall mean any Opt-Out Product having the
same Target as a Licensed Product. 

     

              1.24 "Competing Product" shall mean, with respect to a Licensed
Product, *******************************.

     

              1.25 "Confidentiality Agreements" shall mean the confidentiality agreements
between Regeneron and Sanofi Parent dated February 1, 2007 and October 23, 2007,
respectively. 

     

              1.26 "Consolidated Payment Report" shall mean a consolidated Quarterly report
prepared by Sanofi (based on information reported under Sections 5.4 and 9.5)
setting forth in reasonable detail, for each Major Market Country in the
Territory, for each Region in the Territory, and in the aggregate for all
countries in the Territory, (a) Net Sales, COGS and Shared Commercial Expenses
incurred by each Party for such Quarter, (b) Development Costs incurred by each
Party for such Quarter, (c) Other Shared Expenses incurred by each Party for
such Quarter, and (d) the Quarterly True-Up, and the component items and
calculations in determining such Quarterly True-Up, calculated in accordance
with Schedule 2. 

     

              1.27 "Contract Sales Force" shall mean sales representatives employed by
a Third Party.

     

              1.28 "Contract Year" shall mean the period beginning on the
Original Effective Date and ending on December 31, 2008, and each succeeding
consecutive twelve (12) month period thereafter during the Term. The last
Contract Year of the Term shall begin on January 1 for the year during which
termination or expiration of the Agreement will occur, and the last day of such
Contract Year shall be the effective date of such termination or
expiration. 

     

    5 

     

    

    
    

              1.29 "Controlling Party" shall mean
**********************.

     

              1.30 "Co-Promote" or "Co-Promotion" shall mean the joint marketing and promotion
of Licensed Product(s) by the Parties (or their respective Affiliates) under the
same trademark in a Major Market Country pursuant to the applicable
Country/Region Commercialization Plan.

     

              1.31 "Country/Region Commercialization
Budget" shall mean the
budget for a particular calendar year approved by the JCC for the applicable
Country/Region Commercialization Plan.

     

              1.32 "Country/Region Commercialization
Plan" shall mean, for each
Reporting Country/Region, the three (3) year rolling plan for Commercializing
Licensed Products in the Field in such country or Region and the related
Country/Region Commercialization Budget and a non-binding budget forecast for
the next two (2) calendar years, approved by the JCC, as the same may be amended
from time-to-time in accordance with the terms of this Agreement. Each
Country/Region Commercialization Plan shall set forth, for each Licensed
Product, the information, plans and forecasts set forth in Section 6.3.

     

              1.33 "Country/Region Commercialization
Committee", or
"CRCC", shall mean the committee established by the
JCC for a particular Reporting Country/Region as described in Section 3.5.

     

              1.34 "Detail" shall mean, with respect to each Licensed
Product in the Field, a selling presentation for such product by a
representative of each Party's sales force, or another employee of each Party
who may be deemed to be part of the Commercialization effort for such Licensed
Product (e.g., such as a key account manager, etc.).

     

              1.35 "Develop" or "Development" shall mean, with respect to a Licensed
Product, the following activities undertaken or performed after the Initial IND
Filing Date for such Licensed Product: (a) activities relating to research,
pre-clinical and clinical drug development of such Licensed Product in the
Field, including, without limitation, test method development and stability
testing, assay development, toxicology, pharmacology, formulation, quality
assurance/quality control development, technology transfer, statistical
analysis, process development and scale-up, pharmacokinetic studies, data
collection and management, clinical studies (including research to design
clinical studies), regulatory affairs, project management, drug safety
surveillance activities related to clinical studies, the preparation and
submission of Registration Filings but excluding activities necessary to obtain
a Pricing Approval, reimbursement and/or listing on health care providers' and
payers' formularies, (b)***********************************************, and (c)
any other research and development activities with respect to such Licensed
Product in the Field, including, without limitation, activities to support the
discovery of biomarkers and activities to support new product formulations,
delivery technologies and/or new indications in the Field, either before or
after the First Commercial Sale.

     

    6 

     

    

    
    

              1.36 "Development Costs" shall mean costs incurred by a Party (for
each Licensed Product, commencing with the first (1st) day of the month in which
the Opt-In Notice (as such term is defined in the Discovery Agreement) for such
Licensed Product is received by Regeneron directly in connection with the
Development of Licensed Products in the Field in accordance with this Agreement
and the applicable Global Development Plan, including without limitation:

     

              (a) all Out-of-Pocket Costs, including, without limitation, fees and expenses
associated with obtaining Registration Filings and Marketing Approvals necessary
for the Development and Commercialization of the Licensed Products in the Field
under this Agreement; 

     

              (b) Development FTE Costs; 

     

              (c) Clinical Supply Costs; 

     

              (d) the costs and expenses incurred in connection with (i) Manufacturing process, formulation, cleaning,
and shipping development and validation (other than validation batches which are
sold), (ii), Manufacturing scale-up and improvements, (iii) stability testing,
(iv) quality assurance/quality control development (including management of
Third Party fillers, packagers and labelers), and (v) internal and Third Party
costs and expenses incurred in connection with (A) qualification and validation
of Third Party contract manufacturers and vendors and (B) subject to the terms
of this Agreement, establishing a primary or secondary source supplier,
including, without limitation, the transfer of process and Manufacturing
technology and analytical methods, scale-up up to First Commercial Sale, process
and equipment validation, cleaning validation and initial Manufacturing
licenses, approvals and Regulatory Authority inspections (in each case, to the
extent not included in Clinical Supply Costs or Commercial Supply Costs);

     

              (e) any license fees and other payments under Licenses to the extent
attributable to the Manufacture of Clinical Supply Requirements and/or the
Development of Licensed Products in the Field under the Plans for the Territory
subject to Sections 13.3(d) and 13.3(e) in this Agreement; and 

     

              (f) any other costs or expenses specifically identified and included in the
applicable Development Plan or included as Development Costs under this
Agreement. 

     

              1.37 "Development FTE Cost" shall mean, for all Development activities
performed in accordance with the Development Plan(s), including regulatory
activities, the product of (a) the number of FTEs required for such Development
activity as set forth in the approved Development Plan and (b) the Development
FTE Rate. For the avoidance of doubt, the activity of contract personnel shall
be charged as Out-of-Pocket Costs.

     

    7 

     

    

    
    

              1.38 "Development FTE Rate" shall mean ********** in the Contract Year
ending December 31, 2009 and ********** in the Contract Year ending December 31,
2010, such amount to be adjusted as of January 1, 2011 and annually thereafter
by the sum of (a) the average of the percentage increases or decreases, if any,
in the US CPI and the ROW CPI for the twelve (12) months ending June 30 of the
Contract Year prior to the Contract Year for which the adjustment is being made,
**********************************, the Parties shall meet to consider a
revision to the Development FTE Rate. 

     

              1.39 "Development Plan" shall mean a Global Development Plan or an
Initial Development Plan, as the context requires. 

     

              1.40 "Discovery Program" shall have the meaning set forth in the
Discovery Agreement. 

     

              1.41 "EMEA" shall mean the European Medicines Evaluation
Agency or any successor agency thereto. 

     

              1.42 "Executive Officers" shall mean the Chief Executive Officer of
Regeneron and the Chief Executive Officer of Sanofi Parent, or their respective
designees with equivalent decision-making authority with respect to matters
under this Agreement. 

     

              1.43 "FDA" shall mean the United States Food and Drug
Administration and any successor agency thereto. 

     

              1.44 "Field" shall mean the treatment, prevention,
palliation and/or diagnosis of any disease.

     

              1.45 "Finished Product" shall mean a Licensed Product in the Field
in its finished, labeled and packaged form, ready for sale to the market or use
in clinical or pre-clinical trials, as the case may be. 

     

              1.46 "First Commercial Sale" shall mean, with respect to a Licensed
Product in a country in the Territory, the first commercial sale of the Finished
Product to non-Sublicensee Third Parties for use in the Field in such country
(or group of countries) following receipt of Marketing Approval. Sales for test
marketing or clinical trial purposes or compassionate or similar use shall not
constitute a First Commercial Sale. 

     

              1.47 "Formulated Bulk Product" shall mean Licensed Product in the Field
formulated into solution or in a lyophilized form, ready for storage or shipment
to a manufacturing facility, to allow processing into the final dosage form.

     

              1.48 "FTE" shall mean a full time equivalent employee
(i.e., one fully-committed or multiple
partially-committed employees aggregating to one full-time employee) employed or
contracted by a Party and assigned to perform specified work, with such
commitment of time and effort to constitute one employee performing such work on
a full-time basis, which for purposes of Development shall be ******** per
year.

     

              1.49 "GAAP" shall mean generally accepted accounting
principles as applicable in the United States.

     

    8 

     

    

    
    

              1.50 "Global Commercialization
Budget" shall mean the
budget(s) for a particular Contract Year approved by the JCC for the applicable
Global Commercialization Plan. 

     

              1.51 "Global Commercialization
Plan" shall mean, with
respect to a Licensed Product, the three (3) year rolling plan approved by the
JSC for Commercializing such Licensed Product throughout the world, including
the related Global Commercialization Budget and a non-binding budget forecast
for the next two (2) Contract Years, as the same may be amended from
time-to-time in accordance with the terms of this Agreement. Each Global
Commercialization Plan shall set
forth (if not otherwise set forth in the applicable Country/Region Commercialization Plan(s)) for
a Licensed Product, the information, plans and forecasts set forth in Section
6.2. 

     

              1.52 "Global Development Budget" shall mean the budget(s) for a particular
Contract Year approved by the JSC for the applicable Global Development Plan.

     

              1.53 "Global Development Plan" shall mean, with respect to a Licensed
Product, the Initial Development Plan and the three (3) year rolling plan
approved by the JSC for the worldwide Development of such Licensed Product,
including the related Global Development Budget and a non-binding budget
forecast for the next two (2) Contract Years, as the same may be amended from
time-to-time in accordance with the terms of this Agreement. For the avoidance
of doubt, a Global Development Plan will not include Non-Approval
Trials.

     

              1.54 "Good Practices" shall mean compliance with the applicable
standards contained in then-current "Good Laboratory Practices," "Good
Manufacturing Practices" and/or "Good Clinical Practices," as promulgated by the
FDA and all analogous guidelines promulgated by the EMEA or the ICH, as
applicable. 

     

              1.55 "Governmental Authority" shall mean any court, agency, authority,
department, regulatory body or other instrumentality of any government or
country or of any national, federal, state, provincial, regional, county, city
or other political subdivision of any such government or any supranational
organization of which any such country is a member. 

     

              1.56 "IAS/IFRS" shall mean International Accounting
Standards/International Financial Reporting Standards of the International
Accounting Standards Board. 

     

              1.57 "ICH" shall mean the International Conference on
Harmonization of Technical Requirements for Registration of Pharmaceuticals for
Human Use. 

     

              1.58 "IND" shall mean, with respect to each Licensed
Product in the Field, an Investigational New Drug Application filed with respect
to such Licensed Product, as described in the FDA regulations, including all
amendments and supplements to the application, and any equivalent filing with
any Regulatory Authority outside the United States.

     

              1.59 "Indication" means any disease.

     

              1.60 "Initial Development Plan" shall have the meaning set forth in the
Discovery Agreement. 

     

    9 

     

    

    
    

              1.61 "Initial IND Filing Date" means, with respect to a Licensed Product,
the date an IND for such Licensed Product is first filed.

     

              1.62 "Investor Agreement" means the Investor Agreement, dated as of
December 20, 2007, by and among Sanofi Parent, Sanofi, Aventis LLC, Sanofi
Amerique and Regeneron, as amended as of the Effective Date, and as the same may
be amended from time to time.

     

              1.63 "Joint Patent Rights" shall mean Patent Rights that cover a Joint
Invention.

     

              1.64 "Know-How" shall mean, with respect to each Party and
its Affiliates, any and all proprietary technical or scientific information,
know-how, data, test results, knowledge, techniques, discoveries, inventions,
specifications, designs, trade secrets, regulatory filings and other
information, including marketing and supply information, (whether or not
patentable or otherwise protected by trade secret Law) and that are not
disclosed or claimed by such Party's Patents or Patent
Applications.

     

              1.65 "Law" or "Laws" shall mean all laws, statutes, rules,
regulations, orders, judgments, injunctions and/or ordinances of any
Governmental Authority. 

     

              1.66 "Lead Regulatory Party" shall mean the Party having responsibility
for preparing, prosecuting and maintaining Registration Filings and any
Approvals for Licensed Products in the Field under this Agreement, and for
related regulatory duties. 

     

              1.67 "Legal Dispute" shall mean any dispute related to a Party's
alleged failure to comply with this Agreement or the validity, breach,
termination or interpretation of this Agreement.

     

              1.68 "License" shall mean any license or other agreement to
acquire rights from a Third Party, which license or other agreement has been
approved by the JSC required for the Development, Manufacture or
Commercialization of any Licensed Product in the Field under this
Agreement.

     

              1.69 "Licensed Products" shall mean (i) Product Candidates as to
which Sanofi has exercised its Opt-In Rights in accordance with Section 5.4 of
the Discovery Agreement, (ii) any Competing Product that is included in the
Collaboration pursuant to Section 2.6(c) below, (iii) REGN88 (IL-6RmAB) and
Delta-like ligand-4(D-ll4) and (iv) ************* (as defined in the Discovery
Agreement) once included in the Collaboration pursuant to Section 2.11(b) of the
Discovery Agreement.

     

              1.70 "Major Market Country" shall mean any of the following:
********************************. 

     

              1.71 "Manufacture" or "Manufacturing" shall mean activities directed to producing,
manufacturing, processing, filling, finishing, packaging, labeling, quality
assurance testing and release, shipping and/or storage of Formulated Bulk
Product, Finished Product, placebo or a comparator agent, as the case may be.

     

    10 

     

    

    
    

              1.72 "Marketing Approval" shall mean an approval of the applicable
Regulatory Authority necessary
for the marketing and sale of a Licensed Product in an indication in the Field
in any country, but excluding any separate Pricing Approval. 

     

              1.73 "Manufacturing Plan" shall mean the manufacturing plan as
prepared by the JMC as described in Section 8.5.

     

              1.74 "Medical Post-Approval Cost" shall mean, for Licensed Product(s) in each
country in the Territory, the product of (a) the number of office-based people
supporting (i) the coordination of Non-Approval Trials, (ii) post-Approval
non-clinical pharmacovigilance, (iii) the maintenance of Approvals, and (iv)
Pricing Approvals (with the number and the method of calculating such number set
forth in the applicable Country/Region Commercialization Plan or Global
Commercialization Plan) and (b) the applicable Medical Post-Approval FTE Rate.
The calculation of the number of people in (a) above will be designed to ensure
the proper reporting and auditing of such information in accordance with this
Agreement. For the avoidance of doubt, the activities of contract personnel
shall be charged as an Out-of-Pocket Cost. 

     

              1.75 "Medical Post-Approval FTE
Rate" shall mean, on a
Region-by-Region or one or more Major Market Countries basis in the Territory
(determined based on the location of the medical affairs professional), a rate
agreed upon in local currency by the Parties prior to the expected start of the
first Non-Approval Trial in such Region or Major Market Country, as applicable,
based upon the fully burdened cost of medical affairs professionals of
pharmaceutical companies in the Field in the applicable country, such amount to
be adjusted as of January 1 of each following Contract Year by the percentage
increase or decrease, if any, in the applicable CPI through June 30 of the prior
calendar year. The Medical Post-Approval FTE Rate shall be inclusive of
Out-of-Pocket Costs and other expenses for the employee providing the services,
including travel costs and allocated costs, such as, for example, allocated
overhead costs.

     

              1.76 "Net Sales" shall mean the gross amount invoiced for
bona fide arms' length sales of Licensed Products in the Field in the Territory
by or on behalf of a Party or its Affiliates or Sublicensees to Third Parties,
less the following deductions, determined in accordance with IAS/IFRS (or GAAP
for the US) consistently applied:

     

              (a) normal and customary
trade, cash, quantity and free-goods allowances granted and taken directly with
respect to sales of such Licensed Products; 

     

              (b) amounts repaid or
credited by reason of defects, rejections, recalls, returns, rebates, allowances
and billing errors; 

     

              (c) chargebacks and other
amounts paid on sale or dispensing of Licensed Products; 

     

              (d) Third Party cash rebates
and chargebacks related to sales of Licensed Products, to the extent allowed;

     

              (e) retroactive price reductions that are actually allowed or granted;

     

    11 

     

    

    
    

              (f) compulsory refunds, credits and rebates directly related to the sale of
Licensed Products, accrued, paid or deducted pursuant to agreements (including,
but not limited to, managed care agreements) or government regulations;

     

              (g) freight, postage, shipment and costs (or wholesale fees in lieu of those
costs) and customs duties incurred in delivering Licensed Products that are
separately identified on the invoice or other documentation; 

     

              (h) sales taxes, excess duties, or other consumption taxes and compulsory
payments to Governmental Authorities or other governmental charges imposed on
the sale of Licensed Products, which are separately identified on the invoice or
other documentation; and 

     

              (i) as agreed by the Parties, any other specifically identifiable costs or
charges included in the gross invoiced sales price of such Licensed Product
falling within categories substantially equivalent to those listed above and
ultimately credited to customers or a Governmental Authority or agency
thereof.

     

    Net Sales in currency
other than United States Dollars shall be translated into United States Dollars
according to the provisions of Section 9.8 of this Agreement. Sales between the
Parties, or between the Parties and their Affiliates or Sublicensees, for
resale, shall be disregarded for purposes of calculating Net Sales. Any of the
items set forth above that would otherwise be deducted from the invoice price in
the calculation of Net Sales but which are separately charged to, and paid by,
Third Parties shall not be deducted from the invoice price in the calculation of
Net Sales. In the case of any sale of a Licensed Product for consideration other
than cash, such as barter or countertrade, Net Sales shall be calculated on the
fair market value of the consideration received as agreed by the Parties. Solely
for purposes of calculating Net Sales, if Sanofi or its Affiliate or Sublicensee
sells such Licensed Products in the form of a combination product containing any
Licensed Product and one or more active ingredients (whether combined in a
single formulation or package, as applicable, or formulated or packaged
separately but sold together for a single price in a manner consistent with the
terms of this Agreement) (a "Combination Product"), then prior to the First Commercial Sale of
such Combination Product, the Parties shall agree through the JFC to the value
of each component of such Combination Product and the appropriate method for
accounting for sale of such Combination Product. For the avoidance of doubt, for
the purposes of this Agreement, Immunoconjugates (as such term is defined in the
Discovery Agreement) shall not be deemed Combination Products. 

     

         Solely for the purposes of Section 2.6(d) of this Agreement, the term
"Licensed Product" as used in the definition of Net Sales shall refer to Opt-Out
Products.

     

              1.77 "New Information" shall mean any and all ideas, inventions,
data, writings, protocols, discoveries, improvements, trade secrets, materials
or other proprietary information not generally known to the public, which may
arise or be conceived or developed by either Party or its Affiliates, or by the
Parties or their Affiliates jointly, during the Term pursuant to this Agreement,
to the extent specifically related to any Licensed Product in the Field,
including, without limitation, information and data included in any Plans or
Registration Filings made under this Agreement. 

     

    12 

     

    

    
    

              1.78 "Non-Approval Trials" shall mean any post-marketing surveys,
registries and clinical trials post-first Marketing Approval not intended to
gain additional labeled Indications, but excluding any post-first Marketing
Approval clinical trials required by Regulatory Authorities to maintain
Marketing Approvals of existing labeled Indication(s). 

     

              1.79 "Opt-In Right"shall have the meaning set forth in the
Discovery Agreement. 

     

              1.80 "Opt-Out Product" shall mean a Licensed Product as to which
this Agreement has been terminated in accordance with Section 19.2. For clarity,
an Early Development Opt-Out Product shall not constitute an Opt-Out Product.

     

              1.81 “Original Effective Date” shall mean November 28, 2007. 

     

              1.82 "Other Shared Expenses" shall mean those costs and expenses
specifically referred to in Sections 7.6, 12.1(a), 12.2(e), 12.3(b), 13.1(c),
13.3(b), 13.3(d), 17.1(c), and 17.1(d).

     

              1.83 "Out-of-Pocket Costs" shall mean costs and expenses paid to Third
Parties (or payable to Third Parties and accrued in accordance with GAAP or
IAS/IFRS) by either Party and/or its Affiliates in accordance with a Plan, if
applicable. 

     

              1.84 "Party Information" shall mean any and all trade secrets or
other proprietary information, including, without limitation, any proprietary
data, inventions, ideas, discoveries and materials (whether or not patentable or
protectable as a trade secret) not generally known to the public regarding a
Party's or its Affiliates' technology, products, business or objectives, in each
case, other than New Information, which are disclosed or made available by a
Party or such Party's Affiliates to the other Party or the other Party's
Affiliates in connection with this Agreement.

     

              1.85 "Patent Application" shall mean any application for a Patent.

     

              1.86 "Patent Rights" shall mean unexpired Patents and Patent
Applications. 

     

              1.87 "Patents" shall mean patents and all substitutions,
divisions, continuations, continuations-in-part, reissues, reexaminations and
extensions thereof and supplemental protection certificates relating thereto,
and all counterparts thereof in any country in the world. 

     

              1.88 "Person" shall mean and include an individual,
partnership, joint venture, limited liability company, corporation, firm, trust,
unincorporated organization and government or other department or agency
thereof. 

     

              1.89 "Phase 3 Trial" shall mean a clinical trial that is designed
to gather further evidence of safety and efficacy of a Licensed Product in the
Field (and to help evaluate its overall risks and benefits) and is intended to
support Marketing Approval for a Licensed Product in the Field in one or more
countries in the Territory. A Phase 3 Trial typically follows at least one dose
ranging clinical trial to evaluate further the efficacy and safety of a Licensed
Product in the Field in the targeted patient population and to help define the
optimal dose and/or dosing regimen.

     

    13 

     

    

    
    

              1.90 "Plan" shall mean any Country/Region
Commercialization Plan, Global Commercialization Plan, Global Development Plan,
Initial Development Plan, Manufacturing Plan or other plan approved through the
Committee process relating to the Development, Manufacture or Commercialization
of any Licensed Product in the Field under this Agreement. 

     

              1.91 "Positive Phase 3 Trial
Results" shall mean a
Phase 3 Trial that meets its primary end-point as defined in the study protocol
for such Phase 3 Trial, and the safety profile supports continued clinical
testing in the applicable Indication and/or filing of an application for
Marketing Approval.

     

              1.92 "Pre-Launch Marketing
Expenses" shall mean, with
respect to a Licensed Product, on a country-by-country basis in the Territory,
with respect to each Licensed Product, all Commercialization expenses to support
such Licensed Product in the Field incurred beginning on the date which is the
later of the date of *****************************************. 

     

              1.93 "Pricing Approval" shall mean such approval, agreement,
determination or governmental decision establishing prices for a Licensed
Product that can be charged to consumers and will be reimbursed by Governmental
Authorities in countries in the Territory where Governmental Authorities or
Regulatory Authorities of such country approve or determine pricing for
pharmaceutical products for reimbursement or otherwise. 

     

              1.94 "Product Candidate" shall have the meaning set forth in the
Discovery Agreement. 

     

              1.95 "Product Trademark" shall mean, with respect to each Licensed
Product in the Field in the Territory, the trademark(s) selected by the JCC and
approved by the JSC for use on such Licensed Product throughout the Territory
and/or accompanying logos, slogans, trade names, trade dress and/or other
indicia of origin, in each case as selected by the JCC and approved by the
JSC. 

     

              1.96 "Promotional Materials" shall mean, with respect to each Licensed
Product, promotional, advertising, communication and educational materials
relating to such Licensed Product for use in connection with the marketing,
promotion and sale of such Licensed Product in the Field in the Territory, and
the content thereof, and shall include, without limitation, promotional
literature, product support materials and promotional giveaways. 

     

              1.97 "Quarter" or "Quarterly" shall refer to a calendar quarter, except
that the first (1st) Quarter shall commence on the Effective Date and extend to
the end of the then-current calendar quarter and the last calendar quarter shall
extend from the first day of such calendar quarter until the effective date of
the termination or expiration of the Agreement. 

     

              1.98 "Regeneron Intellectual
Property" shall mean the
Regeneron Patent Rights and any Know-How of Regeneron or any of its Affiliates.

     

    14 

     

    

    
    

              1.99 "Regeneron Know-How" shall mean any and all Know-How now or
hereafter during the term of the Discovery Program or the Collaboration owned
by, licensed to or otherwise held by Regeneron or any of its Affiliates (other
than Sanofi Know-How and Know-How included in Joint Inventions) with the right
to sublicense the same that relate to a Licensed Product in the Field and are
necessary or useful for the Development, Manufacture or Commercialization of a
Licensed Product in the Field, including, without limitation, New Information.

     

              1.100 "Regeneron Patent Rights" shall mean those Patent Rights which, (a) at
the Effective Date or at any time thereafter during the Term, are owned by,
licensed to or otherwise held by Regeneron or any of its Affiliates (other than
Sanofi Patent Rights and Patent Rights included in Joint Inventions), with the
right to license or sublicense the same, and (b) include at least one Valid
Claim which would be infringed by the Development, Manufacture or
Commercialization of a Licensed Product in the Field, but only to such extent.

     

              1.101 "Region" shall mean such countries or group of
countries as determined by the JCC. 

     

              1.102 "Registration Filing" shall mean the submission to the relevant
Regulatory Authority of an appropriate application seeking any Approval, and
shall include, without limitation, any IND or Marketing Approval application in
the Field. 

     

              1.103 "Regulatory Authority" shall mean any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity anywhere in the world with authority over the
Development, Manufacture or Commercialization of any Licensed Product in the
Field under this Agreement. The term "Regulatory Authority" includes, without
limitation, the FDA, the EMEA and the Japanese Ministry of Health, Labour and
Welfare. 

     

              1.104 "Reporting Country/Region" shall mean each Major Market Country, and
each other country or Region for which a Country/Region Commercialization
Committee has been established by the JCC. 

     

              1.105 "Rest of World" or "ROW" shall mean all Rest of World Countries.

     

              1.106 "Rest of World Country" shall mean any country in the Territory
other than the United States. 

     

              1.107 "ROW CPI" shall mean the "EU15 CPI" (or its successor
equivalent index), which is published monthly and available via The Bloomberg Professional, as published by Bloomberg L.P. 

     

              1.108 "Sales Force Cost" shall
mean, for Licensed Product(s) in each country in the Territory, the product of
(a) the number of detailing people (with the number and the method of
calculating such number set forth in the applicable Country/Region
Commercialization Plan or Global Commercialization Plan), and
(b)************************ provided, however, that with respect to Regeneron's
detailing FTEs who are Co-Promoting a Licensed Product in a Co-Commercialization
Country in which, in accordance with Section 6.5(a), Regeneron first started
Co-Promoting such Licensed Product on or after ************************ the
foregoing ************** shall instead be ************* for a period of
**************************************. The calculation of the number of
detailing people in (a) above will be based on
************************************** and shall allow for the reporting and
auditing of such information in accordance with this Agreement, all as set forth
in the applicable Country/Region Commercialization Plan or Global
Commercialization Plan. For the avoidance of doubt, the activities of contract
personnel, including contract Sales Force, shall be charged as Out-of-Pocket
Costs.

     

    15 

     

    

    
    

              1.109 "Sales Force FTE Rate" shall mean, on a Region-by-Region or one or
more Major Market Countries basis (determined based on the location of the sales
representative), a rate agreed upon in local currency by the Parties at least
eighteen (18) months prior to the Anticipated First Commercial Sale in the
Region or Major Market Country, as applicable, based upon the fully burdened
cost of sales representatives of pharmaceutical companies in the Field in the
applicable country, and including an allocation of regional and country sales
force management cost, to be approved six (6) months prior to the first
Commercial Sale, such amount to be adjusted as of January 1 of each following
Contract Year by the percentage increase or decrease, if any, in the applicable
CPI through June 30 of the prior calendar year. The Sales Force FTE Rate shall
be inclusive of Out-of-Pocket Costs and other expenses for the employee
providing the services, including travel costs, information systems and
allocated costs, such as, for example, allocated overhead costs.

     

              1.110 "Sanofi Intellectual
Property" shall mean the
Sanofi Patent Rights and the Sanofi Know-How. 

     

              1.111 "Sanofi Know-How" shall mean any and all Know-How now or
hereafter during the term of the Discovery Program or the
Collaboration owned by, licensed to or otherwise held by
Sanofi or its Affiliates (other than Regeneron Know-How and Know-How included in
Joint Inventions) with the right to sublicense the same that
relate to a Licensed Product in the Field and are necessary or useful for the
Development, Manufacture or Commercialization of a Licensed Product in the
Field, including, without limitation, New Information. 

     

              1.112 "Sanofi Patent Rights" shall mean those Patent Rights which, (a) at
the Effective Date or at any time thereafter during the Term, are owned by,
licensed to or otherwise held by Sanofi or any of its Affiliates (other than
Regeneron Patent Rights and Patent Rights included in Joint Inventions), with
the right to license or sublicense the same, and (b) include at least one Valid
Claim which would be infringed by the Development, Manufacture or
Commercialization of a Licensed Product in the Field, but only to such
extent.

     

              1.113 "Sanofi Stock Purchase
Agreement" means the Stock
Purchase Agreement dated as of the Effective Date by and between Sanofi
Amerique, Aventis LLC and Regeneron. 

     

              1.114 "Shared Commercial Expenses" shall mean the sum of the following items,
in each case to the extent directly attributable to Commercialization of
Licensed Products in the Field in the Territory in accordance with an approved
Country/Region Commercialization Plan or Global Commercialization Plan:

     

              (a) ************************ to cover the cost of distribution, freight,
insurance and warehousing, related to the sale of Licensed Products in the Field
in the Territory, less any amount deducted from Net Sales pursuant to clause (g)
of the definition of Net Sales; 

     

    16 

     

    

    
    

              (b) bad debt attributable to Licensed Products in the Field sold in the
Territory; 

     

              (c) Sales Force Cost; 

     

              (d) Medical Post-Approval Cost; 

     

              (e) Out-of-Pocket Costs related to (i) the marketing, advertising and/or
promotion of Licensed Products in the Field in the Territory (including, without
limitation, pricing activities, commercial pharmacovigilance, educational
expenses, advocate development programs and symposia and Promotional Materials),
(ii) market research for Licensed Products in the Field in the Territory and
(iii) the preparation of training and communication materials for Licensed
Products in the Field in the Territory; 

     

              (f) a portion of Out-of-Pocket Costs agreed upon by the Parties related to
the marketing, advertising and promotion of Licensed Products in the Field in
the Territory (including, without limitation, educational expenses, advocate
development programs and symposia, and promotional materials) to the extent such
marketing, advertising and promotion relate to both Licensed Products and other
products developed or commercialized by Sanofi or its Affiliates as agreed upon
in an approved Global Commercialization Plan or Country/Region Commercialization
Plan;

     

              (g) Out-of-Pocket Costs related to Non-Approval Trials for Licensed Products
in the Field in the Territory, including, without limitation, the Out-of-Pocket
Cost of clinical research organizations, investigator and expert fees, lab fees
and scientific service fees, the Out-of-Pocket Cost of shipping clinical
supplies to centers or disposal of clinical supplies, in each case, to the
extent not included in Commercial Supply Cost; 

     

              (h) Out-of-Pocket Costs related to Pricing Approvals and the maintenance of
all Approvals directly related to the Commercialization of Licensed Products in
the Field in the Territory; 

     

              (i) Commercial Overhead Charge; 

     

              (j) Pre-Launch Marketing Expenses; 

     

              (k) Out-of-Pocket Costs related to regulatory affairs activities, other than
activities to secure Registration Filing of indications and line extensions; and

     

              (l) any other costs or expenses directly related to the Commercialization of a Licensed Product after
First Commercial Sale of such Licensed Product and not included in clauses (a)
through (k) above. 

     

         The foregoing shall not include any costs which have been included in
Development Costs. For clarity, it is the intent of the Parties that costs and
headcount included in the foregoing will be fairly allocated to the Licensed
Products in the Field in the Territory (to the extent that any Shared Commercial
Expense is attributable, in part, to products or activities other than the
Licensed Products in the Field in the Territory) and, in each case, will only be
included once in the calculation of the Quarterly True-Up.

     

    17 

     

    

    
    

              1.115 "Shared Phase 3 Trial Costs" shall mean Development Costs associated with
Phase 3 Trials of any Licensed Product incurred after the receipt of first
Positive Phase 3 Trial Results for such Licensed Product. 

     

              1.116 "Sublicensee" shall mean a Third Party or an Affiliate to
whom Sanofi will have granted a license or sublicense under Sanofi's rights
pursuant to Section 4.3 to Commercialize Licensed Products in the Field in the
Territory. For the avoidance of doubt, a "Sublicensee" will include a Third
Party to whom Sanofi will have granted the right to distribute Licensed Products
in the Field wherein such distributor pays to Sanofi a royalty (or other amount)
based upon the revenues received by the distributor for the sale (or resale) of
Licensed Products by such distributor. 

     

              1.117 "Target" shall mean any gene, receptor, ligand or
other molecule (a) associated with a disease activity that may be modified by
direct interaction with a Licensed Product or (b) to which a Licensed Product
binds.

     

              1.118 "Terminated Licensed Product"shall mean a Licensed Product as to which
this Agreement has been terminated in accordance with its terms in accordance
with Article XIX, and shall include any Opt-Out Product.

     

              1.119 "Termination Notice Period" shall mean the Sanofi Termination Notice
Period or the Regeneron Termination Notice Period, as applicable. 

     

              1.120 "Territory" shall mean all the countries and territories
of the world. 

     

              1.121 "Third Party" shall mean any Person other than Sanofi or
Regeneron or any Affiliate of either Party.

     

              1.122 "United States," "US" or "U.S." shall mean the United States of America
(including its territories and possessions) and Puerto Rico. 

     

              1.123 "US CPI" shall mean the Consumer Price Index – All
Urban Consumers published by the United States Department of Labor, Bureau of
Statistics (or its successor equivalent index).

     

              1.124 "Valid Claim" shall mean (a) a claim of an issued and
unexpired Patent (including the term of any patent term extension, supplemental
protection certificate, renewal or other extension) which has not been held
unpatentable, invalid or unenforceable in a final decision of a court or other
Governmental Authority of competent jurisdiction from which no appeal may be or
has been taken, and which has not been admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise; or (b) a claim of a
Patent Application, which claim has been pending less than five (5) years from
the original priority date of such claim in a given jurisdiction, unless or
until such claim thereafter issues as a claim of an issued Patent (from and
after which time the same shall be deemed a Valid Claim subject to paragraph (a)
above).

     

    18 

     

    

    
    

              1.125
Additional Definitions. Each of the following definitions is set
forth in the Sections (or Schedules) of this Agreement indicated
below:

     

    
      	DEFINITION 	       	SECTION/SCHEDULE
	Acquired Entity	 	2.6(c)
	Acquiring Party	
            	2.6(c)
	Agreement	
            	Preamble
	Alliance Manager	
            	3.2(a)
	Annual True-Up	
            	SCHEDULE 2
	Applicable ROW Percentages	
            	SCHEDULE 2
	Budget Dispute	
            	Section 3.11(b)
	Collaboration	
            	Preamble
	Collaboration Purpose	
            	3.1(b)
	Combination Product	
            	1.76
	Cost	
            	SCHEDULE 1
	Damages	
            	17.1(a)
	Default Interest Rate	
            	9.9
	Development Balance	
            	SCHEDULE 2
	Discovery Agreement	
            	Preamble
	Disputed Budget	
            	Section 3.11(b)
	Early Development Opt-Out Product
    	
            	5.6
	Effective Date	
            	Preamble
	Excluded Rights	
            	4.3
	Expert Panel	
            	10.4(a)
	First Year	
            	5.3
	Force Majeure	
            	ARTICLE XVIII
	Global Development Budget(s)	
            	5.3
	Governance Dispute	
            	10.2
	Incomplete Activity	
            	5.3
	Indemnified Party	
            	17.2
	Indemnifying Party	
            	17.2
	JCC	
            	3.1(a)
	JDC	
            	3.1(a)
	JFC	
            	3.1(a)
	JMC	
            	3.1(a)
	Joint Invention	
            	12.1(b)
	JSC	
            	3.1(a)
	Lead Litigation Party	
            	13.1(c)
	  
	Manufacturing Cost	
            	SCHEDULE 1
	Manufacturing Notice	
            	8.3(a)
	Manufacturing Plan	
            	8.5
	Marketing Guidelines	
            	3.4(b)(vi) 

    

    19

     

    

    
    

    
      	DEFINITION 	       	SECTION/SCHEDULE
	Maximum Regeneron Effort	
            	6.5(e)(i)
	Modified Clause	
            	20.7
	Non-Acquiring Party	
            	2.6(c)
	Non-Approval Trials	
            	6.2(h)
	Non-Incurred Amount	
            	5.3
	Opt-Out Partner	
            	2.6(d)
	Opt-Out Product Notice	
            	2.6(c)
	OverPaying Party	
            	Section 13.3(e)
	Party(ies)	
            	Preamble
	Patent Jurisdictions	
            	12.2(a)
	POC Principal Party	
            	5.2
	POC Time	
            	5.2
	Post-POC Principal Party	
            	5.2
	Publishing Party	
            	16.3
	Quarterly True-Up	
            	SCHEDULE 2
	Regeneron	
            	Preamble
	Regeneron Commitment Level	
            	6.5(e)(i)
	Regeneron Early Development Opt-Out Right	
            	5.6
	Regeneron Early Opt-Out Notice
	
            	5.6
	Regeneron Indemnitees	
            	17.1(a)
	Regeneron Profit Split	
            	SCHEDULE 2
	Regeneron Reimbursement Amount 	
            	SCHEDULE 2
	Regeneron Sole Inventions	
            	12.1(a)
	Regeneron Termination Notice Period	
            	19.2(b)
	Reimbursement Payment	
            	SCHEDULE 2
	Required Divestiture Notice Period	
            	2.6(c)
	Rest of World Profit Split	
            	SCHEDULE 2
	Royalty Term	
            	9.3
	ROW Profit Split	
            	SCHEDULE 2
	ROW Profit Split Annual True-Up 	
            	SCHEDULE 2
	Sanofi	
            	Preamble
	Sanofi Amerique	
            	Preamble
	Sanofi Indemnitees	
            	17.1(b)
	Sanofi Parent	
            	Preamble
	Sanofi Sole Inventions	
            	12.1(a)
	Sanofi Termination Notice Period 	
            	19.2(a)
	SDEA	
            	7.4
	Shared Phase 3 Trial Costs Balance	
            	SCHEDULE 2
	Sole Developer	
            	2.6(d)
	Sole Inventions	
            	12.1(a)
	Succeeding Year(s)	
            	5.3
	Target Labeling	
            	7.2(d)
	Target ROW Profit Split	
            	SCHEDULE 2
	Technical Development Matter	
            	10.2
	Term	
            	19.1(a)

    

    20

     

    

    
    

    
      	DEFINITION 	       	SECTION/SCHEDULE
	Third Party	
            	2.6(c)
	Third Party Acquisition	
            	2.6(c)
	U.S. Profit Split	
            	SCHEDULE 2
	US Profits	
            	SCHEDULE 2
	VelocImmune Royalties	
            	Section 13.3(e)
	Working Group	
            	3.1(a)

    

    ARTICLE II
COLLABORATION

     

              2.1
Scope of Collaboration. Upon and subject to terms and conditions of
this Agreement, the Parties will cooperate in good faith to Develop, Manufacture
and Commercialize Licensed Products in the Field in the Territory in such a
manner so as to optimize the commercial potential of each Licensed Product. The
Parties shall establish various Committees as set forth in Article III of this
Agreement to oversee and/or coordinate the Development, Manufacture and
Commercialization of Licensed Products in the Field in the Territory, and each
Party shall, subject to the terms and conditions set forth in Article XVI,
provide (or cause its Affiliates to provide) to any relevant Committee any
necessary Party Information, New Information and such other information and
materials as may be reasonably required for the Parties to operate effectively
and efficiently under and in accordance with the terms and conditions of this
Agreement. 

     

              2.2
Compliance With Law. Both Sanofi and Regeneron, and their
respective Affiliates, shall perform their obligations under this Agreement in
accordance with applicable Law. No Party or any of its Affiliates shall, or
shall be required to, undertake any activity under or in connection with this
Agreement which violates, or which it believes, in good faith, may violate, any
applicable Law. 

     

              2.3
Further Assurances and Transaction
Approvals. Upon the terms
and subject to the conditions hereof, each of the Parties will use Commercially
Reasonable Efforts to (a) take, or cause to be taken, all actions necessary,
proper or advisable under applicable Laws or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (b) obtain from the
requisite Governmental Authorities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by such
Party in connection with the authorization, execution and delivery by such Party
of this Agreement and the consummation by such Party of the transactions
contemplated by this Agreement and (c) make all necessary filings, and
thereafter make any other advisable submissions, with respect to this Agreement
and the transactions contemplated by this Agreement required to be made by such
Party under applicable Laws. The Parties will cooperate with each other in
connection with the making of all such filings. Each Party will furnish to the
other Party all information in its possession or under its control required for
any applicable or other filing to be made pursuant to the rules and regulations
of any applicable Laws in connection with the transactions contemplated by this
Agreement. 

     

              2.4
Compliance with Third Party
Agreements. Each Party
agrees to comply with the obligations set forth in (a) the Licenses to which it
is a party and to notify the other Party of any terms or conditions in any such
License with which such other Party is required to comply as a licensee or
sublicensee, as the case may be, and (b) any other material agreement, including
any sublicense under a License referenced in subsection (a) above, to which it
is a party and that is related to the Collaboration, including, without
limitation, any obligations to pay royalties, fees or other amounts due
thereunder. Neither Party may terminate or amend any License or any other
material agreement entered into pursuant to a Plan without the prior written
consent of the other Party, such consent not to be unreasonably withheld or
delayed, if the amendment or termination imposes any material liability or
restriction on either Party with respect to the Development, Manufacture or
Commercialization of Licensed Products in the Field in the
Territory.

     

    21

     

    

    
    

              2.5 Plans. The Parties shall undertake all Development
and Commercialization activities under this Agreement solely in accordance with
the Committee approved Plans. The Parties may agree to amend all Plans and
budgets from time to time as circumstances may require.

     

              2.6 Limitation on Exercise of Rights Outside of
Collaboration.

     

              (a) Non-Compete. Without limitation of and in addition and
subject to Section 2.8 of the Discovery Agreement, during the Term, except as
set forth in this Agreement or Section 2.8 of the Discovery Agreement, neither
Party nor any of its Affiliates, either alone or through any Third Party, shall
Develop or Commercialize any Competing Product.

     

              (b) Regeneron Sole Development. If Regeneron presents a proposal to the JDC
to undertake additional clinical trials not contemplated in a Global Development
Plan to support a Licensed Product in the Field and the JDC fails to approve the
proposal within the timeframe established by the JDC pursuant to Section 5.5,
then Regeneron may, at its option and at its sole expense, conduct such
additional clinical trial(s) outside the scope of the applicable Global
Development Plan; provided, however, Regeneron must first present the proposed
protocols and clinical trial designs to Sanofi for approval, such approval not
to be unreasonably withheld or delayed and, for other than Non-Approval Trials,
shall also present to Sanofi the related budgets for Clinical Supply Costs and
Out-of-Pocket Costs and applicable FTE costs (provided that such budgets shall
be provided for informational purposes only and may not be used to disapprove
such protocols and designs). Regeneron shall also provide to Sanofi drug safety
data from such additional clinical trials in accordance with Section 7.4. The
Sanofi representatives on the JDC may disapprove any such protocols or clinical
trial designs for reasons of safety or Sanofi reasonably believes that the
development as described in this Section 2.6(b) would have a material adverse
effect on the overall development strategy for the Licensed Product and/or the
commercial viability of such License Product, including the magnitude of sales
for such Licensed Product. If, in compliance with this Section 2.6(b), Sanofi
does not approve any such protocols or clinical trial designs for reasons as
described herein, Regeneron may not proceed with the proposed clinical trials
unless Regeneron disputes such disapproval and until the dispute has been
resolved, as provided in Section 3.11(b) and, if necessary, Section 10.4, in
Regeneron's favor. In the event that Regeneron conducts any such additional
clinical trials, all results, Know-How and Patent Rights generated in or arising
from any such clinical trial shall be subject to the grants of rights pursuant
to Article IV of this Agreement. For the avoidance of doubt, no consideration or
reimbursement shall be paid to Regeneron with respect to the conduct of any such
additional clinical trials; provided, however, that if the Parties subsequently
agree to commence a further clinical trial based on the results of such
additional clinical trial(s) or data is used from such additional clinical
trial(s) to support an Approval in the Territory, then Sanofi shall be required
to reimburse Regeneron for *********** of the actual Out-of-Pocket Costs and
Clinical Supply Costs and applicable FTE costs incurred in connection with the
conduct of such additional clinical trial(s) that are consistent with the
budgets provided to Sanofi pursuant to this Section 2.6(b) and the other terms
of this Agreement. Publication of any results or data obtained in conducting the
additional clinical trial(s) allowed under this Section 2.6(b) shall be subject
to Article XVI.

     

    22

     

    

    
    

    
                (c) Company Acquisitions. Notwithstanding Section 2.6(a), if as the
result of an acquisition of a Third Party (such acquisition a "Third Party Acquisition) by a Party or one or more of its Affiliates
(the "Acquiring Party"), the Acquiring Party acquires rights to a
product that is a Competing Product (the "Acquired Competing Product") to
a Licensed Product (the "Competing Licensed Product"), the Acquiring Party, at its sole
discretion, shall do one of the following: (W) present a proposal to the JDC to
include the Acquired Competing Product in the Collaboration in accordance with
Section 2.6(c)(i); (X) deliver to the other Party (the "Non-Acquiring Party") a termination notice, pursuant to Section
19.2(a) or 19.2 (b), as appropriate, and Section 2.6(c)(ii), with regard to the
Competing Licensed Product; or (Y) transfer its rights in the Acquired Competing
Product to a Third Party pursuant to Section 2.6(c)(iii).

       

      
                  (i) Proposal for Inclusion. If the Acquiring Party chooses this
alternative, within ten (10) Business Days after the closing of such Third Party
Acquisition, the Acquiring Party shall present a proposal to the JDC to include
such Acquired Competing Product in the Collaboration based on the terms of this
Agreement. As part of such presentation, the Acquiring party shall provide the
JDC with all information with respect to such Acquired Competing Product
reasonably available to the Acquiring Party and material to a decision by the
Non-Acquiring Party's representatives on the JDC as to whether to approve the
inclusion of such Acquired Competing Product in the Collaboration. The JDC
shall, on or before the date which is twenty (20) Business Days after the
closing of such Third Party Acquisition, decide whether to approve the inclusion
of such Acquired Competing Product in the Collaboration under the terms of this
Agreement. If the JDC timely approves the inclusion of such Acquired
Competing Product in the
Collaboration, then upon the closing of such Third Party Acquisition the
Acquired Competing Product shall automatically be included in the Collaboration
as a Licensed Product hereunder. If the JDC does not approve such inclusion, the
Acquiring Party shall elect whether to deliver to the Non-Acquiring Party a
termination notice, pursuant to Section 19.2(a) or 19.2 (b), as appropriate, and
Section 2.6(c)(ii), with regard to the Competing Licensed Product or transfer
its rights to the Acquired Competing Product to a Third Party (without any
consideration or payment to the Non-Acquiring Party in accordance with Section
2.6(c)(iii) below).

      

    

     

    23

     

    

    
    

    
                (ii) Termination of Licensed
Product. If the Acquiring
Party chooses this alternative, the Acquiring Party shall deliver to the
Non-Acquiring Party, within ten (10) Business Days after the decision of the JDC
not to include the Acquired Competing Product in the Collaboration pursuant to
Section 2.6(c)(i), a termination notice pursuant to Section 19.2(a) or 19.2(b),
as applicable, with respect to the Competing Licensed Product (the "Opt-Out Product Notice"). The provisions of Section 19.2(a) or
19.2(b), as applicable, and the provisions of Sections 19.7, 19.8 and Schedule 4
or 5, as applicable, shall then apply to such Competing Licensed Product. For
the avoidance of doubt, such Competing Licensed Product shall then be an Opt-Out
Product, and notwithstanding any other provision of this Agreement, the
Acquiring Party shall be deemed (without any requirement of notice to the
Non-Acquiring Party) to have irrevocably ceded all decision-making authority
with respect to such Opt-Out Product to the Non-Acquiring Party. In addition, if
such Opt-Out Product is being marketed and sold at the time of the closing of
the Third Party Acquisition, then during the Sanofi Termination Notice Period or
Regeneron Termination Notice Period, as applicable, the following shall apply:

       

      
        (1) In any Quarter in
which the U.S. Profits are positive, the U.S. Profit Split shall be zero percent
(0%) to the Acquiring Party and one hundred percent (100%) to the Non-Acquiring
Party, and in any Quarter in which the ROW Profits are positive, the ROW Profit
Split shall be zero percent (0%) to the Acquiring Party and one hundred percent
(100%) to the Non-Acquiring Party.

         

        (2) In any Quarter, in
which U.S. Profits are negative, the U.S. Profit Split shall be one hundred
percent (100%) to the Acquiring Party and zero percent (0%) to the Non-Acquiring
Party, and in any Quarter in which ROW Profits are negative, the ROW Profit
Split shall be one hundred percent (100%) to the Acquiring Party and zero
percent (0%) to the Non-Acquiring Party.

         

      

                (iii) Transfer of Rights. If the Acquiring Party chooses this
alternative, the Acquiring Party shall commit in writing to the Non-Acquiring
Party, within ten (10) Business Days after the closing of such Third Party
Acquisition, to license or otherwise transfer rights to such Acquired Competing
Product to a Third Party (without any consideration or payment to the
Non-Acquiring Party) and/or cease all development, manufacturing and/or
commercialization, as applicable, of such Acquired Competing Product within six
(6) months after the closing of the Third Party Acquisition, and shall do so
within such six (6) month period.

    

     

    24

     

    

    
    

              (d) Required Divestiture of Licensed
Product. Notwithstanding
any of the foregoing in this Section 2.6(d), in the event the Acquiring Party
believes, based on the written
advice of its counsel, that it is required by Law to divest its interest either
in the Acquired Competing Product or the Competing Licensed Product, the
Acquiring Party may terminate this Agreement with respect to such Competing
Licensed Product pursuant to Section 19.2(a) or 19.2 (b), as appropriate,
Section 2.6(c)(ii) and this Section 2.6(d), with regards to the Competing
Licensed Product, or transfer its interest in the Acquired Competing Product
pursuant to Section 2.6(c)(iii). If the Acquiring Party terminates this
Agreement with respect to the Competing Licensed Product pursuant to this
Section 2.6(d), it shall give the Non-Acquiring Party the maximum advance notice
(up to twelve (12) months) of termination consistent with such divestiture
requirement imposed by Law (the "Required Divestiture Notice
Period"), following which
the provisions of 2.6(c)(ii) shall apply and the Competing Licensed Product
shall be an Opt-Out Product. During this period, the Acquiring Party will
reasonably cooperate (at the Acquiring Party's sole cost and expense) with the
Non-Acquiring Party to enable the Non-Acquiring Party to assume, within the
Required Divestiture Notice Period, the continued Development, Manufacture and
Commercialization of such Opt-Out Product in the Field in the Territory. The
Acquiring Party shall also be responsible for, and shall promptly pay upon
demand, all reasonable costs and expenses incurred by the Non-Acquiring Party in
assuming such continued Development, Manufacture and Commercialization of such
Opt-Out Product to the extent such costs and expenses, other than capital
investments, would not have been incurred and/or would have been paid by the
Acquiring Party, absent such Acquiring Party's termination with respect to such
Opt-Out Product pursuant to Section 19.2(a) or (b). For the avoidance of doubt,
if the Required Divestiture Notice Period is less than the twelve (12) months
required by Section 19.2, the Acquiring Party shall have continuing payment
obligations (though no performance obligations beyond those described above) to
the Non-Acquiring Party with respect to such Opt-Out Product for the entire
Sanofi Termination Notice Period (if Sanofi is the Acquiring Party) or Regeneron
Termination Notice Period (if Regeneron is the Acquiring Party). Subject to the
further provisions of this Section 2.6(d), in the case of any Opt-Out Product,
the non-terminating Party (the "Sole
Developer") shall have the right to Develop and Commercialize such
Opt-Out Product, unless such Opt-Out Product is (or becomes) a Competing Opt-Out
Product, in which case the Sole Developer may not (either directly or through an
Affiliate or Third Party), Develop or Commercialize such Competing Opt-Out
Product for a period of ************* following the date it becomes a Competing
Opt-Out Product (or, if shorter, such period ending on the date such Competing
Opt-Out Product ceases to be a Competing Opt-Out Product), unless otherwise
agreed by the terminating Party (the "Opt-Out Partner"). If an Opt-Out Product is Commercialized by
the Sole Developer (either directly or through an Affiliate or Third Party) in
compliance with this Section 2.6(d), then the Sole Developer shall pay the
Opt-Out Partner royalties based on Net Sales of such Opt-Out Product and the stage of
Development of the Licensed Product at the time it became an Opt-Out Product, at
the royalty rate(s) described on Exhibit A. Notwithstanding the foregoing or any
other provision of this Agreement, in the case of any Opt-Out Product, including
any Competing Opt-Out Product, resulting from termination of this Agreement with
respect to a Licensed Product pursuant to Section 19.2 in the circumstances
described in Section 2.6(c), the Sole Developer shall have no obligation either
to delay Developing or Commercializing, or to pay royalties with respect to,
such Opt-Out Product.

     

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                (e) Clinical Trials for Combination
Products. Notwithstanding
anything in this Section 2.6(e) to the contrary, each Party and/or its
respective Affiliates shall be entitled to (i) initiate, sponsor and/or conduct
a clinical trial and/or (ii) participate, directly or indirectly, whether
through the provision of funds, grants or otherwise, in any clinical trial,
initiated, sponsored and/or conducted by any Third Party, in each of the
foregoing cases with respect to the combination of any Party's (or its
Affiliate's) product, together with any Competing Product that has been granted
a Marketing Approval for at least one Indication in the applicable country,
unless (A) a Licensed Product Developed under this Agreement has been granted a
Marketing Approval in the applicable country for use in combination with such
Party's (or its Affiliate's) product in the same Indication(s) as the one to be
studied in the intended clinical trial with the Competing Product which is not
approved in such Indication or (B) both the Competing Product and a Licensed
Product Developed under this Agreement have been granted a Marketing Approval in
the applicable country for use in combination with such Party (or its
Affiliate's) product as the same Indication to be studied in the intended
clinical trial with the Competing Product and the relevant labeling of both the
Licensed Product and the Competing Product for such Indication is substantially
similar. For any combination study with a Competing Product covered by this
Section 2.6(e), the applicable Party shall notify the other Party prior to
initiating such trial, such notice to include a brief synopsis of the protocol
and a description of the Party's (or its Affiliate's) role(s) and
responsibilities in connection with the study. Further, for any combination
study with a Competing Product covered by this Section 2.6(e), each Party shall
promptly provide the other Party with available results of such combination
study, unless such disclosure is prohibited by Law or contract. Each Party
and/or its Affiliates shall be entitled to use data from clinical trials
permitted by this Section 2.6(e) to promote the combination of such Party
product together with such Competing Product, unless a Licensed Product
Developed has been granted a Marketing Approval in the applicable country for
use in combination with such Third Party product, in the same Indication.
Neither Party nor its respective Affiliates shall receive any compensation or
other payments (either in cash or in kind) based on the development, promotion,
or sale of a Competing Product. Neither Party will intentionally delay the
commencement, enrollment or completion of a clinical study of a Licensed Product
as a result of any ongoing or pending clinical trial permitted by this Section
2.6(e). For the avoidance of doubt, neither Party nor its respective Affiliates
shall use or disclose any Party Information or New Information subject to the
confidentiality provisions of Article XVI in connection with any of the
activities described in this Section 2.6(e).

       

                (f) Sanofi Rights. Notwithstanding Section 2.6(a), if Sanofi or
its Affiliate wishes to acquire or license rights to a Competing Product other
than through the acquisition of a Third Party (which is covered in Section
2.6(c) above), and the applicable Licensed Product against the same Target as
such Competing Product has not yet commenced Development in any Phase 3 Trial in
any indication, then during the Sanofi Termination Notice Period following
Regeneron’s receipt of Sanofi’s termination notice for such Licensed Product
under Section 19.2(a), Sanofi or its Affiliate shall have the right to acquire,
license, Develop and Commercialize a Competing Product, either alone or through
any Third Party, and the provisions of Section 19.2(a), 19.7, 19.8, and Schedule
4 shall then apply with respect to such Licensed Product.

    

     

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    ARTICLE III
MANAGEMENT

     

              3.1 Committees/Management.

     

    
                (a) The Parties agree to
establish, for the purposes specified herein, a Joint Steering Committee (the
"JSC"), a Joint Development Committee (the
"JDC"), a Joint Commercialization Committee (the
"JCC"), CRCCs to the extent provided in Section
3.5, and such other commercialization sub-committee as JCC shall deem to be
appropriate, a Joint Manufacturing Committee ("JMC"), a Joint Finance Committee (the
"JFC") and such other Committees as the Parties
deem appropriate. The JSC, JDC, JFC and JMC shall each be established within
thirty (30) days after the Effective Date. The JCC shall be established at least
two (2) years prior to the anticipated filing date for Marketing Approval for
the first Licensed Product under this Agreement. It is understood that the
Parties may wish to establish multiple Committees reporting to the JSC, JDC, and
JCC with responsibility for different Licensed Products. The roles and
responsibilities of each Committee are set forth in this Agreement (or as may be
determined by the JSC for Committees established in the future and not described
herein) and may be further designated by the JSC. From time to time, each
Committee may establish working groups (each, a "Working Group") to oversee particular projects or
activities, and each such Working Group shall be constituted and shall operate
as the Committee which establishes the Working Group determines. 

       

                (b) Each of the Committees
and the Executive Officers shall exercise its decision-making authority
hereunder in good faith and in a commercially reasonable manner for the purpose
of optimizing the commercial potential of and financial returns from the
Licensed Products in the Field in the Territory consistent with Commercially
Reasonable Efforts and without regard to any other pharmaceutical product being
developed or commercialized in the Field by or through a Party or any of its
Affiliates (the "Collaboration Purpose"). The Parties acknowledge and agree that
none of the Committees or the Executive Officers shall have the power to amend
any of the terms or conditions of this Agreement, other than by mutual agreement
of the Parties as set forth in Section 20.5.

    

     

              3.2 Joint Steering Committee. 

     

    
                (a) Composition and Purpose. The JSC shall have overall responsibility
for the oversight of the Collaboration. The purpose of the JSC shall be (i) to
review and approve the overall strategy for an integrated worldwide Development
program for each Licensed Product, including the Manufacture of Licensed
Products in the Field for use in activities under the Plans and for the
Commercialization of Licensed Products in the Field in the Territory; (ii) to
review the efforts of the Parties in performing their responsibilities under the
Plans and (iii) to oversee the Committees and resolve matters pursuant to the
provisions of Section 3.11 below on which such Committees are unable to reach
consensus. The JSC shall be composed of at least three (3) senior executives of
each Party; provided that the total number of representatives may be changed
upon mutual agreement of the Parties (so long as each Party has an equal number
of representatives). In addition, each Party shall appoint a senior
representative who possesses a general understanding of clinical, regulatory,
manufacturing and marketing issues to act as its Alliance Manager ("Alliance Manager") to the JSC. Each Alliance Manager shall be
charged with creating and maintaining a collaborative work environment within
and among all Committees and providing single-point communication for seeking
consensus both within the respective Party's organization and with the other
Party's organization.

    

     

    27

     

    

    
    

    
                (b) Specific Responsibilities. In addition to its overall responsibility
for overseeing the Collaboration, the JSC shall in particular (i) annually
review and approve the Global Development Plan(s) if any, Manufacturing Plan(s),
Global Commercialization Plan(s) and Country/Region Commercialization Plan(s);
(ii) at least semi-annually review the efforts of the Parties in performing
their respective Development and Commercialization activities under the
then-effective Plans; (iii) attempt in good faith to resolve any disputes
referred to it by any of the Committees and provide a single-point of
communication for seeking consensus regarding key global strategy and Plan
issues; (iv) establish sub-committees of the JSC, as the JSC deems appropriate
and (v) consider and act upon such other matters as are specifically assigned to
the JSC under this Agreement or otherwise agreed by the
Parties.

    

     

              3.3 Joint Development Committee. 

     

    
                (a) Composition and Purpose. The purpose of the JDC shall be (i) to
advise the JSC on the strategy for the worldwide Development of each Licensed
Product in the Field; (ii) to develop (or oversee the development of), review
and annually update and present to the JSC for approval the Global Development
Plan(s) (and related Global Development Budget(s)) and (iii) to oversee the
implementation of the Global Development Plan(s) and the Development operational
aspects of the Collaboration. The JDC shall be composed of at least three (3)
senior executives of each Party; provided that the total number of
representatives may be changed upon mutual agreement of the Parties (so long as
each Party has an equal number of representatives). 

       

                (b) Specific Responsibilities. In particular, the JDC shall be responsible
for: 

       

      
                  (i) advising the JSC on the
overall global Development strategy for each Licensed Product in the Field;

         

                  (ii) developing (or overseeing
the development of), and updating at least annually, the Global Development
Plan(s) (and related Global Development Budget(s)), as described in Sections 5.2
and 5.3, for final approval by the JSC;

      

    

     

    28

     

    

    
    

    
                (iii) reviewing and overseeing
the implementation of, and compliance with, the Global Development Plan(s)
(including the Global Development Budget(s)); 

       

                (iv) developing forecasts for
Clinical Supply Requirements to enable the timely preparation of the
Manufacturing Plan; 

       

                (v) overseeing clinical and
regulatory matters pertaining to Licensed Products in the Field arising from the
Plans, and reviewing and approving protocols, statistical analysis plans,
clinical study endpoints, clinical methodology and monitoring requirements for
clinical trials of Licensed Products in the Field as contemplated under the
Global Development Plan(s) and for Non-Approval Trials; 

       

                (vi) reviewing and approving
proposed target Licensed Product labeling and reviewing and, to the extent set
forth herein, approving proposed changes to product labeling with respect to
Licensed Products in the Field in accordance with Section 7.2; 

       

                (vii) developing a target profile for each Licensed Product; 

       

                (viii) facilitating an exchange
between the Parties of data, information, material and results relating to the
Development of Licensed Products in the Field; 

       

                (ix) formulating a life-cycle
management strategy for Licensed Products in the Field and evaluating new
opportunities for new formulations, delivery systems and improvements in concert
with the JCC; 

       

                (x) establishing a regulatory
Working Group responsible for overseeing, monitoring and coordinating the
submission of Registration Filings in countries in the Territory, including
coordinating material communications, filings and correspondence with Regulatory
Authorities in the Territory in connection with the Licensed Products in the
Field; 

       

                (xi) establishing a Working
Group responsible for overseeing all basic research activities for Licensed
Products in the Field conducted under the Global Development Plan(s);

       

                (xii) considering and acting
upon such other matters as specifically assigned to the JDC under this Agreement
or by the JSC.

    

     

              3.4 Joint Commercialization
Committee. 

     

    
                (a) Composition and Purpose. The purpose of the JCC shall be to develop
and propose to the JDC and JSC the strategy for the global Commercialization of
Licensed Products in the Field in the Territory, and to oversee the
implementation of the Global Commercialization Plans and the Commercialization
operational aspects of the Collaboration on a country-by-country basis. The JCC
shall be composed of at least two (2) senior executives of each Party; provided
that the total number of representatives may be changed upon mutual agreement of
the Parties (so long as each Party has an equal number of
representatives).

    

     

    29

     

    

    
    

    
                (b) JCC Responsibilities. In particular, the JCC shall be responsible
for:

       

      
                  (i) developing and proposing
to the JSC the global strategy for the Commercialization of each Licensed
Product in the Field in the Territory; 

         

                  (ii) commencing no later than
two (2) years prior to the Anticipated First Commercial Sale anywhere in the
Territory, (A) developing (or overseeing the development of), and updating not
less frequently than once per Contract Year, the Global Commercialization
Plan(s) and related Global Commercialization Budget(s) on a country-by-country
basis for final approval by the JSC and (B) establishing, to the extent provided
in Section 3.5, Country/Region Commercialization Committees to establish
Country/Region Commercialization Plans (and related Country/Region
Commercialization Budgets) and any updates thereto and carry out the other
activities described in Section 3.5; 

         

                  (iii)
Defining target groups to be covered by overall marketing efforts in the
applicable country, including, without limitation,
*************************************************; 

         

                  (iv) Establishing the trade
dress for each Licensed Product, consistent with the guidelines established by
the JCC, in the applicable Major Market Country; 

         

                  (v) developing forecasts for
Commercial Supply Requirements for the Territory to enable the timely
preparation of the Manufacturing Plan(s) for review by the JMC and approval by
the JSC; 

         

                  (vi) for each Licensed Product, on a
country-by-country basis for the Major Market Countries, developing and
updating, as necessary, global promotional guidelines for branding, positioning,
core messages and Promotional Material messages and Licensed Product pricing and
rebate/discount guidelines; guidelines for determining the percentage of sales
force compensation linked to sales of such Licensed Product (collectively, the
items referred to in this paragraph (vi) shall be referred to as the "Marketing
Guidelines") as part of the Global Commercialization Plan; 

         

                  (vii) reviewing and overseeing
compliance with the Global Commercialization Plan (including the related Global
Commercialization Budget), and Country/Region Commercialization Plans (including
the Country/Region Commercialization Budgets), to the extent applicable, for
each Licensed Product, including ensuring that country specific launch plans are
consistent with the Marketing Guidelines, and reviewing and validating latest
annual estimates for the current calendar year compared to the Global
Commercialization Budget and Country/Region Commercialization Budgets;

         

                  (viii) establishing or
validating the number and position of Details required to meet market and sales
forecasts and their conversion into the equivalent number of Detailing FTEs
according to applicable weighting factors, based upon sales force and market
practices, on a country-by-country basis, consistent, however, with the
applicable Marketing Guidelines;

      

    

     

    30

     

    

    
    

    
      
                  (ix) for each Licensed
Product, selecting a Product Trademark in accordance with Section 11.2 and
giving guidance on trade dress for such Licensed Product; 

         

                  (x) determining the launch
date for each Licensed Product on a country-by-country basis in Major Market
Countries; 

         

                  (xi)
reviewing and approving ********************** and similar policies for each
Licensed Product in the applicable Major Market Country, which shall be
consistent with the Marketing Guidelines; 

         

                  (xii) preparing short-term and
long-term sales forecasts for each Licensed Product on a country-by-basis for
Major Market Countries and reviewing such forecasts for the remaining countries;

         

                  (xiii)
***********************************, and (C) determining which such trials
should be conducted, rejected or redesigned and whether any such trials should
be referred to the JDC for consideration for inclusion in the applicable Global
Development Plan;

         

                  (xiv) validating the contents,
design and layout of packaging for each Licensed Product in the Field;

         

                  (xv) validating plans and
policies regarding journal and other publications with respect to each Licensed
Product in the Field in concert with the JDC; 

         

                  (xvi) formulating a life-cycle
management strategy for each Licensed Product in the Field and evaluating new
opportunities for new indications, formulations, delivery systems and
improvements in concert with the JDC;

         

                  (xvii) matters relating to
Regeneron's Commitment Level with respect to a Licensed Product in a
Co-Commercialization Country, including consenting to changes therein; and

         

                  (xviii) considering and acting
upon such other matters as specifically assigned to the JCC under this Agreement
or by the JSC, JDC JFC or JMC.

      

    

     

              3.5 Country/Region Commercialization
Committees. The JCC will
establish a Country/Region Commercialization Committee in each Major Market
Country, and in each other Reporting Country/Region as and when determined by
the JCC. The Country/Region Commercialization Committees will be responsible for establishing the
Country/Region Commercialization Plans (and related Country/Region
Commercialization Budgets) and any updates thereto with respect to the
applicable Reporting Countries/Region(s). The Country/Region Commercialization Committees
will also serve as a forum to consider and discuss and, if so empowered by the
JCC, decide, in a more detailed and focused manner with respect to the
applicable Reporting Countries/Region(s), and make suggestions or
recommendations to the JCC with respect to, the matters referred to in Section
3.4, as applicable, including the implementation of decisions with respect
thereto made by the JCC as contemplated by such Section 3.4.

     

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              3.6 Joint Finance Committee. The JFC shall be responsible for accounting,
financial (including planning, reporting and controls) and funds flow matters
related to the Collaboration and this Agreement, including such specific
responsibilities set forth in Article IX and such other responsibilities
determined by the JSC. The JFC also shall respond to inquiries from the JDC, the
JMC and the JCC, as needed. 

     

              3.7 Joint Manufacturing
Committee. Working with
the JDC and JCC, as appropriate, the Joint Manufacturing Committee shall be
responsible for overseeing process development and Manufacturing activities,
including preparing and updating the Manufacturing Plan for approval by the JSC
and carrying out such other responsibilities set forth in Article VIII, process
and technology selection, process improvements and related intellectual property
filing strategy and obtaining a common process for manufacturing, recalls,
market withdrawals, and any other corrective actions related to any Licensed
Product in the Territory, and for any other matters specifically assigned to the
JMC by the JSC. For process development activities, the Joint Manufacturing
Committee shall consult the appropriate expert functions within both Parties or
their Affiliates as appropriate.

     

              3.8 Membership. Each of the Committees shall be composed of
an equal number of representatives appointed by each of Regeneron and Sanofi.
Each Party may replace its Committee members upon written notice to the other
Party. Each Committee will have two (2) co-chairpersons, one designated by each
of Regeneron and Sanofi. Each co-chairperson shall be entitled to call meetings.
The co-chairpersons shall coordinate activities to prepare and circulate an
agenda in advance of the meeting and prepare and issue final minutes within
thirty (30) days thereafter. 

     

              3.9 Meetings. Each Committee shall hold meetings at such
times as the Parties shall determine, but in no event less frequently than once
every Quarter during the Term, commencing from and after the time such Committee
is established as provided herein. If possible, the meetings shall be held in
person (to the extent practicable, alternating the site for such meetings
between the Parties or their Affiliates) or when agreed by the Parties, by video
or telephone conference. Other representatives of each Party or of Third Parties
involved in the Development, Manufacture or Commercialization of any Licensed
Product in the Field (under obligations of confidentiality) may be invited by
the Committee co-chairs to attend meetings of the Committees as nonvoting
participants. Each Party shall be responsible for all of its own expenses of
participating in the Committees. Either Party's representatives on a Committee
may call a special meeting of the applicable Committee upon at least five (5)
Business Days' prior written notice, except that emergency meetings may be
called with at least two (2) Business Days' prior written notice. 

     

              3.10 Decision-Making. The Committees shall operate by consensus.
The representatives of each Party shall have collectively one (1) vote on behalf
of such Party; provided that no such vote taken at a meeting shall be valid
unless a representative of each Party is present and participating in the vote.
Notwithstanding the foregoing, each Party, in its sole discretion, by written
notice to the other Party, may choose not to have representatives on a Committee
and leave decisions of such Committee(s) to representatives of the other
Party.

     

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              3.11 Resolution of Governance
Matters. As provided in
Section 10.2, this Section 3.11 shall apply to matters constituting, or which if
not resolved would constitute, a Governance Dispute. 

     

    
                (a) Generally. The Parties shall cause their respective
representatives on the Committees to use their Commercially Reasonable Efforts
to resolve all matters presented to them as expeditiously as possible, provided
that, in the case of any matter which cannot be resolved by the JDC, JCC, CRCC,
JMC, JFC or other relevant Committee established hereunder, at the request of
either Party, such matter shall promptly, and in any event within ten (10)
Business Days (or two (2) Business Day in the event of an urgent matter) after
such request, be referred to the JSC with a request for resolution.

       

                (b) Referral to Executive
Officers. In the event
that the JSC is, after a period of five (5) Business Days from the date a matter
is submitted to it for resolution pursuant to Section 3.11(a), unable to make a
decision due to a lack of required unanimity, then either Party may require that
the matter be submitted to the Executive Officers for a joint decision. In such
event, either Party may, in a written notice to the other Party, formally
request that the dispute be resolved by the Executive Officers, specifying the
nature of the dispute with sufficient specificity to permit adequate
consideration by such Executive Officers. The Executive Officers shall
diligently and in good faith, attempt to resolve the referred dispute within
five (5) Business Days of receiving such written notification, failing which,
************************. 

       

                (c) Notwithstanding the
foregoing, and subject to Section 10.4, Legal Disputes and disputes referred to
in the third sentence of Section 2.6(b) which involve a Technical Development
Matter shall be referred to the Executive Officers with no Party's Executive
Officer having final decision making authority.

       

                (d) Interim Budgets. Pending resolution by the Executive Officers
of any referred dispute under Section 3.11(b) and subject to the terms of
Section 19.2, the Executive Officers shall negotiate in good faith in an effort
to agree to appropriate interim budgets and plans to allow the Parties to
continue to use Commercially Reasonable Efforts to Develop, Manufacture and
Commercialize the Licensed Products in the Field in the Territory pursuant to
this Agreement. The most recent Committee approved Plan(s) shall be extended
pending approval by the Executive Officers of the interim budget(s) and Plan(s)
referred to in this Section 3.11(c).

       

                (e) Obligations of the Parties. The Parties shall cause their respective
designees on the Committees and their respective Executive Officers to take the
actions and make the decisions provided herein to be taken and made by such
respective designees and Executive Officers in the manner and within the
applicable time periods provided herein. To the extent a Party performs any of
its obligations hereunder through any Affiliate of such Party, such Party shall
be fully responsible and liable hereunder and thereunder for any failure of such
performance, and each Party agrees that it will cause each of its Affiliates to
comply with any provision of this Agreement which restricts or prohibits a Party
from taking any specified action.

    

     

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    ARTICLE IV
LICENSE GRANTS

     

              4.1 Regeneron License Grants. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 4.6) and any License to which
Regeneron is a party, Regeneron hereby grants to Sanofi (a) the nontransferable
(except as permitted by Section 20.9), co-exclusive (with Regeneron and its
Affiliates) right and license under the Regeneron Intellectual Property to make,
have made, use, develop and import Licensed Products for use in the Field in the
Territory, and (b) the nontransferable (except as permitted by Section 20.9),
exclusive (except as otherwise provided below in this Section 4.1) right and
license under the Regeneron Intellectual Property to sell and offer to sell
Licensed Products in the Field in the Territory, except that the right and
license granted pursuant to this clause (b) shall be co-exclusive (with
Regeneron and its Affiliates) to the extent of Regeneron's right to Co-Promote
Licensed Products and Regeneron's right to supply Licensed Products to Sanofi,
as contemplated by this Agreement. Sanofi will have the right to grant
sublicenses under the foregoing license only as set forth in Section
4.4. 

     

              4.2 Sanofi License Grants. Subject to the terms and conditions of this
Agreement and any License to which Sanofi or any of its Affiliates is a party,
Sanofi hereby grants to Regeneron the nontransferable (except as permitted by
Section 20.9), royalty-free, co-exclusive (with Sanofi and its Affiliates) right
and license under the Sanofi Intellectual Property to the extent necessary to
make, have made, use, develop and import Licensed Products for use in the Field
in the Territory and to Co-Promote Licensed Products to the extent provided in
this Agreement. 

     

              4.3 Newly Created Intellectual
Property. In addition to
the other licenses granted under this Article IV and subject to the other terms
and conditions of this Agreement, to the extent permitted under any relevant
Third Party agreement, each Party grants to the other Party and its Affiliates
the perpetual, royalty-free, paid-up, non-exclusive, worldwide right and
license, with the right to grant sublicenses, to use and practice for any and
all purposes: all intellectual property (including, without limitation,
Know-How, Patents and Patent Applications and copyrights), other than Know-How
jointly owned pursuant to Section 12.1(e) and other than Excluded Rights,
discovered, invented, authored or otherwise created by it (or its Affiliate)
after the Effective Date directly in connection with the performance of the
research and clinical activities approved by the JDC, in each case, as included
in the Global Development Plans. As used above, the term "Excluded Rights" shall mean any Patents or Know-How claiming
or covering composition (including any formulation) of a Licensed Product. For
the avoidance of doubt, nothing in this Section 4.3 shall be construed to grant
either Party any license to Patents or Know-How of the other Party discovered,
invented, authored or otherwise created by it outside the performance of the
research activities approved by the JDC and/or the clinical development
activities approved by the JDC, in each case, as included in Global Development
Plans. 

     

    34

     

    

    
    

              4.4 Sublicensing. Unless otherwise restricted by any License,
Sanofi will have the right to sublicense any of its rights under the first
sentence of Section 4.1 only with the prior written consent of Regeneron, such
consent not to be unreasonably withheld or delayed with respect to rights
outside the Major Market Countries (and only with the prior written consent of
Regeneron, which consent may be withheld for any reason, in the Major Market
Countries), except that Sanofi may sublicense any of its
rights hereunder to an Affiliate for purposes of meeting its obligations under
this Agreement without Regeneron's consent. Unless otherwise restricted by any
License, Regeneron will have the right to sublicense any of its rights under
Section 4.2 with the prior written consent of Sanofi, such consent not to be
unreasonably withheld or delayed, except that Regeneron may sublicense any of
its rights hereunder to an Affiliate for purposes of meeting its obligations
under this Agreement without Sanofi's consent. Each Party shall remain
responsible and liable for the compliance by its Affiliates and Sublicensees
with applicable terms and conditions set forth in this Agreement. Any such
sublicense agreement will require the Sublicensee of a Party to comply with the
obligations of such Party as contained herein, including, without limitation,
the confidentiality and non-use obligations set forth in Article XVI, and will
include, with respect to a Sublicensee of Sanofi, an obligation of the
Sublicensee to account for and report its sales of Licensed Products to Sanofi
on the same basis as if such sales were Net Sales by Sanofi. For the avoidance
of doubt, Regeneron shall be entitled to receive its share of the applicable
Profit Split based on Net Sales of Licensed Products sold by Sublicensees under
this Agreement. In the event of a breach by a Sublicensee of any sublicense
agreement which has or is reasonably likely to have an adverse effect on either
Party or any of its Affiliates or any Party's Intellectual Property, then the
harmed Party may cause the other Party or its Affiliate to exercise, and the
other Party or its Affiliate will promptly exercise, any termination rights it
may have under the sublicense with the Sublicensee. Any sublicense agreement
will provide for the termination of the sublicense or the conversion of the
sublicense to a license directly between the Sublicensee and the other Party, at
the option of the other Party, upon termination of this Agreement. Furthermore,
any such sublicense shall prohibit any further sublicense or assignment. Each
Party will forward to the other Party a complete copy of each applicable fully
executed sublicense agreement (and any amendment(s) thereto) within ten (10)
days of the execution of such agreement. 

     

              4.5 No Implied License. Except as expressly provided in this Article
IV or elsewhere in this Agreement, neither Party will be deemed by this
Agreement to have been granted any license or other rights to the other Party's
Patent Rights, Know-How, or Party Information either expressly or by
implication, estoppel or otherwise. 

     

              4.6 Retained Rights. With respect to the licenses granted under
this Article IV, and for the avoidance of doubt, Regeneron expressly reserves
for itself and its Affiliates and Third Party licensees under the Regeneron
Intellectual Property and Regeneron's interest in the Joint Inventions, the
right to Manufacture and to Commercialize Licensed Products for use in the Field
in the Territory in accordance with this Agreement. For the further avoidance of
doubt, Regeneron retains all rights in Regeneron Intellectual Property,
Regeneron's interest in the Joint Inventions and Licensed Products not expressly
licensed hereunder, including, without limitation the right to exploit Regeneron
Intellectual Property and Regeneron's interest in Joint Inventions for purposes
unrelated to the Licensed Products in the Field. With respect to the licenses
granted under this Article IV, and for the avoidance of doubt, Sanofi expressly
reserves for itself and its Affiliates and Third Party licensees under the
Sanofi Intellectual Property and Sanofi's interest in the Joint Inventions, the
right to Manufacture and to Commercialize Licensed Products for use in the Field
in the Territory in accordance with this Agreement. For the avoidance of doubt,
Sanofi retains all rights in Sanofi Intellectual Property, Sanofi's interest in
the Joint Inventions and Licensed Products not expressly licensed hereunder,
including, without limitation, the right to exploit Sanofi Intellectual Property
and Sanofi's interest in Joint Inventions for purposes unrelated to the Licensed
Products in the Field.

     

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    ARTICLE V
DEVELOPMENT ACTIVITIES

     

              5.1 Development of Licensed
Products. Subject to the
terms of this Agreement, the
Parties shall undertake Development activities with respect to Licensed Products
in the Field pursuant to the Global Development Plans under the general
direction and oversight of the JDC. Each Party shall use Commercially Reasonable
Efforts to Develop Licensed Products in the Field, carry out the Development
activities assigned to it in Development Plans in a timely manner and conduct
all such activities in compliance with applicable Laws, including, without
limitation, Good Practices.

     

              5.2 Global Development Plans. With respect to each Licensed Product, the
JDC shall prepare and present a Global Development Plan for approval by the JSC,
and the JSC shall approve a Global Development Plan for such Licensed Product,
within three (3) months after the time such Licensed Product first becomes a
Licensed Product in accordance with the terms of the Discovery Agreement and
this Agreement, and shall, subject to the further provisions of this Section
5.2, determine which Party will take the lead in the Development of such
Licensed Product. Prior to such JSC approval of the first Global Development
Plan for any Licensed Product, the Parties shall Develop the Licensed Product in
accordance with the applicable Initial Development Plan. An updated Global
Development Plan for such Licensed Product will be presented by the JDC for
approval by the JSC, and approved by the JSC, at least two (2) months prior to
the end of each Contract Year. Each Global Development Plan for a Licensed
Product will set forth the plan for Development of such Licensed Product in the
Field over at least three (3) Contract Years and will include (a) strategies and
timelines for Developing and obtaining Approvals for such Licensed Product in
the Field in the Territory, and (b) the allocation of responsibilities for
Development activities between the Parties, and/or Third Party service
providers. Each Global Development Plan will be reviewed and informally updated
by the JDC not less frequently than once every six (6) months for the ensuing
three (3) year period. Unless and to the extent otherwise agreed by the Parties
with respect to a particular Licensed Product, (i) the Parties shall alternate,
on a Licensed Product-by-Licensed Product basis, in being allocated principal
responsibility for formulating, and carrying out, the principal Development
activities for the applicable Licensed Product under the applicable Global
Development Plan(s) from the time the applicable Product Candidate is advanced
into Development in accordance with the Discovery Agreement (whereupon such
Product Candidate automatically constitutes a Licensed Product) through proof of
concept as defined in the Global Development Plan for the Licensed Product (the
"POC Time") (with respect to any Licensed Product, the
Party with such principal responsibility through the POC Time being referred to
as the "POC Principal Party") and (ii) the Parties shall alternate being
allocated principal responsibility for formulating, and carrying out, all
clinical trials conducted subsequent to the POC Time for the applicable Licensed
Product(s) under the applicable Global Development Plan(s) (with respect to a
Licensed Product, the Party with such principal responsibility being referred to
as the "Post-POC Principal Party"), with Sanofi being the Post-POC Principal
Party for two (2), and Regeneron being the Post-POC Principal Party for one (1),
out of each three (3) Licensed Products. The Parties shall cause their
respective representatives on the JDC and the JSC, in preparing, updating and
approving Global Development Plans, to allocate principal Development
responsibilities thereunder as provided in this Section 5.2.

     

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              5.3 Global Development Budgets. Each Global Development Plan for a Licensed
Product shall include a related Global Development Budget (each individually, a
"Global Development Budget" and collectively, "Global Development Budgets") and each Global Development Budget shall be
prepared, updated, reviewed and approved as part of the preparation, update and
approval of the Global Development Plan of which such Global Development Budget
is a part in accordance with this Agreement. Amendments and updates to any
Global Development Budget shall not be effective without the approval of the
JSC. 

     

              5.4 Development Reports. Within forty-five (45) days after the end of
each Quarter, commencing in the first Quarter in which Development activities
commence hereunder with respect to the first Licensed Product, Regeneron and
Sanofi shall each provide to the other Party a written report (in electronic
form) summarizing the material activities undertaken by such Party during such
Quarter in connection with each Global Development Plan, together with a
statement of Development Costs incurred by such Party during such Quarter, which
statement shall detail those amounts to be included in the Consolidated Payment
Report for such Quarter and shall be in such form, format and of such level of
detail as approved by the JFC. At the next JSC meeting held following such
forty-five (45) day period, the JSC will approve the final Development Costs
which will be used in calculating the Global Development Balance. 

     

              5.5 Review of Clinical Trial
Protocols. The JDC will
establish procedures for the expeditious review of clinical trial protocols for
the Licensed Products submitted to the JDC by Regeneron pursuant to Section
2.6(b), including, without limitation, pre-approval authorizations for
Non-Approval Trials. 

     

              5.6 Regeneron Early Development
Opt-Out. Within thirty
(30) days of the date that Sanofi exercises its Opt-In Rights with respect to
any Licensed Product thereby including such Licensed Product under this
Agreement, Regeneron shall have a one-time right to opt-out of the further
Development of such Licensed Product (such right of Regeneron, the "Regeneron Early Development Opt-Out
Right", and each such
Licensed Product as to which Regeneron has exercised the Regeneron Early
Development Opt-Out Right, an "Early Development Opt-Out Product") by delivering written notice of such
opt-out (a "Regeneron
Early Opt-Out Notice") to Sanofi. Effective immediately upon the
delivery by Regeneron to Sanofi of a Regeneron Early Opt-Out Notice with respect
to a Licensed Product, (i) such Licensed Product shall automatically constitute
an Early Development Opt-Out Product, (ii) the rights and licenses granted by
Regeneron to Sanofi hereunder with respect to such Early Development Opt-Out
Product shall automatically terminate, (iii) Sanofi and its Affiliates shall
have a worldwide, fully paid-up, royalty-free (other than for amounts payable to
Third Parties for any intellectual property or technology contributed to the
Discovery Program or the Collaboration by Regeneron), exclusive right and
license, with the right to sublicense unless otherwise restricted by any
License, under the Regeneron Intellectual Property existing at the time the
Regeneron Early Opt-Out Notice was delivered to Sanofi, to Develop, Manufacture
and Commercialize in the Field in the Territory (and solely to the extent that
such Regeneron Intellectual Property has, as of the date of the Regeneron Early
Opt-Out Notice, actually been incorporated into such Early Development Opt-Out
Product or otherwise claims or covers its use) the Early Development Opt-Out
Product with respect to which such Regeneron Early Development Opt-Out Notice
was delivered, (iv) Regeneron shall remain responsible for all activities
necessary for the clinical supply at Manufacturing Cost of the Early Development
Opt-Out Product ****************************************, (v) Regeneron shall,
as promptly as reasonably practicable, transfer to Sanofi all clinical
activities related to the Early Development Opt-Out Product, (vi) except as set
forth in this Section 5.6, Regeneron shall have no further rights or obligations
with respect to such Early Development Opt-Out Product, (vii) Sanofi shall be
free to Develop and Commercialize such Early Development Opt-Out Product in the
Field in the Territory free of any obligations to Regeneron hereunder, except
for reimbursing Regeneron for any pass through costs to Third Party licensors of
Regeneron Intellectual Property, to the extent attributable to the Development
or Commercialization of Licensed Products by Sanofi, and (viii)
*********************************************************, neither Regeneron nor
any of its Affiliates may develop or commercialize any Antibody that directly
interacts with the same gene, receptor, ligand or other molecule to which such
Early Development Opt-Out Product binds. Except as provided in this Section 5.6,
a Party's obligations under this Agreement with respect to the Development of a
Licensed Product shall terminate only upon termination of this Agreement with
respect to such Licensed Product or in its entirety in accordance with, and only
to the extent and upon the terms and conditions set forth in, Article
XIX.

     

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    ARTICLE VI
COMMERCIALIZATION

     

              6.1 Commercialization of Licensed Products in the
Field in the Territory.
Subject to the terms of this Agreement, the Parties shall undertake
Commercialization activities with respect to Licensed Products in the Field in
the Territory under the direction and oversight of the JCC. Sanofi shall be the
lead Party with respect to the Commercialization of Licensed Products in the
Field. Sanofi shall use Commercially Reasonable Efforts to Commercialize
Licensed Products in the Field, and carry out the Commercialization activities
in accordance with the applicable Global Commercialization Plan and the
applicable Country/Region Commercialization Plans in a timely manner and conduct
all such activities in compliance with applicable Laws. Except as otherwise
provided in this Agreement, Sanofi shall bear all costs and expenses to
Commercialize the Licensed Products in the Field in the Territory. Sanofi or its
Affiliate shall invoice and book all sales of the Licensed Products in the Field
in the Territory and shall appropriately record all such sales. Sanofi or its
Affiliate shall also be responsible for the distribution of the Licensed
Products in the Field in the Territory and for paying all governmental rebates
which are due or owing with respect to the Licensed Products in the Field in the
Territory. Commencing with the initiation of Phase 3 Trials for a Licensed
Product in the Field in the Territory, the Parties will commence regular ad hoc
discussions concerning the Commercialization strategy for the Licensed Product.

     

              6.2 Global Commercialization
Plan(s). Each Global
Commercialization Plan and all updates and amendments thereto will be consistent
with the principles of the Collaboration Purpose. Each Global Commercialization
Plan shall be prepared by Sanofi (with assistance from Regeneron) at the
direction of the JCC, and submitted to the JCC for review and approval. Once
approved by the JCC, a Global Commercialization Plan will be presented to the
JSC for review and *************************************. Such Global
Commercialization Plan for each subsequent Contract Year shall be updated by the
JCC and approved by the JSC at least one (1) month prior to the end of the then
current Contract Year. The Global Commercialization Plan with respect to each
Licensed Product shall include (with sufficient detail, relative to time
remaining to Anticipated First Commercial Sale, to enable the JCC and JSC to
conduct a meaningful review of such Plan) information and formatting as will be
agreed upon by the JCC, including:

     

    
                (a) the overall global
strategy for Commercializing such Licensed Product in the Field in the
Territory, including target product profiles, branding, positioning, promotional
materials and core messages for such Licensed Product; 

       

                (b)
***********************************;

    

     

    38

     

    

    
    

    
                (c) the related Global Commercialization Budget; 

       

                (d) anticipated launch dates
for such Licensed Product for Major Market Countries; 

       

                (e) market and sales
forecasts for such Licensed Product in the Field in the Territory in a form to
be agreed between the Parties; 

       

                (f) strategies for the
detailing and promotion of such Licensed Product in the Field in the Territory;

       

                (g) anticipated major
advertising, public relations and patient advocacy programs for such Licensed
Product in the Field in the Territory; 

       

                (h) Non-Approval Trials; and 

       

                (i) all other Marketing Guidelines. 

    

     

              6.3 Country/Region Commercialization
Plans. Each Country/Region
Commercialization Plan and all updates and amendments thereto will be consistent
with the principles of the Collaboration Purpose. It is anticipated that each
Country/Region Commercialization Plan for each Licensed Product will be prepared
by Sanofi (with assistance from Regeneron in the U.S. and all
Co-Commercialization Countries), and approved by the JCC, at least
******************************. Such Country/Region Commercialization Plan for
each subsequent Contract Year shall be updated by the applicable Country/Region
Commercialization Committee, and approved by the JCC, at least two (2) months
prior to the end of the then current Contract Year. Each Country/Region Commercialization Plan with
respect to each Licensed Product shall include (with sufficient detail, relative
to time remaining to Anticipated First Commercial Sale, to enable the JCC to
conduct a meaningful review of such Plan) information and formatting as will be
agreed upon by the JCC, including the overall strategy for Commercializing such
Licensed Product, ***************, market and sales forecasts, and estimated FTE
and Shared Commercial Expenses. In those countries where the Parties are
Co-Promoting a Licensed Product, such Country/Region Commercialization Plans
shall include more detailed information on the coordination of detailing and
promotional efforts, including the estimated number of detailing FTEs for each
Party (based on the number and position of Details required to meet the market
and sales forecasts) and the specific allocation of Co-Promotion efforts between
the Parties.

     

    39

     

    

    
    

              6.4 Commercialization Efforts; Sharing of
Commercial Information.

     

    
                (a) Sanofi (through its Affiliates where appropriate) shall use Commercially Reasonable Efforts to
Commercialize Licensed Products in the Field in the Territory in accordance with
the Global Commercialization Plans, the Marketing Guidelines and, as applicable,
the Country/Region Commercialization Plan(s). Without limiting the generality of
the foregoing, (i) Sanofi will, as necessary, build, train and apply a field
force necessary to Commercialize the Licensed Products in the Field in
accordance with the applicable Global Commercialization Plans and Country/Region
Commercialization Plans, (ii) Sanofi's, and in the Co-Commercialization
Countries each Party's, sales representatives shall provide the FTE effort and
detail the Licensed Products in the Field in accordance with the approved
Country/Region Commercialization Plan (if applicable), Global Commercialization
Plan(s) and all applicable Laws. 

       

                (b) Sanofi will provide
Regeneron with full access to material information directly relating to the
Commercialization of each Licensed Product in the Field, including, without
limitation, information relating to anticipated launch dates, key market
metrics, market research, and sales. Without limiting the foregoing, beginning
in the Quarter of the First Commercial Sale in each Major Market Country, Sanofi
will provide Regeneron, and with respect to each Co-Commercialization Country,
Regeneron will provide Sanofi, on a quarterly basis, with reports of the
activity within its field force in each such Major Market Country, which will
include reasonable data from reports created by Sanofi or Regeneron for its
internal management purposes. 

       

                (c) Each Party shall, on a
periodic and reasonably current basis, keep the other Party informed regarding
major market developments, acceptance of the Licensed Products in the Field,
Licensed Product quality complaints and similar information. 

       

                (d) No Party may initiate or
support any Non-Approval Trial for a Licensed Product in the Field in the
Territory without the prior approval of the JDC.

    

     

              6.5 Co-Commercialization of Licensed
Products. 

     

    
                (a) Exercise of Co-Promote Option by
Regeneron. In the event
that Regeneron desires to Co-Promote a Licensed Product in a particular country,
Regeneron shall notify Sanofi of (i) its preliminary indication of intent
regarding such Co-Promotion of such Licensed Product at least
******************************** and (ii) its final decision regarding whether
to Co-Promote such Licensed Product in such country
************************************************. If Regeneron does not timely
notify Sanofi of its preliminary indication or of its final decision within the
periods set forth in clause (i) or (ii) above, as applicable, Regeneron shall
not be entitled to exercise its option to Co-Promote such Licensed Product in
such country until on or after the
***********************************************. 

    

     

    40

     

    

    
    

    
                (b) Co-Commercialization. Sanofi and Regeneron (through their
respective Affiliates where appropriate) shall Co-Commercialize Licensed
Products under the applicable Product Trademarks in each Co-Commercialization
Country in accordance with the then-current and applicable Country/Region
Commercialization Plan. Each Party shall use, or shall cause its local
Affiliates to use, Commercially Reasonable Efforts to Co-Commercialize the
Licensed Products in the Co-Commercialization Countries, and carry out the
activities assigned to it in the applicable Country/Region Commercialization
Plan. Each Party shall ensure that its Co-Commercialization activities conform
with the parameters in the applicable approved Country/Region Commercialization
Plan and the applicable Global Commercialization Plan.

       

                (c) Decision to Discontinue
Co-Commercialization. In
the event that Regeneron decides it no longer wishes to Co-Commercialize a
Licensed Product in a particular Co-Commercialization Country or does not wish
to maintain its minimum sales force FTE requirement for Co-Commercialization of
such Licensed Product in such Co-Commercialization Country, provided that
Regeneron has Co-Commercialized Licensed Product and maintained its minimum
sales force FTE requirement for ************** in such Co-Commercialization
Country from the date it commences Co-Promoting in such Co-Commercialization
Country, Regeneron must give the JCC and Sanofi ***************** prior written
notice of such decision. At the end of such *******************, Regeneron shall
cease all Co-Commercialization activities with respect to such Licensed Product
in such Co-Commercialization Country.
*******************************************. 

       

                (d) Field Force Coordination. The JCC or the applicable Committee shall
coordinate the Co-Promotion of each Licensed Product by Sanofi, Regeneron, their
respective local Affiliates and their respective sales representatives in each
Co-Commercialization Country. The Parties will cooperate in the conduct of such
activities with respect to scheduling, geographical allocation, and Professional
or other customer targeting in order to optimize profits under the applicable
Country/Region Commercialization Plan. Without limiting the generality of the
foregoing, in each Co-Commercialization Country the Parties will share and, to
the extent appropriate, cooperate to implement consistent policies and
procedures with respect to the manner in which details and other sales visits
are conducted. 

       

                (e) Co-Commercialization FTE
Efforts. 

       

      
                  (i) FTE Efforts. Upon the exercise of its election pursuant
to Section 6.5(a) to Co-Promote in a country, Regeneron will provide to Sanofi a
binding notice of the FTE effort that Regeneron commits to deliver in
Co-Promoting such Licensed Product in such country during the first (1st)
Contract Year for which Regeneron exercised its right to Co-Promote (the
"Regeneron Commitment Level"). Subject to the provisions of Section
6.4(e)(ii), if Regeneron elects to Co-Promote a Licensed Product in a country,
in no event shall the Regeneron Commitment Level be less than ****************
of the total anticipated FTE effort by both Parties (taken together) in
Co-Promoting such Licensed Product in such Co-Commercialization Country, unless
otherwise agreed by the Parties. Such FTE effort shall be based upon the
forecasted number and position of Details required to meet the market and sales
forecasts in such Co-Commercialization Country, and their conversion (by the JCC
or applicable Country/Region Commercialization Committee) into the equivalent
number of Detailing FTEs according to applicable weighting factors, based upon
the sales force and marketing practices in such Co-Commercialization Country. In
no event shall the Regeneron Commitment Level in Co-Promoting such Licensed
Product in such Co-Commercialization Country exceed **************** of the
anticipated total FTE effort by both Parties in Co-Promoting such Licensed
Product in such Co-Commercialization Country or such other maximum percentage
agreed by the Parties (the "Maximum Regeneron Effort"). Regeneron's binding notice referred to above
in this Section 4(e)(i) shall be accompanied by a plan (which shall be developed
by Regeneron in cooperation with Sanofi and shall be intended to coordinate and
integrate the Parties' respective FTE efforts and detailing activities) for
ensuring that Regeneron will have in place a field force of qualified sales
representatives to satisfy the Regeneron Commitment Level. In each
Co-Commercialization Country, Sanofi shall perform the anticipated total FTE
effort above the Regeneron Commitment Level.

      

    

     

    41

     

    

    
    

    
      
                  (ii) Ophthalmology. In the event that a Licensed Product
receives Marketing Approval for an Indication related to ophthalmology, then, at
Regeneron's option, Regeneron shall have the lead in the promotion of such
Licensed Product in such Indication, provided, however, that the limitations set
forth in Section 6.5(e)(i) shall apply.

      

       

                (f) Training. The Parties will coordinate sales force
training efforts in Co-Commercialization Countries and will share training
materials (and conduct joint training, where appropriate) to facilitate joint
sales force training efforts. 

       

                (g) Samples. Sanofi shall provide Regeneron with Licensed
Product samples for use in Co-Commercialization Countries as required in the
applicable Country/Region Commercialization Plan. Sanofi and Regeneron (and
their respective Affiliates) shall use samples strictly in accordance with the
then-applicable approved Country/Region Commercialization Plan and shall store
and distribute samples in compliance with applicable Laws. Each Party (and its
local Affiliates) will maintain those records required by all applicable Laws
and shall allow representatives of the other Party to inspect such records and
storage facilities for the Licensed Product samples on
request.

    

     

              6.6 Licensed Product Pricing and
Pricing Approvals in the Territory. Without limitation of the
responsibility and authority of the Committees with respect to pricing matters
as provided herein*****************************; provided that all such pricing
decisions (including rebates or discounts) shall be made in a manner (a)
intended to optimize the economic value of the Licensed Products in the
Territory, (b) consistent with the Collaboration Purpose and (c) in conformance
with the Marketing Guidelines******************************. 

     

    42

     

    

    
    

              6.7 Sales and Licensed Product Distribution in the
Territory; Other Responsibilities. 

     

    
                (a) Sanofi (or its Affiliate)
shall invoice and book, and appropriately record, all sales of the Licensed
Products in the Field in the Territory. Sanofi (or its Affiliate) also shall be
responsible for (i) the distribution of Licensed Products in the Field in the
Territory and for paying all governmental rebates which are due and owing with
respect to the Licensed Products in the Field in the Territory, (ii) handling
all returns of Licensed Product sold under this Agreement and (iii) handling all
aspects of ordering, processing, invoicing, collection, distribution and
receivables with respect to Licensed Products in the Field in the Territory.

       

                (b) Sanofi (through its local
Affiliates where appropriate), and with respect to the Co-Commercialization
Countries, Regeneron (through its local Affiliates where appropriate), shall
maintain records relating to its sales representative FTEs for the Licensed
Products in the Field in the countries in a manner sufficient to permit the
determination of Sales Force Cost and Medical Post-Approval Cost and the
incentive compensation requirements set forth in the Marketing Guidelines.

    

     

              6.8 Contract Sales Force. Each Party shall be entitled to engage a
Contract Sales Force for up to ************* of such Party's Sales Force
utilized for any Licensed Product to discharge its annual FTE effort with
respect to Commercialization of such Licensed Product, provided that in the
event that Regeneron discontinues Co-Commercialization in a particular
Co-Commercialization pursuant to Section 6.5(c), then Sanofi shall be entitled
to engage a Contract Sales Force for more than *************** for that
Co-Commercialization Country. If a Party (or its local Affiliate) retains a
Contract Sales Force, that Party (or its local Affiliate) will be responsible
for (i) all costs associated with retaining such Contract Sales Force above
approved Sales Force Costs included in the applicable Country/Region
Commercialization Budget and for the Contract Sales Force's compliance with this
Agreement, including, without limitation, the training and monitoring of such
Contract Sales Force and ensuring compliance with all applicable Laws, and (ii)
ensuring that sales representatives in such Contract Sales Force have minimum
skill levels customary for sales representatives in major pharmaceutical
companies in such country in the relevant therapeutic area.

     

              6.9 Promotional Materials. 

     

    
                (a) Except as provided in and
subject to Section 6.9(b): Sanofi will be responsible, consistent with the
Marketing Guidelines, the Global Commercialization Plan and the Country/Region
Commercialization Plans (as applicable) and the decisions of the JCC with
respect to Promotional Materials as contemplated by Section 3.4(b)(vi), for the
creation, preparation, production and reproduction of all Promotional Materials
and for filing, as appropriate, all Promotional Materials with all Regulatory
Authorities in the Territory, except where Regeneron shall perform such
responsibilities as the Lead Regulatory Party. Upon request, Regeneron will have
the right to review and comment on all major Promotional Materials for use in
any country in the Territory prior to their distribution by Sanofi for use in
the Territory.

    

     

    43

     

    

    
    

    
                (b) The Parties and their
Affiliates shall only use the Promotional Materials and only conduct marketing
and promotional activities for the Licensed Products which, in each case, are
approved by the JCC or the applicable Country/Region Commercialization Committee
if so delegated by the JCC for the applicable Major Market Country. Sanofi shall
ensure that Regeneron's sales representatives are provided with reasonable
quantities of Promotional Materials for use in a Co-Commercialization Country
consistent with the Regeneron Commitment Level for such Co-Commercialization
Country in accordance with the applicable approved Country/Region
Commercialization Plan. All Promotional Materials generated for a
Co-Commercialization Country shall be maintained in confidence and shall not be
disclosed or distributed to Third Parties, until such time as they have been
reviewed and approved as set forth in this Section. 

       

                (c) Sanofi shall own all
rights to all Promotional Materials, including all copyrights thereto, in the
Major Market Countries.

    

     

              6.10 Promotional
Claims/Compliance. Neither
Party nor any of its Affiliates shall make any medical or promotional claims for
any Licensed Product in the Field other than as permitted by applicable Laws.
When distributing information related to any Licensed Product or its use in the
Field in the Territory (including information contained in scientific articles,
reference publications and publicly available healthcare economic information),
each Party and its Affiliates shall comply with all applicable Laws and any
guidelines established by the pharmaceutical industry in the applicable country.

     

              6.11 Restriction on Bundling in the
Territory. If Sanofi or
its Affiliates or Sublicensees sell a Licensed Product in the Field in the
Territory to a customer who also purchases other products or services from any
such entity, Sanofi agrees not to, and to require its Affiliates and
Sublicensees not to, bundle or include any Licensed Product as part of any
multiple product offering or discount or price the Licensed Products in a manner
that (a) is reasonably likely to disadvantage a Licensed Product in order to
benefit sales or prices of other products offered for sale by a Party or its
Affiliates to such customer, (b) is inconsistent with the Collaboration Purpose
or (c) would result in pricing and discounting inconsistent with the applicable
Marketing Guidelines. 

     

              6.12 Inventory Management. Sanofi shall use Commercially Reasonable
Efforts to manage Licensed Product inventory on hand at wholesalers and
Sublicensees so as to maintain levels of inventory appropriate for expected
demand and to avoid taking action that would result in unusual levels of
inventory fluctuation. 

     

              6.13 Medical and Consumer
Inquiries. The JCC shall
establish guidelines to handle medical questions or inquiries from consumers
relative to Licensed Products. 

     

              6.14 Market Exclusivity
Extensions. Each Party
shall use Commercially Reasonable Efforts to maintain, and, to the extent
available, legally extend, the period of time during which, in any country in
the Territory, (a) a Party(ies) has the exclusive legal right, whether by means
of a Patent Right or through other rights granted by a Governmental Authority in
such country, to Commercialize a Licensed Product in the Field in such country
and (b) no generic equivalent of a Licensed Product in the Field may be marketed
in such country.

     

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              6.15 Post Marketing Clinical
Trials. Subject to the
provision of this Agreement, the Parties shall comply with any clinical trials
obligations with respect to a Marketing Approval with respect to any Licensed
Product use in the Field in any country in the Territory, imposed by applicable
Law, pursuant to the Approvals or required by a Regulatory Authority.

     

    ARTICLE VII
CLINICAL AND REGULATORY AFFAIRS

     

              7.1 Ownership of Approvals and Registration
Filings. 

     

    
                (a) Unless otherwise agreed
to by the Parties, the Post-POC Principal Party shall be the Lead Regulatory
Party and shall own (i) all Approvals with respect to Licensed Product in the
Territory and (ii) the IND for Licensed Products during such time as it is the
Post-POC Principal Party and shall have the rights and obligations set forth in
Sections 7.2 to 7.4 (inclusive) with respect thereto.
*****************************. 

       

                (b) The Lead Regulatory Party
shall license, transfer, provide a letter of reference with respect to, or take
other action necessary to make available the relevant Registration Filings and
Approvals to and for the benefit of the other Party. 

       

                (c) The non-Lead Regulatory
Party shall provide such assistance with respect to regulatory matters as is
reasonably requested by the Lead Regulatory Party and consistent with the terms
of this Agreement.

    

     

              7.2 Regulatory Coordination.

     

    
                (a) The Lead Regulatory Party
shall oversee, monitor and coordinate applicable regulatory actions,
communications and filings with and submissions (including supplements and
amendments thereto) to each applicable Regulatory Authority with respect to each
Licensed Product in the Field in each jurisdiction as to which it is the Lead
Regulatory Party; provided that it shall adhere to the obligations in this
Article VII. Without limiting the foregoing, the Lead Regulatory Party will be
responsible for, and will use Commercially Reasonable Efforts in applying for,
obtaining and maintaining the applicable Approval or other Registration Filing
for each Licensed Product in the Field for which it has responsibility as the
Lead Regulatory Party. To the extent applicable, the Lead Regulatory Party shall
perform all such activities in accordance with the Plans and all applicable
Laws. 

       

                (b) The Parties shall
establish procedures, through the JDC or the JCC, to ensure that the Parties
exchange on a timely basis all necessary information to enable the other Party
and its licensees, as applicable, (i) to comply with its regulatory obligations
in connection with the Development, Manufacture and/or Commercialization of the
Licensed Products in the Field, including, without limitation, filing updates or
supplements with Regulatory Authorities, pharmacovigilance filings,
manufacturing supplements and
investigator notifications to Regulatory Authorities and (ii) to comply with
Laws in connection with the Development, Manufacture and/or Commercialization of
the Licensed Products in the Field anywhere in the Territory. The Parties shall
provide to each other prompt written notice of any Approval of a Licensed
Product in the Field anywhere in the world. The Parties shall work together
cooperatively through the JDC in the preparation of regulatory strategies and
with respect to all material regulatory actions, communications and Regulatory
Filings for Licensed Products in the Field in the Territory.

    

     

    45

     

    

    
    

              (c) The Lead Regulatory Party shall use Commercially Reasonable Efforts to
provide the other Party as promptly as practicable with written notice and
copies of any material (i) draft filings with, (ii) submissions to and (iii)
correspondence (including Approvals) with, Regulatory Authorities pertaining to
the Development and/or Commercialization of a Licensed Product in the Field
under the Plans, and shall use reasonable efforts to afford the other Party's
representatives an opportunity to actively participate in the drafting and
review of such material filings and submissions (including, without limitation,
all annual and periodic safety reports for Licensed Products in the Field), and
consistent with applicable laws, to have up to two (2) representatives from the
other Party attend and actively participate in all material, pre-scheduled
meetings, telephone conferences and/or discussions with Regulatory Authorities
to the extent such material meetings, telephone conferences and/or discussions
pertain to the Development and/or Commercialization of any Licensed Product in
the Field. Without limiting the foregoing, the Lead Regulatory Party shall use
Commercially Reasonable Efforts to provide the other Party on a timely basis
with all material information, data and materials reasonably necessary for the
other Party to participate in the preparation of the material filings and
submissions referred to in this paragraph (c), said items to be provided to the
other Party in a timely manner. The Parties will discuss in good faith any
disputes on the contents of filings or submissions referred to in this paragraph
(c) to the Regulatory Authorities and disputes shall be submitted to the JDC for
timely resolution. 

     

              (d) For each Licensed Product, the JDC shall develop and the JSC shall
approve proposed target Licensed Product labeling ("Target Labeling") for use in the Territory. 

     

              7.3 Regulatory Events. Each Party shall keep the other Party
informed, commencing within forty-eight (48) hours after notification (or other
time period specified below), of any action by, or notification or other
information which it receives (directly or indirectly) from, any Regulatory
Authority, Third Party or other Governmental Authority, which: 

     

              (a) raises any material concerns regarding the safety or efficacy of any
Licensed Product in the Field; 

     

              (b) indicates or suggests a potential investigation or formal inquiry by any
Regulatory Authority in connection with the Development, Manufacture or
Commercialization of a Licensed Product in the Field under the Plans; provided,
however, that each Party shall inform the other Party of the foregoing no later
than twenty-four (24) hours after receipt of a notification referred to in this
clause (b); or 

     

    46 

     

    

    
    

              (c) is reasonably likely to lead to a recall or market withdrawal of any
Licensed Product in the Field anywhere in the Territory. 

     

         Information that shall be disclosed pursuant to this Section 7.3 shall
include, but not be limited to the following matters with respect to Licensed
Products: 

     

              (i) Governmental Authority inspections of Manufacturing, Development,
distribution or other facilities;

     

              (ii) inquiries by Regulatory Authorities or other Governmental Authorities
concerning clinical investigation activities (including inquiries of
investigators, clinical research organizations and other related parties) or
pharmacovigilance activities, in each case, to the extent involving matters
described in clauses (a), (b) or (c) of this Section 7.3;

     

              (iii) receipt of a warning letter issued by a Regulatory
Authority;

     

              (iv) an initiation of any Regulatory Authority or other Governmental Authority
investigation, detention, seizure or injunction; and

     

              (v) receipt of product complaints concerning actual or suspected Licensed
Product tampering, contamination, or mix-up (e.g., wrong ingredients). 

     

              7.4 Pharmacovigilance and Product
Complaints. While the Lead
Regulatory Party shall be responsible for managing pharmacovigilance and product
complaints and for formulating and implementing any related strategies, both
Parties will cooperate with each other in order to fulfill all regulatory
requirements concerning pharmacovigilence and risk management plans and product
complaint reporting in all countries in which any Licensed Product is being
developed, manufactured, or commercialized anywhere in the Territory. Without
limitation to the foregoing, the Parties shall execute a Safety Data Exchange
Agreement ("SDEA") setting forth the specific procedures to be
used by the Parties to coordinate the investigation and exchange of reports of
adverse events/adverse drug reactions and Licensed Product complaints to ensure
timely communication to Regulatory Authorities and compliance with Laws.

     

              7.5 Regulatory Inspection or
Audit. If a Regulatory
Authority desires to conduct an inspection or audit of a Party with regard to a
Licensed Product in the Field, each Party agrees to cooperate with the other and
the Regulatory Authority during such inspection or audit, including by allowing,
to the extent practicable, a representative of the other Party to be present
during the applicable portions of such inspection or audit to the extent it
relates to the Development, Manufacture or Commercialization of a Licensed
Product for use in the Field under this Agreement. Following receipt of the
inspection or audit observations of the Regulatory Authority (a copy of which the receiving Party will promptly
provide to the other Party), the Party in receipt of the observations will
prepare any appropriate responses; provided that the other Party, to the extent
practicable, shall have the right to review and comment on such responses to the
extent they cover or may be reasonably expected to adversely impact the Licensed
Products in the Field in the Territory, and the Party that received the
observations shall consider in good faith the comments made by such other Party.
In the event the Parties disagree concerning the form or content of a response,
the Party that received the observations will decide the appropriate form and
content of the response. Without limiting the foregoing, each Party (and its
Third Party subcontractors) shall notify the other Party within forty-eight (48)
hours of receipt of a notification from a Regulatory Authority of the intention
of such Regulatory Authority to audit or inspect facilities used or proposed to
be used for the Manufacture of Licensed Products for use in the Field under this
Agreement; provided that such notification shall be given no later than
twenty-four (24) hours prior to any such Regulatory Authority audit or
inspection.

     

    47 

     

    

    
    

              7.6 Recalls and Other Corrective
Actions. Decisions with
respect to any recall, market withdrawal or other corrective action related to
any Licensed Product in the Field in the Territory shall be made only upon
mutual agreement of the Parties, which agreement shall not be unreasonably
withheld or delayed; provided, however, that nothing herein shall prohibit
either Party from initiating or conducting any recall or other corrective action
mandated by a Governmental Authority or Law. The Party that determines that a
recall or market withdrawal of a Licensed Product in the Field in the Territory
may be required shall, within twenty-four (24) hours, notify the other Party
and, without limitation of and subject to the proviso in the immediately
preceding sentence, the Parties shall decide whether such a recall or market
withdrawal is required. The Parties shall cooperate with respect to any actions
taken or public statements made in connection with any such recall or market
withdrawal. Expenses associated with such recalls will be treated as Other
Shared Expenses. 

     

    ARTICLE VIII 
MANUFACTURING AND SUPPLY 

     

              8.1 Manufacture and Supply of Clinical Supply
Requirements of Formulated Bulk Product. Until such time as Commercial Supply
Requirements are being Manufactured, Regeneron will use Commercially Reasonable
Efforts to provide an adequate and timely supply of Formulated Bulk Product for
Clinical Supply Requirements of Licensed Products in the Field in the Territory
in accordance with the Manufacturing Plan. Regeneron may use its Manufacturing facilities or, subject to
Sanofi’s prior written approval, such approval not to be unreasonably withheld
or delayed, Sanofi or Third Parties to Manufacture such Formulated Bulk Product.
If an entity other than Regeneron is to be used to Manufacture Formulated Bulk
Product for Clinical Supply Requirements, preference shall be given to Sanofi or
an Affiliate of Sanofi that is qualified to Manufacture the applicable Licensed
Product in accordance with applicable Good Practices and where the estimated
Manufacturing Cost is comparable to that of Third Party Manufacturers. The
Formulated Bulk Product Manufactured by or on behalf of Regeneron for Clinical
Supply Requirements will be billed to Sanofi by Regeneron at the Manufacturing
Cost per Part I of Schedule 1 as a Development Cost. To the extent that
Regeneron maintains manufacturing
capacity available for the Manufacture of Clinical Supply Requirements, the cost
of maintaining such capacity shall be included as a Development Cost to the
extent it is not included as a Manufacturing Cost. For the avoidance of doubt,
nothing in this Section 8.1 shall require Regeneron to expand its manufacturing
capacity or use any manufacturing capacity acquired or constructed by Regeneron
in the future to satisfy its obligations under this Section 8.1 other than those
Regeneron manufacturing facilities in Rensselaer, New York that will be
constructed pursuant to the Expansion Plan annexed to the Discovery Agreement.
**********************************************Sanofi will make capacity at this
facility available to provide Formulated Bulk Product for Phase 3 Trials of
Licensed Products on Regeneron’s behalf as set forth in the Manufacturing Plan
in the event that the requirements for Formulated Bulk Product for Phase 3
Trials exceed Regeneron’s capacity at its Manufacturing facilities.

     

    48 

     

    

    
    

              8.2 Finished Product Supply of Clinical Supply
Requirements. Regeneron
will timely identify, and enter into an agreement with, a Third Party or Third
Parties or Sanofi (or use its own facilities, if Regeneron has such
capabilities) to perform the filling, packaging, labeling and testing of the
Formulated Bulk Product and supply Finished Product for Clinical Supply
Requirements for Licensed Products for use under this Agreement. If an entity
other than Regeneron is to be used to perform filling, packaging, labeling or
testing services related to Finished Product for Clinical Supply Requirements,
preference shall be given to Sanofi or an Affiliate of Sanofi that is qualified
to perform such services in accordance with applicable Good Practices and where
the estimated Manufacturing Cost is comparable to that of Third Parties. Such
Finished Product for Clinical Supply Requirements Manufactured on behalf of
Regeneron will be billed to Sanofi at the Manufacturing Cost as a Development
Cost, in accordance with Part I of Schedule 1. 

     

              8.3 Manufacture and Supply of Commercial Supply
Requirements.

     

              (a) The Parties, through the JMC and JSC, will determine whether a Party, or
a Third Party on behalf of a Party, will be responsible for Manufacturing and
supplying Commercial Supply Requirements of Formulated Bulk Product and/or
Finished Product for each Licensed Product for use under this Agreement. The JMC
shall use all reasonable efforts to make such determination no later than three
(3) years prior to the Anticipated First Commercial Sale of each Licensed
Product. ******************************************************. Such a notice
(a "Manufacturing
Notice") shall be irrevocable and shall be treated as a firm commitment
to supply such Formulated Bulk Product or Finished Product, as the case may be.
Preference will be given to having a Party or both Parties, rather than Third
Parties, Manufacture and supply Commercial Supply Requirements, provided that
the Party is qualified to Manufacture such Licensed Product in accordance with
applicable Good Practices and on terms mutually acceptable to the Parties. If
both Parties desire to Manufacture and supply such Commercial Supply
Requirements, **************************************. If one Party desires to
Manufacture and supply ******************************************. If the
Parties can not agree on terms under which either or both Parties will
Manufacture and supply Commercial Supply Requirements of a Licensed Product, the
JMC shall arrange for a Third Party to Manufacture and supply such Commercial
Supply Requirements.

     

              (b) Once Manufacture of Commercial Supply Requirements of a Licensed Product
begins, or is scheduled to begin, Manufacture of Clinical Supply Requirements of
such Licensed Product shall be coordinated with Manufacture of Commercial Supply
Requirements of such Licensed Product. Formulated Bulk Product and/or Finished
Product Manufactured by or on behalf of a Party for Commercial Supply
Requirements, and for Clinical Supply Requirements that are Manufactured in
coordination with the Commercial Supply Requirements, will be billed at the
Manufacturing Cost described in Part II
of Schedule 1 as a Commercial Supply Cost and Clinical Supply Cost,
respectively. If a Party has commercial scale capacity available in anticipation
of beginning to Manufacture Commercial Supply Requirements, the JMC shall decide
if such Party shall Manufacture any Clinical Supply Requirements even before it
begins to Manufacture Commercial Supply Requirements.

     

    49 

     

    

    
    

              (c) Any Third Party manufacturer of Commercial Supply Requirements or Clinical Supply Requirements
will be required to enter into a separate confidentiality agreement with
Regeneron prior to the transfer of the manufacturing operations from Regeneron
to such Third Party. All of Regeneron's costs and expenses associated with the
transfer of the manufacturing operations and related Know-How to the Third Party
manufacturer (or Sanofi, to the extent that Sanofi manufactures all or part of
the Commercial Supply Requirements or Clinical Supply Requirements) will be
billed as a Development Cost.

     

              8.4 Supply Agreement. The Parties shall enter into one or more
clinical supply agreements with respect to the quality assurance/quality
control, forecasting, ordering and delivery of Clinical Supply Requirements,
which shall contain terms consistent with this Agreement. At least
****************************** of a Licensed Product, the Parties shall enter
into separate commercial supply agreements with respect to the quality
assurance/quality control, forecasting, ordering and delivery of Clinical Supply
Requirements and Commercial Supply Requirements after the First Commercial Sale,
which shall contain terms consistent with this Agreement. Each supply agreement
will include as an annex thereto a customary quality agreement containing terms
and conditions regarding quality assurance and Good Practices and provide for
terms for forecasting, ordering, delivery, payment and supply consistent with
the terms of this Agreement. 

     

              8.5 Process Development and Manufacturing
Plans. The Parties,
through the JMC, will develop and update as necessary, for each Licensed
Product, a Manufacturing Plan. The JMC shall be responsible for deciding on
process and technology selection, on process improvements and all related
process development activities which impact manufacturing. The JMC shall also be
responsible for all decisions relating to Manufacturing Formulated Bulk Product
for Clinical Supply Requirements of Licensed Products. Each Manufacturing Plan
shall set forth the supply requirements of a Licensed Product over an ensuing
period of ************************. The Manufacturing Plan will include
arrangements for the Manufacture of back-up Formulated Bulk Product for Licensed
Product requirements at a Party or a Third Party back-up Manufacturing facility.
The Manufacturing Plan (including each annual update thereto) shall be prepared
by the JMC and approved by the JSC at least two (2) months prior to the end of
the then current Contract Year, except that the initial Manufacturing Plan
covering at least initial expected Clinical Supply Requirements for a Licensed
Product, to the extent not included in the Initial Development Plan, shall be
approved by the JSC within the initial Global Development Plan. The Parties
shall design Manufacturing Plans to ensure an adequate supply of Licensed
Product and shall use Commercially Reasonable Efforts to perform their
responsibilities in accordance with the approved Manufacturing Plans.

     

    50 

     

    

    
    

              8.6 Manufacturing Shortfall. Each Party is required to provide prompt
written notice to the other Party if it reasonably determines that it will not,
despite its using Commercially Reasonable Efforts, be able to supply the agreed
upon demand forecast for the Licensed Products set forth in the Manufacturing
Plan. Upon such notification, the matter will be referred to the JMC and JSC to
determine what, if any (and identify and establish, as quickly as possible, if
applicable) alternative supply source of Licensed Product (including the other
Party) should be utilized. 

     

              8.7 Manufacturing Compliance. Each Party will use diligent efforts to
Manufacture the Formulated Bulk Product and Finished Product supplied under this
Article VIII or, as applicable, to ensure that the same is Manufactured by Third
Parties in conformity with Good Practices and applicable Laws. Each Party will
timely notify and seek the approval of the other Party, which approval shall not
be unreasonably withheld or delayed, for any Manufacturing changes for the
Formulated Bulk Product or Finished Product that are reasonably likely to have
an adverse impact on (a) the quality of the Licensed Products supplied under
this Agreement or (b) the regulatory status of the Licensed Products in the
Territory, including requirements to support or maintain any Approvals. Each
Party shall have the right to conduct inspections and audits of the other
Party's facilities involved in the Manufacture of Licensed Products in the Field
pursuant to this Agreement at reasonable times and on reasonable prior notice on
terms to be agreed upon by the Parties. Moreover, each Party will use diligent
efforts to negotiate agreements that would allow the other Party to audit the
facilities of Third Party contractors (including Sanofi, if applicable) involved
in the Manufacture of Licensed Products for use in the Field under this
Agreement. 

     

    ARTICLE IX
PERIODIC REPORTS; PAYMENTS

     

              9.1 Development Costs. Sanofi shall be responsible for paying one
hundred percent (100%) of the total Development Costs for each Licensed Product
incurred by or on behalf of Sanofi, Regeneron and their respective Affiliates,
except that Shared Phase 3 Trial Costs will be shared eighty percent (80%) by
Sanofi and twenty percent (20%) by Regeneron. The Parties acknowledge that
payments made by Sanofi pursuant to this Section 9.1 are being
made as
research and development expenses, as defined in Section 41 of the US Internal
Revenue Code, and agree that any and all credits or deductions to which either
Party may be entitled on account of research performed pursuant to such payments
shall be allocated to Sanofi to the extent of such payments.

     

              9.2 Milestone Payments. In addition to the other payments
contemplated herein, Sanofi shall be obligated to pay the non-refundable,
non-creditable milestone payments listed in Schedule 3 to Regeneron upon the
occurrence of the applicable milestone event. Sanofi shall have thirty (30)
Business Days after the achievement of any such milestones to pay the
corresponding amount to Regeneron, in each case, which shall not be reduced by
any withholding or similar taxes. 

     

              9.3 Royalties. Any royalty amounts payable pursuant to
Section 2.6(d) and 5.6 of this Agreement shall be paid to the applicable Party
for the period of time, as determined on an Opt-Out Product-by-Opt-Out Product
and country-by-country basis, commencing on the first commercial sale of such
Opt-Out Product and ************************ (the "Royalty Term"). During the Royalty Term, the paying Party
shall deliver to the other Party with each royalty payment a report detailing in
reasonable detail the information necessary to calculate the royalty payments
due under this Section 9.3 for such calendar quarter, including the following
information, specified on an Opt-Out Product-by-Opt-Out Product and
country-by-country basis: (a) total gross invoiced amount from sales of each
such Opt-Out Product by the paying Party, its Affiliates and sublicensees; (b)
all relevant deductions from gross invoiced amounts to calculate Net Sales; (c)
Net Sales; and (d) royalties payable.

     

    51 

     

    

    
    

              9.4 Sharing of Profits from Licensed
Products. Commencing on
the Effective Date and continuing during the Term, the Parties shall share the
U.S. Profit Split in the United States, and (ii) the Rest of World Profit Split
in the Rest of World Countries, in each case, as described in Schedule
2.

     

              9.5 Periodic Reports. Sanofi and Regeneron shall each prepare and
deliver to the other Party the periodic reports specified below: 

     

              (a) Each Party shall deliver electronically the reports required to be
delivered by it pursuant to Section 5.4;

     

              (b) Within twenty (20) days following the end of each month, commencing with
the month in which First Commercial Sale occurs, Sanofi shall deliver
electronically to Regeneron a monthly detailed Net Sales report with monthly and
year-to-date sales for each Licensed Product in the Field in the Territory by
country in United States Dollars;

     

              (c) Within forty-five (45) days following the end of each Quarter, commencing
with the Quarter in which First Commercial Sale occurs, Sanofi shall deliver
electronically to Regeneron a written report setting forth, on a
country-by-country basis in the Territory for such Quarter (i) the Net Sales of
each Licensed Product in local currency and in United States Dollars, (ii)
Licensed Product quantities sold in the Field by dosage form and unit size and
(iii) gross Licensed Product sales in the Field and an accounting of the
deductions from gross sales permitted by the definition of Net
Sales;

     

              (d) Within forty-five (45) days following the end of each Quarter, each Party
that has incurred any Other Shared Expenses or Shared Commercial Expenses in
that Quarter shall deliver electronically to the other Party a written report
setting forth in reasonable detail the Other Shared Expenses and/or Shared
Commercial Expenses incurred by such Party in such Quarter on a
country-by-country and Licensed Product-by-Licensed Product basis, including
whether any such expenses are also included in the reports delivered pursuant to
clause (e) below;

     

              (e) Within forty-five (45) days after the end of each Quarter, commencing
with the Quarter in which First Commercial Sale in a Reporting Country/Region
occurs (or such earlier agreed upon calendar Quarter, if appropriate), Sanofi
shall provide to Regeneron, in electronic form, for each Reporting
Country/Region, and Regeneron shall provide to Sanofi, in electronic form, for
each Co-Commercialization Country, a report summarizing in reasonable detail the
marketing, detailing, selling and promotional activities undertaken by a Party
(or its Affiliates) during the previous Quarter in such Reporting/Country Region
and/or Co-Commercialization Country; and 

     

    52 

     

    

    
    

              (f) Within sixty (60) days following the end of each Quarter, Sanofi shall
deliver electronically to Regeneron a Consolidated Payment Report in respect of
such Quarter, combining the information reported by each Party pursuant to this
Article IX and showing its calculations in accordance with Schedule 2 of the
amount of any payments to be made by the Parties hereunder for such Quarterly
period as contemplated by Section 9.5 (including, as applicable, showing the
calculation of the U.S. Profit Split and Rest of World Profit Split) and, if
applicable, providing for the netting of such payments. 

     

         All reports referred to in this Section 9.5 shall be in such form, format
and level of detail as may be approved by the JFC. Unless otherwise agreed by
the JCC, the financial data in the reports will include calculations in local
currency and United States Dollars.

     

              9.6 Funds Flow. The Parties shall make Quarterly True-Up
payments as set forth in Schedule 2. If Sanofi is the Party owing the Quarterly
True-Up payment based on the calculations in the applicable Consolidated Payment
Report, it shall, subject to Section 9.12, make such payment to Regeneron within
fifteen (15) days after its delivery to Regeneron of such Consolidated Payment
Report. If Regeneron is the Party owing the Quarterly True-Up payment based on
the calculations in the applicable Consolidated Payment Report, it shall,
subject to Section 9.12, make such payment to Sanofi within fifteen (15) days
after its receipt of such Consolidated Payment Report from Sanofi.
Notwithstanding the foregoing, no later than fifty-five (55) days after the end
of each Quarter, Sanofi shall pay Regeneron fifty percent (50%) of the amount of
royalties or other amounts payable under any License (to the extent attributable
to the Manufacture, Development and/or Commercialization of Licensed Products
under the Plans for the Territory) to which Regeneron is a party on account of
the Commercialization of Licensed Products in the Field in the Territory and
provide such supporting documentation required by such License, as the case may
be.

     

              9.7 Invoices and Documentation. The JFC shall approve the form of any
necessary documentation relating to any payments hereunder so as to afford the
Parties appropriate accounting treatment in relation to any of the transactions
or payments contemplated hereunder.

     

              9.8 Payment Method and Currency. All payments under this Agreement shall be
made by bank wire transfer in immediately available funds to an account
designated by the Party to which such payments are due. All sums due under this
Agreement shall be payable in United States Dollars. In those cases where the
amount due in United States Dollars is calculated based upon one or more
currencies other than United States Dollars, such amounts shall be converted to
United States Dollars using the average of the buying and selling exchange rates
for conversion of the applicable foreign currency into United States Dollars,
using the spot rates (the "Closing Mid-Point Rates" found in the "Dollar spot
forward against the Dollar" table published by The Financial Times, or any other publication as agreed to by the Parties) from the last
Business Day of the preceding month. 

     

              9.9 Late Payments. The Parties agree that, unless otherwise
mutually agreed by the Parties or otherwise provided in this Agreement, amounts
due by one Party to the other shall be payable to a bank account, details of
which are to be communicated by the receiving Party. All late payments under
this Agreement shall earn interest, to the extent permitted by applicable Law,
from the date due until paid at a rate equal to the thirty (30) day London
Inter-Bank Offering Rate (LIBOR) U.S. Dollars, as quoted in The Wall Street Journal
(Eastern Edition) effective for the date on which the payment was due, ****
(such sum being referred to as the "Default Interest Rate").

     

    53 

     

    

    
    

              9.10 Taxes. Except as set forth in Section 9.2, any
withholding or other taxes that either Party or its Affiliates are required by
Law to withhold or pay on behalf of the other Party, with respect to any
payments to such other Party hereunder, shall be deducted from such payments and
paid to the appropriate tax authority contemporaneously with the remittance to
the other Party; provided, however, that the withholding Party shall promptly
furnish to the other Party proper evidence or other reasonable documentation of
the taxes so paid. Each Party shall cooperate with the other and furnish to the
other Party appropriate documents to secure application of the most favorable
rate of withholding tax under applicable Law (or exemption from such withholding
tax payments, as applicable). Without limiting the foregoing, each Party agrees
to make all lawful and reasonable efforts to minimize any such taxes,
assessments and fees and will claim on the other Party's behalf the benefit of
any available treaty on the avoidance of double taxation that applies to any
payments hereunder to such other Party. 

     

              9.11 Adjustments to FTE Rates. Notwithstanding anything herein to the
contrary, upon the request of either Party, the Parties shall meet to review the
accuracy of an applicable FTE rate in any country (e.g., Sales Force FTE Rate, Medical Post-Approval
FTE Rate, Development FTE Rate, etc.). The Parties agree to share reasonable
supporting documents and materials in connection with an assessment of the
applicable FTE rate and to determine in good faith whether to adjust the rate(s)
in any country.

     

              9.12 Resolution of Payment
Disputes. In the event
there is a dispute relating to any of the payment obligations or reports under
this Article IX, the Party with the dispute shall have its representative on the
JFC provide the other Party's representative on the JFC with written notice
setting forth in reasonable detail the nature and factual basis for such good
faith dispute and the Parties, through the JFC, will seek to resolve the dispute
as promptly as possible, but no later than ten (10) days after such written
notice is received. In the event that no resolution is reached by the JFC, the
matter shall be referred to the JSC in accordance with Section 3.11(a).
Notwithstanding any other provision of this Agreement to the contrary, the
obligation to pay any reasonably disputed amount shall not be deemed to have
been triggered until such dispute is resolved hereunder, provided that all
amounts that are not in dispute shall be paid in accordance with the provisions
of this Agreement. 

     

    ARTICLE X
DISPUTE
RESOLUTION

     

              10.1 Resolution of Disputes. The Parties recognize that disputes as to
certain matters may from time to time arise which relate to either Party's
rights and obligations hereunder. It is the objective of the Parties to comply
with the procedures set forth in this Agreement and to use all reasonable
efforts to facilitate the resolution of such disputes in an expedient manner by
mutual agreement. 

     

    54 

     

    

    
    

              10.2 Governance Disputes. Disputes, controversies and claims related
to matters intended to be decided within the governance provisions of this
Agreement set forth in Article III ("Governance Disputes") shall be resolved pursuant to Article III
and, to the extent such matters constitute Technical Development Matters, a
dispute referred to in Section 14.2(b) or a Budget Dispute, Section 10.4, except
to the extent any such dispute, controversy or claim constitutes a Legal
Dispute, in which event the provisions of Section 10.3 shall apply. For the
purposes of this Agreement, the term "Technical Development
Matter" shall mean any
dispute concerning a Party's refusal to approve a clinical trial proposed
pursuant to Section 2.6(b).

     

              10.3 Legal Disputes. The Parties agree that, subject to Sections
10.5 and 16.2, they shall use all reasonable efforts, through their
participation in the JSC in the first instance, to resolve any Legal Dispute
arising after the Effective Date by good faith negotiation and discussion. In
the event that the JSC is unable to resolve any such Legal Dispute within five
(5) Business Days of receipt by a Party of notice of such Legal Dispute, either
Party may submit the Legal Dispute to the Executive Officers for resolution. In
the event the Executive Officers are unable to resolve any such Legal Dispute
within the time period set forth in Section 3.11(b), the Parties shall be free
to pursue any rights and remedies available to them at law, in equity or
otherwise, subject, however, to Section 20.1 and Section 20.15. 

     

              10.4 Expert Panel.

     

              (a) In the event of a dispute between the Parties concerning a Technical
Development Matter, any Budget Dispute or a dispute referred to in Section
14.2(b) that cannot be resolved by the Executive Officers pursuant to Section
3.11(b) (other than a Legal Dispute), either Party may by written notice to the
other Party require the specific issue in dispute to be submitted to a panel of
experts ("Expert Panel") in accordance with this Section 10.4 (for
the avoidance of doubt, it is understood that, subject to Section 10.4(e), in
the case of a Budget Dispute first submitted to the Expert Panel, the specific
issue shall be limited to the overall commercial reasonableness of the Disputed
Budget). Such notice shall contain a statement of the issue forming the basis of
the dispute, the position of the moving Party as to the proper resolution of
that issue and the basis for such position. Within fifteen (15) days after
receipt of such notice, the responding Party shall submit to the moving Party a
statement of its conception of the specific issue in question, its position as
to the proper resolution of that issue and the basis for such
position.

     

              (b) Within fifteen (15) days of the responding Party's response, each Party
shall appoint to the Expert Panel an individual who (i) has expertise in the
pharmaceutical or biotechnology industry and the specific matters at issue (or,
in the case of a dispute regarding an audit as referred to in Section 14.2(b),
expertise in accounting and auditing with respect to the development and
commercialization of pharmaceutical products), (ii) is not a current or former
director, employee or consultant of such Party or any of its Affiliates, or
otherwise has not received compensation or other payments from such Party (or
its Affiliates) for the past five (5) years and (iii) has no known personal
financial interest or benefit in the outcome or resolution of the dispute, and
the appointing Party shall give the other Party written notice of such
appointment; provided that for such appointment to be effective and for such
individual to serve on the Expert Panel, such individual must deliver to the
other Party a certificate confirming that such individual satisfies the criteria
set forth in clauses (i) through (iii) above, disclosing any potential conflict
or bias and certifying that, as a member of the Expert Panel, such individual is
able to render an independent decision.

     

    55 

     

    

    
    

              (c) Within fifteen (15) days of the appointment of the second (2nd) expert,
the two (2) appointed experts shall agree on an additional expert who meets the
same criteria as described above, and shall appoint such expert as chair of the
Expert Panel. If the Party-appointed experts fail to timely agree on a third
(3rd) expert, then upon the written request of either Party, each
Party-appointed expert shall, within ten (10) days of such request, nominate one
expert candidate and the CPR Institute for Dispute Resolution shall, within ten
(10) days of receiving the names of the Parties' respective nominees, select one
of those experts to serve as the chair of the Expert Panel. Each expert shall
agree, prior to his or her appointment, to render a decision as soon as
practicable after the appointment of the full Expert Panel.

     

              (d) Within seven (7) days of the appointment of the third (3rd) expert, the
Expert Panel shall hold a preliminary meeting or teleconference with the Parties
or their representatives and shall designate a time and place for a hearing of
the Parties on the dispute and the procedures to be utilized at the hearing. The
Parties may agree in writing to waive the hearing and have the Expert Panel
reach a decision on the basis of written submissions alone. The Expert Panel may
order the Parties to produce any documents or information which are relevant to
the dispute. All such documents or information shall be provided to the other
Party and the Expert Panel as expeditiously as possible but no later than one
(1) week prior to the hearing (if any), along with the names of all witnesses
who will testify at the hearing and a brief summary of their testimony. The
hearing shall be held in New York, NY, unless otherwise agreed by the Parties,
and shall take place as soon as possible but no more than forty-five (45) days
after the appointment of the third expert, unless the Parties otherwise agree in
writing or the Expert Panel agrees to extend such time period for good cause
shown. The hearing shall last no more than one (1) day, unless otherwise agreed
by the Parties or the Expert Panel agrees to extend such time period for good
cause shown. After the conclusion of all testimony (or if no hearing is held
after all submissions have been received from the Parties), at a time designated
by the Expert Panel no later than seven (7) days after the close of the hearing
or the receipt of all submissions, each Party shall simultaneously submit to the
Expert Panel and exchange with the other Party its final proposed resolution
(which, in the case of a Budget Dispute first submitted to the Expert Panel
shall be a Party's proposed resolution that the Disputed Budget either is or is
not overall commercially reasonable).

     

    56 

     

    

    
    

              (e) In rendering the final decision with respect to a Budget Dispute first
submitted to the Expert Panel, the Expert Panel shall be limited to determining
the overall commercial reasonableness of the Disputed Budget. If the Expert
Panel determines that such Disputed Budget is overall commercially reasonable,
then such Budget Dispute shall be deemed finally resolved and such resolution
shall be binding on the Parties. However, if the Expert Panel determines that
such Disputed Budget is not overall commercially reasonable, then the
Expert Panel shall, within fifteen (15) days after such determination, render a
final decision as to what modifications could be made to such Disputed Budget in
order for it to be overall commercially reasonable (a "Budget Modification Decision"). In connection with reaching a Budget
Modification Decision, the Expert Panel shall order the Parties to produce any
documents or other information which are relevant to such final decision, and
the Parties shall submit such documents or other information, together with
their respective proposed resolutions which shall consist of their respective
proposed modifications to the Disputed Budget in order for it to be overall
commercially reasonable, at least seven days prior to the date a Budget
Modification Decision is required to be rendered as provided above. In rendering
the final decision (which, for other than a Budget Modification Decision, shall
be rendered no later than fifteen (15) days after receipt by the Expert Panel of
the Parties' respective proposed resolutions, and for a Budget Modification
Decision, shall be rendered no later than seven days after receipt by the Expert
Panel of the Parties' respective proposed resolutions), the Expert Panel shall
be limited to choosing a resolution proposed by a Party without modification;
provided, however, that in no event shall the Expert Panel render a decision
that is inconsistent with the Collaboration Purpose and the Parties' intentions
as set forth in this Agreement. The agreement of two (2) of the three (3)
experts shall be sufficient to render a decision and the Parties shall abide by
such decision.

     

              (f) The decision of the Expert Panel shall be final and binding on the
Parties and may be entered and enforced in any court having jurisdiction. Each
Party shall bear the cost of its appointee to the Expert Panel and the Parties
shall share equally the costs of the third expert. 

     

              10.5 No Waiver. Nothing in this Article X or elsewhere in
this Agreement shall prohibit either Party from seeking and obtaining immediate
injunctive or other equitable relief if such Party reasonably believes that it
will suffer irreparable harm from the actions or inaction of the other.

     

    ARTICLE XI
TRADEMARKS AND CORPORATE LOGOS

     

              11.1 Corporate Names. Each Party and its Affiliates shall retain
all right, title and interest in and to their respective corporate names and
logos. 

     

              11.2 Selection of Product
Trademarks. For each
Licensed Product, the JCC shall select one Product Trademark for use in the
Field throughout the Territory, unless such Product Trademark is prohibited by
law in any country in the Territory or the JCC determines that a different
Product Trademark should be used in particular countries or Regions to maximize
the commercial potential of such Licensed Product. Once a Product Trademark has
been selected by the JCC, the Parties shall enter into an agreement or, in the
alternative, shall amend this Agreement as the Parties may agree, in order to
address the Parties' respective rights and obligations with respect to such
Product Trademark. Each Licensed Product in the Field shall be promoted and sold
in the Territory under the applicable Product Trademark(s), trade dress and
packaging approved by the JCC. 

     

    57 

     

    

    
    

              11.3 Ownership of Product
Trademarks. Unless
otherwise mutually agreed between the Parties, and subject to Sections 11.4 and
11.5, Sanofi (or its local Affiliates, as appropriate) shall own and retain all
right, title and interest in and to Product Trademark(s), together with all
associated domain names and all goodwill related thereto in all countries in the
Territory.

     

              11.4 Prosecution and Maintenance of Product
Trademark(s). Sanofi will
use Commercially Reasonable Efforts to prosecute and maintain the Product
Trademark(s) in all countries in the Territory. Notwithstanding the foregoing,
in the event Sanofi elects not to prosecute or maintain any Product Trademark(s)
in any country in the Territory, Sanofi shall provide reasonable prior written
notice to Regeneron of its intention not to prosecute or maintain any such
Product Trademark in such country in the Territory, and Regeneron shall have the
right to do so on behalf of Sanofi for use with Licensed Products, subject to
consultation and cooperation with Sanofi. All Out-of-Pocket Costs incurred in
the filing, prosecution and maintenance of Product Trademarks as provided in
this Section 11.4 shall be shared by the Parties as part of Shared Commercial
Expenses. 

     

              11.5 License to the Product
Trademark(s). Sanofi
hereby grants to Regeneron a co-exclusive license (non-exclusive only with
respect to Regeneron) to use the Product Trademark(s) for the Licensed Products
solely for the purposes of Regeneron's Development, Manufacturing, and, if
applicable, Co-Promotion of Licensed Products, or other Regeneron
Commercialization activities with respect to Licensed Products if agreed to by
Sanofi or set forth in any Plans, subject to the terms and conditions of this
Agreement. Consistent with Section 4.4 of this Agreement, neither Party shall
license (or in the case of Regeneron, sublicense) rights to use, or otherwise
transfer ownership of the Product Trademark(s) without the prior written consent
of the other Party, such consent not to be unreasonably withheld or delayed.
Sanofi shall only utilize the Product Trademark(s) on approved Promotional
Materials, on the Licensed Products as needed and on or other approved
product-related materials for the Licensed Products in the Field in the
Territory for the purposes contemplated herein, and all use by Sanofi or its
Affiliates or Sublicensees of the Product Trademark(s) shall be in accordance
with (a) rules established by the JCC and (b) quality standards established by
the JCC which are reasonably necessary in order to preserve the validity and
enforceability of the Product Trademark(s). Each Party agrees that at no time
during the Term will it or any of its Affiliates attempt to use or register any
trademarks, trade dress, service marks, trade names or domain names confusingly
similar to the Product Trademark(s) in relation to a product that is a Licensed
Product, or take any other action which damages or dilutes the rights to, or
goodwill associated with, the Product Trademark(s). Upon request by either
Party, the other Party shall (or shall cause its Affiliates, as appropriate, to)
execute such documents as may reasonably be required for the purpose of
recording with any Governmental Authority the license, or a recordable version
thereof, referred to above in this Section 11.5. 

     

    58 

     

    

    
    

              11.6 Use of Corporate Names. Sanofi (through its Affiliates, as
appropriate) shall use Commercially Reasonable Efforts to include Regeneron's
name with equal prominence on materials related to each Licensed Product in the
Field (including, without limitation, package inserts, packaging, trade
packaging, samples and all Promotional Materials used or distributed in
connection with such Licensed Product), unless to do so would be prohibited
under applicable Laws; provided, however, in the case of multi-product
materials that refer to a Licensed Product in the Field as well as other
pharmaceutical products, the prominence of Regeneron's name shall be
commensurate with the relative prominence of the Licensed Product in such
materials. Each Party grants to the other Party (and its Affiliates) the right,
free of charge, to use its name and logo on package inserts, packaging, trade
packaging, samples and all Promotional Materials used or distributed in
connection with the applicable Licensed Product in the Field in the Territory
during the Term and thereafter with respect to Promotional Materials, package
inserts, packaging, labeling, trade packaging and samples, only for the time
period and solely to the extent necessary to exhaust the existing inventory of
Licensed Product (including packaging materials for such Licensed Product) and
Promotional Materials containing such name or logo. During the Term, each Party
shall submit samples of each such package inserts, packaging, trade packaging,
etc. to such other Party for its prior approval, which approval shall not be
unreasonably withheld or delayed, at least thirty (30) days before dissemination
of such materials. Failure of the receiving Party to object within such thirty
(30) day period shall constitute approval of the submitting Party's package
inserts, packaging, trade packaging, etc. 

     

    ARTICLE XII
NEWLY CREATED INVENTIONS AND KNOW-HOW

     

              12.1 Ownership of Newly Created Intellectual
Property. 

     

              (a) Subject to Section 12.1(e), each Party (and each Party's respective
Affiliates) shall exclusively own all intellectual property (including, without
limitation, Know-How, Patents and Patent Applications and copyrights)
discovered, invented, authored or otherwise created in connection with the
Collaboration solely by such Party, its Affiliates, employees, agents and
consultants ("Sole Inventions"). Sole Inventions made solely by Sanofi, its
Affiliates, employees, agents and consultants are referred to herein as
"Sanofi Sole Inventions". Sole Inventions made solely by Regeneron,
its Affiliates, employees, agents and consultants are referred to herein as
"Regeneron
Sole Inventions". The Parties agree that nothing in this
Agreement, and no use by a Party of the other Party's Intellectual Property
pursuant to this Agreement, shall vest in a Party any right, title or interest
in or to the other Party's Intellectual Property, other than the license rights
expressly granted hereunder. Any remuneration payable under applicable law to an
inventor and costs associated with determining such remuneration shall be
treated as Other Shared Expenses.

     

              (b) The Parties shall jointly own all intellectual property (including,
without limitation, Know-How, Patents and Patent Applications and copyrights)
discovered, invented, authored or otherwise created under the Collaboration
during the Term that is invented or authored jointly by an individual or
individuals having an obligation to assign such intellectual property to Sanofi
or its Affiliate (or for which ownership vests in Sanofi or its Affiliate by
operation of law), on the one hand, and an individual or individuals having an
obligation to assign such intellectual property to Regeneron or its Affiliate
(or for which ownership vests in Regeneron or its Affiliate by operation of
Law), on the other hand, on the basis of each Party (or its Affiliate) having an
undivided interest in the whole ("Joint Inventions"). 

     

    59 

     

    

    
    

              (c) Notwithstanding the foregoing in Section 12.1(b), (i) for purposes of
determining whether a patentable invention is a Sanofi Sole Invention, a
Regeneron Sole Invention or a Joint Invention, questions of inventorship shall
be resolved in accordance with United States patent laws, (ii) for purposes of
determining whether a copyrighted work is a Sanofi Sole Invention, a Regeneron
Sole Invention or a Joint Invention, questions of copyright authorship shall be
resolved in accordance with United States copyright laws and (iii) for purposes
of determining whether Know-How (other than copyrighted work and Patent
Applications) is a Sanofi Sole Invention, a Regeneron Sole Invention or a Joint
Invention, questions of authorship or inventorship shall be resolved in
accordance with the laws of the State of New York, United States.

     

              (d) To the extent that any right, title or interest in or to any intellectual
property discovered, invented, authored or otherwise created under the
Collaboration during the Term vests in a Party or its Affiliate, by operation of
Law or otherwise, in a manner contrary to the agreed upon ownership as set forth
in this Agreement, such Party (or its Affiliate) shall, and hereby does,
irrevocably assign to the other Party any and all such right, title and interest
in and to such intellectual property to the other Party without the need for any
further action by any Party.

     

              (e) Subject to the other terms and conditions of this Agreement (other than
Section 12.1(a)), to the extent permitted under any relevant Third Party
agreement, each Party agrees that all Know-How, other than Excluded Know-How
Rights, discovered, invented, authored or otherwise created by it (or its
Affiliate) after the Effective Date directly in connection with the performance
of the research and clinical activities approved by the JDC, in each case, as
included in the Global Development Plans shall be Joint Inventions. Each Party
agrees to execute all necessary documentation to reflect the foregoing. As used
above, the term "Excluded Know-How Rights" shall mean any Know-How claiming or covering
composition (including any formulation) of a Licensed Product, including, for
the avoidance of doubt, any manufacturing and/or cell line related intellectual
property. For further clarity, nothing in this Section 12.1(e) shall be
construed to grant either Party any rights to Patents or Know-How of the other
Party discovered, invented, authored or otherwise created by it outside the
performance of the research activities approved by the JDC and/or the clinical
development activities approved by the JDC, in each case, as included in Global
Development Plans.

     

              (f) The Parties hereby agree that each Party's use of the Joint Inventions is
governed by the terms and conditions of this Agreement shall be governed as
follows: each Party's interest in the Joint Inventions may be sublicensed to
Third Parties, and any ownership rights therein transferred, in whole or in
part, by each Party without consent of the other Party (unless otherwise
prohibited by this Agreement); provided that (i) each of the Parties
acknowledges that it receives no rights to any Intellectual Property of the
other Party underlying or necessary for the use of any Joint Invention, except
as may be expressly set forth in Article IV, (ii) each Party agrees not to
transfer any of its ownership interest in any of the Joint Inventions without
securing the transferee's written agreement to be bound by the terms of this
Section 12.1(e) and (iii) nothing in this Article XII shall relieve a Party or
its Affiliates of their obligations under Article XVI with respect to
confidential Party Information provided by the other Party or such other Party's
Affiliates. Each of the Parties (or its Affiliate), as joint owner of the Joint
Inventions, agrees to cooperate with any enforcement actions brought by the
other joint owner(s) against any Third Parties, and further agrees not to grant
any licenses to any such Third Parties against which such enforcement actions
are brought during the time of such dispute, without the prior written consent
of the other joint owner(s), such consent not to be unreasonably withheld.
Neither Party hereto shall have the obligation to account to the other Party for
any revenues or profits obtained from any transfer of its interest in, or its
use, sublicense or other exploitation of, the Joint Inventions outside the scope
of the Collaboration. The provisions governing Joint Inventions set forth in
this Section 12.1(e) shall survive the expiration or termination of this
Agreement.

     

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              12.2 Prosecution and Maintenance of Patent
Rights. 

     

              (a) Regeneron shall prepare, file, prosecute and maintain Patents and Patent
Applications (as applicable) included in the Regeneron Patent Rights in the
Territory. Regeneron shall undertake such activities using outside counsel
reasonably acceptable to Sanofi except that all provisionals, the priority
application based thereon and the corresponding PCT may be prepared and filed by
Regeneron's in-house counsel. Regeneron shall confer with and keep Sanofi
reasonably informed regarding the status of such activities. In addition,
Regeneron shall have the following obligations with respect to the filing,
prosecution and maintenance of Regeneron Patent Rights: (i) Regeneron shall
provide to Sanofi for review and comment a substantially completed draft of any
priority Patent Application in the Territory at least thirty (30) days prior to
the filing of any such priority Patent Application by Regeneron and incorporate
any reasonable comment from Sanofi within such thirty (30) day period unless
Regeneron reasonably believes that such comments will adversely affect the
Patent Application or resulting Patent (it being understood that the Parties
will discuss any points of disagreement and work to resolve disagreements during
this thirty (30) day period); (ii) Regeneron shall provide Sanofi promptly with
copies of all material communications received from or filed in patent offices
in the Territory with respect to such filings; (iii) Regeneron shall consult
with Sanofi promptly following the filing of the priority Patent Applications in
the Territory to mutually determine in which countries in the Territory it shall
file convention Patent Applications, provided, however, applications shall be
filed in at least ********************************************* (the
"Patent Jurisdictions") unless otherwise agreed in writing; and
(iv) Regeneron shall consult with Sanofi a reasonable time prior to taking or
failing to take action that would materially affect the scope or validity of
rights under any Patent Applications or Patents in the Field (including but not
limited to substantially narrowing or canceling any claim without reserving the
right to file a continuing or divisional Patent Application, abandoning any
Patent or not filing or perfecting the filing of any Patent Application in any
country). In the event that Regeneron desires to abandon any Patent included in the Regeneron Patent
Rights in the Territory, Regeneron shall provide reasonable prior written notice
to Sanofi of such intention to abandon (which notice shall, in any event, be
given no later than sixty (60) days prior to the next deadline for any action
that may be taken with respect to such Regeneron Patent with the applicable
patent office) and Sanofi shall have the right, but not the obligation, to
assume responsibility for the prosecution and maintenance thereof, in
Regeneron's name or Sanofi's name at Sanofi's sole discretion, unless, with
respect to any such Patent Applications that are unpublished, Regeneron notifies
Sanofi that Regeneron would prefer to maintain the subject matter of such Patent
Application as a trade secret and Sanofi agrees in writing.

     

    61

     

    

    
    

              (b) Sanofi shall prepare, file, prosecute and maintain Patents and Patent
Applications (as applicable) included in the Sanofi Patent Rights in the
Territory and shall confer with and keep Regeneron reasonably informed regarding
the status of such activities. In addition, Sanofi shall have the following
obligations with respect to the filing, prosecution and maintenance of Sanofi
Patent Rights: (i) Sanofi shall provide to Regeneron for review and comment a
copy of a substantially completed draft of any priority Patent Application in
the Territory at least thirty (30) days prior to the filing of any such priority
Patent Application by Sanofi and incorporate any reasonable comment from
Regeneron unless Sanofi reasonably believes that such comments will adversely
affect the Patent Application or resulting Patent (it being understood that the
Parties will discuss any points of disagreement and work to resolve
disagreements during this thirty (30) day period); (ii) Sanofi shall provide
Regeneron promptly with copies of all material communications received from or
filed in patent offices with respect to such filings; (iii) Sanofi shall consult
with Regeneron promptly following the filing of the priority Patent Applications
in the Territory to mutually determine in which countries in the Territory it
shall file convention Patent Applications, provided, however, applications shall
be filed in at least the Patent Jurisdictions unless otherwise agreed in
writing; and (iv) Sanofi shall consult with Regeneron a reasonable time prior to
taking or failing to take action that would materially affect the scope or
validity of rights under any Patent Applications or Patents in the Field
(including but not limited to substantially narrowing or canceling any claim
without reserving the right to file a continuing or divisional Patent
Application, abandoning any Patent or not filing or perfecting the filing of any
Patent Application in any country). In the event that Sanofi desires to abandon
any Patent included in the Sanofi Patent Rights in the Territory, Sanofi shall
provide reasonable prior written notice to Regeneron of such intention to
abandon (which notice shall, in any event, be given no later than sixty (60)
days prior to the next deadline for any action that may be taken with respect to
such Sanofi Patent with the applicable patent office) and Regeneron shall have
the right, but not the obligation, to assume responsibility for the prosecution
and maintenance thereof in Sanofi's name, unless, with respect to any such
Patent Applications that are unpublished, Sanofi notifies Regeneron that Sanofi
would prefer to maintain the subject matter of such Patent Application as a
trade secret and Regeneron agrees in writing.

     

    62 

     

    

    
    

              (c) With respect to any Joint Patent Rights, the
Parties shall consult with each other regarding the filing, prosecution and
maintenance of any Patents and Patent Applications, and responsibility for such
activities shall be the obligation of the Controlling Party. The Controlling
Party shall undertake such filings, prosecutions and maintenance in the names of
both Parties as co-owners through outside counsel reasonably acceptable to the
non-Controlling Party, except that the Controlling Party may prepare and file
all provisional applications, priority applications based thereon and the
corresponding PCTs using in-house counsel. The Controlling Party shall
have the following obligations with respect to the filing, prosecution and
maintenance of Patent Applications and Patents under any such Joint Patent
Rights: (i) the Controlling Party shall provide the non-Controlling Party with
notice and a copy of a substantially completed draft of any priority Patent
Application at least thirty (30) days prior to the filing of any such priority
Patent Application by the Controlling Party and incorporate any reasonable
comment provided by the non-Controlling Party within such thirty (30) day period
(it being understood that the Parties will discuss any points of disagreement
and work to resolve disagreements during this thirty (30) day period; (ii) the
Controlling Party shall notify the non-Controlling Party prior to the filing of
a Patent Application by the Controlling Party; (iii) the Controlling Party shall
consult with the non-Controlling Party promptly following the filing of the
priority Patent Application to mutually determine in which countries it shall
file convention Patent Applications provided, however, applications shall be
filed in at least the Patent Jurisdictions unless otherwise agreed in writing;
(iv) the Controlling Party shall provide the non-Controlling Party promptly with
copies of all material communications received from or filed in patent offices
with respect to such filings and the Parties use all reasonable efforts to reach
agreement in a timely manner with respect to all material responses and
amendments; and (v) the Controlling Party shall provide the non-Controlling
Party a reasonable time prior to taking or failing to take action that would
affect the scope or validity of rights under any Patent Applications or Patents,
but in no event less than sixty (60) days prior to the next deadline for any
action that may be taken with the applicable patent office (including but not
limited to substantially narrowing or canceling any claim without reserving the
right to file a continuing or divisional Patent Application, abandoning any
Patent or not filing or perfecting the filing of any Patent Application in any
country), with notice of such proposed action or inaction so that the
non-Controlling Party has a reasonable opportunity to review and make comments,
and take such actions as may be appropriate in the circumstances. In the event
that the Controlling Party materially breaches the foregoing obligations and
such breach is not cured within thirty (30) days of a written notice from the
non-Controlling Party to the Controlling Party describing such breach, or in the
event that the Controlling Party fails to undertake the filing of a Patent
Application within the earlier of (i) ninety (90) days of a written request by
the non-Controlling Party to do so, and (ii) sixty (60) days prior to the
anticipated filing date, the non-Controlling Party may assume the Controlling
Party's responsibility for filing, prosecution and maintenance of any such Joint
Patent Right, and will thereafter be deemed the Controlling Party for purposes
hereof. Notwithstanding the foregoing, the Controlling Party may withdraw from
or abandon any Patent or Patent Application relating to any Joint Patent Rights
on thirty (30) days' prior written notice to the other Party (provided that such
notice shall be given no later than sixty (60) days prior to the next deadline
for any action that may be taken with respect to such Patent or Patent
Application with the applicable patent office), providing the non-Controlling
Party a free-of-charge option to assume the prosecution or maintenance
thereof.

     

              (d) Each
Party agrees to cooperate with the other with respect to the preparation,
filing, prosecution and maintenance of Patents and Patent Applications pursuant
to this Section 12.2, including, without limitation, the execution of all such
documents and instruments and the performance of such acts (and causing
its relevant employees to execute such documents and instruments and to perform
such acts) as may be reasonably necessary in order to permit the other Party to
continue any preparation, filing, prosecution or maintenance of Joint Patent
Rights that such Party has elected not to pursue as provided for in Section
12.2(c). The JCC, with the approval of the JSC, will determine which of the
Sanofi Patent Rights, Regeneron Patent Rights and Joint Patent Rights for which
to seek an extension of term and the applicable Party will file for said patent
term extension.

     

    63 

     

    

    
    

              (e) All Out-of-Pocket Costs incurred in the filing, prosecution and
maintenance of any Sanofi Patent Rights, Regeneron Patent Rights and Joint
Patent Rights in the Territory for use in the Field, and any extensions thereof,
shall be treated as Other Shared Expenses.

     

              12.3 Interference, Opposition and
Reissue. 

     

              (a) Each Party will notify the other within ten (10) days of receipt by such
Party of information concerning the request for, or filing or declaration of,
any interference, opposition or reexamination relating to Regeneron Patent
Rights, Sanofi Patent Rights or Joint Patent Rights in the Territory. The
Parties will thereafter consult and cooperate fully to determine a course of
action with respect to any such proceeding. The Parties will reasonably consult
with one another in an effort to agree with respect to decisions on whether to
initiate or how to respond to such a proceeding, as applicable, and the course
of action in such proceeding, including settlement negotiations and terms,
provided that if such agreement cannot be reached promptly, such decisions will
be made (i) with respect to Regeneron Patent Rights, by Regeneron in
consultation with Sanofi, (ii) with respect to Sanofi Patent Rights, by Sanofi
in consultation with Regeneron and (iii) with respect to Joint Patent Rights,
jointly by the Parties.

     

              (b) All Out-of-Pocket Costs incurred in connection with any interference,
opposition, reissue or reexamination proceeding relating to the Regeneron Patent
Rights, Sanofi Patent Rights and/or Joint Patent Rights in the Territory for use
in the Field shall be treated as Other Shared Expenses. 

     

    ARTICLE XIII
INTELLECTUAL PROPERTY LITIGATION AND LICENSES

     

              13.1 Third Party Infringement
Suits. 

     

              (a) In the event that either Party or any of its Affiliates becomes aware of
an actual, potential or suspected infringement of a Sanofi Patent Right, a
Regeneron Patent Right, a Joint Patent Right, Product Trademark or any other
intellectual property right jointly owned or licensed under this Agreement, by a
Third Party's activities in the Field in the Territory, the Party that became
aware of the infringement shall promptly notify the other Party in writing of
this claim or assertion and shall provide such other Party with all available
evidence supporting such known, potential or suspected infringement or
unauthorized use. As soon as reasonably practicable after the receipt of such
notice, the Parties shall cause the JSC to meet and consider the appropriate
course of action with respect to such infringement. The Parties shall at all
times cooperate, share all material notices and filings in a timely manner,
provide all reasonable assistance to each other and use Commercially Reasonable
Efforts to mutually agree upon an appropriate course of action, including, as
appropriate, the preparation of material court filings and any discussions
concerning prosecution and/or settlement of any such claim.

     

    64 

     

    

    
    

              (b) With respect to any such actual, suspected or potential infringement by
virtue of a generic or potential generic competitor’s activities in the Field in
the Territory, including but not limited to, any ANDA filing, Paragraph IV
Certification (or the equivalent
for biologics) or other actual or potential infringement by a generic or
potential generic competitor anywhere in the Territory, the Parties will consult
and cooperate fully to determine a course of action. Final decisions on whether
to initiate a proceeding, and the course of action in such proceeding, including
settlement negotiations and terms, will be made by Sanofi with active assistance
from and in consultation with Regeneron. Regeneron will provide reasonable
assistance to Sanofi in prosecuting any suit, and if required by Law, will join
in the suit. Although Sanofi has the right to select counsel of its own choice,
it shall first consult with Regeneron and consider in good faith the
recommendations of Regeneron. The amount of any recovery from any such
infringement suit with respect to activities in the Field in the Territory shall
first be used to pay reasonable costs, including attorneys' fees, relating to
such legal proceedings and then shared equally by the Parties or according to
the U.S. Profit Split and Rest of World Profit Split if and as
applicable.

     

              (c) With respect to all other such actual, potential or suspected
infringement by virtue of a Third Party's activities in the Field in the
Territory, the Parties will consult and cooperate fully in an effort to
determine a mutually agreeable course of action, provided if such agreement
cannot be reached promptly, final decisions on whether to initiate a proceeding,
and the course of action in such proceeding, including settlement negotiations
and terms, will be made (i) with respect to Regeneron Patent Rights, by
Regeneron in consultation with Sanofi, (ii) with respect to Sanofi Patent
Rights, by Sanofi in consultation with Regeneron, and (iii) with respect to
Joint Patent Rights, jointly by the Parties. Any disagreement between the
Parties concerning the enforcement of Joint Patent Rights shall be referred to
the Executive Officers for resolution. The Party initiating the litigations
shall be referred to as the "Lead Litigation
Party." The
non-Lead Litigation Party will provide reasonable assistance to the Lead
Litigation Party in prosecuting any suit, and if required by Law, will join in
the suit. Although the Lead Litigation Party has the right to select counsel of
its own choice, it shall first consult with the other Party and consider in good
faith the recommendations of the other Party. The amount of any recovery from
any such infringement suit with respect to activities in the Field in the
Territory shall first be used to pay reasonable costs, including attorneys'
fees, relating to such legal proceedings and then shared equally by the
Parties.

     

    65 

     

    

    
    

              (d) All Out-of-Pocket Costs incurred in connection with any litigation under
Section 13.1(b) or (c) related to activities in the Field in the Territory shall
be treated as Other Shared Expenses.

     

              (e) For the avoidance of doubt, neither Party will enter into any settlement
of any suit referenced in this Section 13.1 that materially affects the other
Party's rights or obligations with respect to the applicable Licensed Product in
the Field in the Territory without the other Party's prior written consent.
Furthermore, no Party shall enter into any Third Party intellectual property
license requiring the payment of royalties or other amounts based on the
Development, Manufacture or Commercialization of Licensed Products in the Field
in the Territory under this Agreement without the other Party's prior written
consent.

     

              13.2 Patent Marking. Each Party shall comply with the patent
marking statutes in each country in which a Licensed Product in the Field is
made, offered for sale, sold or imported by such Party, its Affiliates and/or
Sublicensees. 

     

              13.3 Third Party Infringement Claims; New
Licenses. 

     

              (a) If either Party or its Affiliates shall learn of an allegation that the
Development, Manufacture or Commercialization of any Licensed Product in the
Field in the Territory under this Agreement infringes or otherwise violates the
intellectual property rights of any Third Party in the Territory, then such
Party shall promptly notify the other Party in writing of this allegation. As
soon as reasonably practicable after the receipt of such notice and at all times
thereafter, the Parties shall meet and consider the appropriate course of action
with respect to such allegation of infringement. In any such instance, each
Party shall have the right to defend any action naming it using its own counsel;
however, the Parties shall at all times cooperate, share all material notices
and filings in a timely manner, provide all reasonable assistance to each other
and use Commercially Reasonable Efforts to mutually agree upon an appropriate
course of action, including, as appropriate, the preparation of material court
filings and any discussions concerning a potential defense and/or settlement of
any such claim. The rights and obligations in this Section 13.3 shall apply even
if only one Party defends any claimed infringement action commenced by a Third
Party in the Territory claiming that the Development, Manufacture and/or
Commercialization of any Licensed Product in the Field under this Agreement
infringes or otherwise violates any intellectual property rights of any Third
Party.

     

              (b) Except as otherwise set forth in this Agreement, all Out-of-Pocket Costs
(except for the expenses of the non-controlling Party's counsel, if only one
Party defends a claim) incurred in connection with any litigation referred to in
this Section 13.3 shall be treated as Other Shared Expenses. 

     

              (c)
For the avoidance of doubt, neither Party will ************** involving Licensed
Products ******************************. Furthermore, no Party shall
**************************** based on the Development, Manufacture or
Commercialization of Licensed Products in the Field in the Territory under this
Agreement *******************************.

     

              (d) License fees, royalties and other payments under Licenses to the extent
attributable to, and based on, the Manufacture of Commercial Supply Requirements
or the Commercialization of Licensed Products in the Field in the Territory
shall be treated as Other Shared Expenses.

     

              (e)
Notwithstanding the provisions of Section 13.3(d), royalty payments under
Licenses agreed to by both Parties which are required for the continued
Development, Manufacture of Commercial Supply Requirements or Commercialization,
of one or more Licensed Products in the Field in the Territory and which arise
directly out of ************************************ shall be shared by the
Parties, on a Licensed Product-by-Licensed Product, and country-by-country basis
as follows: *********************************************.

     

    To the
extent a Party (the "OverPaying Party") has paid more than such Party's share of
**************** in a Quarter, the other Party shall, at the time of the
Quarterly True-Up, pay to the OverPaying Party the required amount in order to
achieve the sharing provided for in this Section 13.3(e). To the extent payments
under Licenses referred to above other than **************************** are
required to be made, the Parties will mutually agree on an
appropriate and
equitable allocation of such payments between them, and the amount and timing of
payments by a Party to the other Party to achieve such allocation, consistent
with **********************. For purposes of this Section 13.3(e),
*************************.

     

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    ARTICLE XIV
BOOKS, RECORDS AND INSPECTIONS; AUDITS AND
ADJUSTMENTS

     

              14.1 Books and Records. Each Party shall, and shall cause each of
its respective Affiliates to, keep proper books of record and account in which
full, true and correct entries (in conformity with GAAP or IAS/IFRS) shall be
made for the purpose of determining the amounts payable or owed pursuant to this
Agreement. Each Party shall, and shall cause each of its respective Affiliates
to, permit auditors, as provided in Section 14.2, to visit and inspect, during
regular business hours and under the guidance of officers of the Party being
inspected, and to examine the books of record and account of such Party or such
Affiliate to the extent relating to this Agreement and discuss the affairs,
finances and accounts of such Party or such Affiliate to the extent relating to
this Agreement with, and be advised as to the same by, its and their officers
and independent accountants. 

     

              14.2 Audits and Adjustments. 

     

              (a) Each Party shall have the right (at its own cost), upon no less than
thirty (30) days advance written notice and at such reasonable times and
intervals and to such reasonable extent as the investigating Party shall
request, not more than once during any Contract Year, to have the books and
records of the other Party and its Affiliates to the extent relating to this
Agreement for the preceding two (2) years audited by an independent "Big Four"
(or equivalent) accounting firm of its choosing under reasonable appropriate
confidentiality provisions, for the sole purpose of verifying the accuracy of
all financial, accounting and numerical information and calculations provided,
and payments made, under this Agreement; provided that no period may be
subjected to audit more than one (1) time unless a material discrepancy is found
in any such audit of such period, in which case additional audits of such period
may be conducted until no material discrepancies are found.

     

              (b) The results of any such audit shall be delivered in writing to each Party
and shall be final and binding upon the Parties, unless disputed by a Party
within ninety (90) days. Unless otherwise mutually agreed by the Parties, any
disputes regarding the results of any such audit shall be subject to dispute
resolution in accordance with Article X. If the audited Party or its Affiliates
have underpaid or over billed an amount due under this Agreement resulting in a
cumulative discrepancy during any year of more than seven and one-half percent
(7.5%), the audited Party shall also reimburse the other Party for the costs of
such audit (with the cost of the audit to be paid by the auditing party in all
other cases). Such accountants shall not reveal to the Party seeking
verification the details of its review, except for such information as is
required to be disclosed under this Agreement, and shall be subject to the
confidentiality provisions contained in Article XVI. 

     

    67 

     

    

    
    

              (c)
If any examination or audit of
the records described above discloses an under- or over-payment of amounts due
hereunder, then unless the result of the audit is to be contested pursuant to
Section 14.2(b) above, the Party owing any money hereunder shall pay the same
(plus interest thereon at the Default Interest Rate from the date of such
underpayment through the date of payment of the amount required to be paid
pursuant to this Section 14.2(c)) to the Party entitled thereto within thirty
(30) days after receipt of the written results of such audit pursuant to this
Section. 

     

              14.3
GAAP/IAS/IFRS. Except as otherwise provided herein, all
costs and expenses and other financial determinations with respect to this
Agreement shall be determined in accordance with, at a Party's election, GAAP or
IAS/IFRS. 

     

    ARTICLE XV 
REPRESENTATIONS, WARRANTIES AND COVENANTS 

     

              15.1
Due
Organization, Valid Existence and Due Authorization; Financial
Capability.
Each Party hereby represents and warrants to the other Party, as of the
Effective Date, as follows: (a) it is duly organized and validly existing under
the Laws of its jurisdiction of incorporation; (b) it has full corporate (or, in
the case of Sanofi Amerique, partnership) power and authority and has taken all
corporate (or, in the case of Sanofi Amerique, partnership) action necessary to
enter into and perform this Agreement; (c) the execution and performance by it
of its obligations hereunder will not constitute a breach of, or conflict with,
its organizational documents nor any other agreement by which it is bound or any
requirement of applicable Laws or regulations; (d) this Agreement is its legal,
valid and binding obligation, enforceable in accordance with the terms and
conditions hereof (subject to applicable Laws of bankruptcy and moratorium); (e)
such Party is not prohibited by the terms of any agreement to which it is a
party from granting, the licenses granted to the other under Article IV hereof;
and (f) no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee in connection with this Agreement or the transactions
contemplated hereby based on arrangements made by it or on its behalf. Each
Party hereby represents and warrants to the other Party that such Party has, and
will continue to have, sufficient liquid assets to promptly and timely pay and
perform all of the payments and obligations required by such Party or its
Affiliates to be paid and performed by them hereunder. 

     

              15.2
Knowledge of Pending or Threatened
Litigation. Each Party
represents and warrants to the other Party that, as of the Effective Date, there
is no claim, announced investigation, suit, action or proceeding pending or, to
such Party's knowledge, threatened, against such Party before or by any
Governmental Authority or arbitrator that, individually or in the aggregate,
could reasonably be expected to (a) materially impair the ability of such Party
to perform any of its obligations under this Agreement or (b) prevent or
materially delay or alter the consummation of any or all of the transactions
contemplated hereby. During the Term, each Party shall promptly notify the other
Party in writing upon learning of any of the foregoing. 

     

              15.3
Additional Regeneron Representations,
Warranties and Covenants.
Regeneron additionally represents and warrants to Sanofi that, as of the
Effective Date: 

     

    68 

     

    

    
    

              (a) Regeneron owns all right, title and interest in and to all Regeneron
Patent Rights in existence as of the Effective Date;

     

              (b) Regeneron has the right and authority to grant the rights granted
pursuant to the terms and conditions of this Agreement and Regeneron has not
granted any rights that would be inconsistent with or in conflict with or in
derogation of the rights granted herein;

     

              (c) there is no pending litigation that alleges that any of Regeneron's
activities relating to the Regeneron Intellectual Property have violated, or
would violate, the intellectual property rights of any Third Party (nor has it
received any written communication threatening such litigation);

     

              (d) to Regeneron's knowledge, no litigation has been otherwise threatened
which alleges that any of its activities relating to the Regeneron Intellectual
Property have violated or would violate, any intellectual property rights of any
Third Party;

     

              (e) the conception, development and reduction to practice of any Regeneron
Intellectual Property existing as of the Effective Date has not constituted or
involved the misappropriation of trade secrets or other rights of any
Person;

     

              (f) to Regeneron's knowledge, the issued Patents included in the Regeneron
Intellectual Property existing as of the Effective Date are not invalid or
unenforceable, in whole or part;

     

              (g) Regeneron has not received any written notice of any threatened claims or
litigation seeking to invalidate or otherwise challenge the Regeneron Patent
Rights or Regeneron's rights therein, and, to Regeneron's knowledge, none of the
Regeneron Patent Rights are subject to any pending re-examination, opposition,
interference or litigation proceedings; and

     

              (h) Regeneron has enforceable written agreements with all of its employees
and contractors who may participate in the conduct of the Collaboration or
receive Confidential Information hereunder assigning to Regeneron ownership of
all intellectual property rights created in the course of their employment or
provision of services, as applicable.

     

              15.4 Disclaimer of Warranties. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
CONCERNING THE SUCCESS OR POTENTIAL SUCCESS OF THE DEVELOPMENT,
COMMERCIALIZATION, MARKETING OR SALE OF ANY LICENSED PRODUCT IN THE FIELD.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL
REPRESENTATIONS AND WARRANTIES,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     

    69 

     

    

    
    

              15.5 Mutual Covenants. Each Party hereby covenants to the other
Party as of the Effective Date as follows: (a) it will not during the Term grant
any right or license to any Third Party in the Territory which would be
inconsistent with or in conflict with or in derogation of the rights granted to
the other Party under this Agreement, and will not take any action that would
materially conflict with or adversely affect its obligations to the other Party
under this Agreement; (b) neither Party will use the Patent Rights or Know-How
of the other Party outside the scope of the licenses and rights granted to it
under this Agreement; and (c) in the course of the Development or
Commercialization of a Licensed Product in the Field under this Agreement, it
will not knowingly use and will not have knowingly used an employee or
consultant who is or has been debarred by a Regulatory Authority or, to the best
of such Party's knowledge, is or has been the subject of debarment proceedings
by a Regulatory Authority. 

     

    ARTICLE
XVI
CONFIDENTIALITY

     

              16.1 Confidential Information. 

     

              (a) Each of Sanofi and
Regeneron acknowledges (subject to the further provisions of this Article XVI
and the provisions of Article XIX) that all Party Information provided to it (or
its Affiliate) or otherwise made available to it by the other Party or its
respective Affiliates pursuant to this Agreement (or, in the case of Sanofi,
Party Information provided to it under the Confidentiality Agreements is
confidential and proprietary to such other Party. Furthermore, each of Sanofi
and Regeneron acknowledges (subject to the further provisions of this Article
XVI) that all New Information is confidential and proprietary to both Parties.
Subject to the further provisions of this Article XVI, each of Sanofi and
Regeneron agrees to (i) maintain such Party Information of the other Party (or
its Affiliates) and all New Information in confidence during the Term and for a
period of ten (10) years thereafter and (ii) use such Party Information of the
other Party (or its Affiliate) and New Information solely for the purpose of
exercising its rights and performing its obligations hereunder. Each of Sanofi
and Regeneron covenants that neither it nor any of its respective Affiliates
shall disclose any such Party Information of the other Party (or its Affiliate)
or New Information to any Third Party except (A) to its employees, agents,
consultants or any other Person under its authorization; provided such
employees, agents, consultants or Persons are subject in writing to
substantially the same confidentiality obligations as the Parties, (B) as
approved by both Parties hereunder or (C) as set forth elsewhere in this
Agreement.

     

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              (b) Notwithstanding anything provided above, the
restrictions provided in this Article XVI shall not apply to information that
was or is (and such information shall not be considered confidential or
proprietary under this Agreement) (i) already in the public domain as of the
Effective Date or becomes publicly known through no act, omission or fault of
the receiving Party or its Affiliate or any Person to whom the receiving Party
or its Affiliate provided such information; (ii) already in the possession of
the receiving Party or its Affiliate at the time of disclosure by the disclosing
Party, other than under an obligation of confidentiality; (iii) disclosed
to the receiving Party or its Affiliate on an unrestricted basis from a Third
Party not under an obligation of confidentiality to the other Party or any
Affiliate of such other Party with respect to such information; (iv) similar in
nature to the purported Party Information or New Information but has been
independently created, as evidenced by written or electronic documentation,
without any aid, application or use of the Party Information or New Information;
(v) necessary to file, prosecute or defend Patents and Patent Applications for
which the Party has the right to assume filing, prosecution, defense or
maintenance pursuant to this Agreement; or (vi) required by a Governmental
Authority, applicable Law (including the rules and regulations of any stock
exchange or trading market on which the disclosing Party's (or its parent
entity's) securities are traded), or court order to be disclosed, provided that
the receiving Party uses reasonable efforts to give the disclosing Party advance
notice of such required disclosure in sufficient time to enable the disclosing
Party to seek confidential treatment for such information or to request that the
receiving Party seek confidential treatment for such information, if applicable,
and provided, further, that the receiving Party provides all reasonable
cooperation to assist the disclosing Party to protect such information and
limits the disclosure to that information which is required by Governmental
Authority, applicable Law (including the rules or regulations of any stock
exchange or trading market on which the disclosing Party's (or its parent
entity's) securities are traded) or court order to be disclosed. Moreover,
either Party may use Party Information and New Information to enforce the terms
of this Agreement if it gives reasonable advance notice to the other Party to
permit the other Party a sufficient opportunity to take any measures to ensure
confidential treatment of such information and the disclosing Party shall
provide reasonable cooperation to protect the confidentiality of such
information.

     

              (c) Notwithstanding anything
provided above or elsewhere in this Agreement, Regeneron and its Affiliates
shall have the right to use and disclose any New Information directly related to
any Licensed Product (including the Manufacture or use thereof) to Governmental
Authorities or Regulatory Authorities as required by Law.

     

              (d) Notwithstanding anything
provided above or elsewhere in this Agreement, Sanofi and its Affiliates shall
have the right to use and disclose any New Information directly related to any
Licensed Product (including the Manufacture or use thereof) to Governmental
Authorities or Regulatory Authorities as required by Law. 

     

              16.2 Injunctive Relief. The Parties hereby acknowledge and agree
that the rights of the Parties hereunder are special, unique and of
extraordinary character, and that if any Party refuses or otherwise fails to
act, or to cause its Affiliates to act, in accordance with the provisions of
this Agreement, such refusal or failure would result in irreparable injury to
the other Party, the exact amount of which would be difficult to ascertain or
estimate and the remedies at law for which would not be reasonable or adequate
compensation. Accordingly, if any Party refuses or otherwise fails to act, or to
cause its Affiliates to act, in accordance with the provisions of this
Agreement, then, in addition to any other remedy which may be available to any
damaged Party at law or in equity, such damaged Party will be entitled to seek
specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual or threatened damages,
which remedy such damaged party will be entitled to seek in any court of
competent jurisdiction.

     

    71 

     

    

    
    

              16.3 Publication of New
Information. During the
Term, if either Sanofi or Regeneron (the "Publishing Party") desires to disclose any New Information in
scientific journals, publications or scientific presentations, the Publishing
Party shall provide the other Party an advance copy of any proposed publication
or summary of a proposed oral presentation relating to the New Information prior
to submission for publication or disclosure. Such other Party shall have a
reasonable opportunity to recommend any changes it reasonably believes are
necessary to prevent any specific, material adverse effect to it or the Licensed
Product as a result of the publication or disclosure (such recommendation of
changes to include a description of the specific material adverse effect) to
which the Publishing Party shall give due consideration. Disputes concerning
publication shall be resolved by the JDC (other than Legal Disputes).

     

              16.4 Disclosures Concerning this
Agreement. The Parties
will mutually agree upon the contents of their respective press releases with
respect to the execution of this Agreement and any Ancillary Agreement which
shall be issued simultaneously by both Parties on the Effective Date. Sanofi and
Regeneron agree not to (and to ensure that their respective Affiliates do not )
issue any other press releases or public announcements concerning this
Agreement, any Ancillary Agreement or any actions or activities contemplated
hereunder or thereunder without the prior written consent of the other Party
(which shall not be unreasonably withheld or delayed), except as required by a
Governmental Authority or applicable Law (including the rules and regulations of
any stock exchange or trading market on which a Party's (or its parent entity's)
securities are traded); provided that the Party intending to disclose such
information shall use reasonable efforts to provide the other Party advance
notice of such required disclosure, an opportunity to review and comment on such
proposed disclosure (which comments shall be considered in good faith by the
disclosing Party) and all reasonable cooperation to assist the other Party to
protect such information and shall limit the disclosure to that information
which is required to be disclosed. Notwithstanding the foregoing, without prior
submission to or approval of the other Party, either Party may issue press
releases or public announcements which incorporate information concerning this
Agreement, any Ancillary Agreement or any actions or activities contemplated
hereunder or thereunder which information was included in a press release or
public disclosure which was previously disclosed under the terms of this
Agreement or which contains only non-material factual information regarding the
Collaboration. Except as required by a Governmental Authority or applicable Law
(including the rules and regulations of any stock exchange or trading market on
which a Party's (or its parent entity's) securities are traded), or in
connection with the enforcement of this Agreement, neither Party (or their
respective Affiliates) shall disclose to any Third Party, under any
circumstances, any financial terms of this Agreement that have not been
previously disclosed publicly pursuant to this Article XVI without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed; except for disclosures to Third Parties that are bound by
obligations of confidentiality and nonuse substantially equivalent in scope to
those included herein with a term of at least five (5) years. The Parties,
through the Committees, shall establish mechanisms and procedures to ensure that
there are coordinated timely corporate communications relating to the Licensed
Products in the Field. Sanofi acknowledges that Regeneron as a publicly traded
company may be legally obligated to make timely disclosures of material events
relating to Licensed Products. The Parties acknowledge that either or both
Parties may be obligated to file a copy of this Agreement and each Ancillary
Agreement with the United States Securities and Exchange Commission or its
equivalent in the Territory. Each Party will be entitled to make such filing but
shall use reasonable efforts to obtain confidential treatment of confidential,
including trade secret, information in accordance with applicable Law. The
filing Party will provide the non-filing Party with an advance copy of the
Agreement marked to show provisions for which the filing Party intends to seek
confidential treatment and will reasonably consider the non-filing Party's
timely comments thereon. 

     

    72 

     

    

    
    

    ARTICLE XVII
INDEMNITY 

     

              17.1 Indemnity and Insurance. 

     

              (a) Sanofi will defend, indemnify and hold harmless Regeneron, its Affiliates
and their respective officers, directors, employees, licensees and agents
("Regeneron Indemnitees") from and against all claims, demands,
liabilities, damages, penalties, fines, costs and expenses, including reasonable
attorneys' and expert fees and costs, and costs or amounts paid to settle
(collectively, "Damages"), arising from or occurring as a result of a
Third Party's claim, action, suit, judgment or settlement against a Regeneron
Indemnitee that is due to or based upon: 

     

              (i) the gross negligence, recklessness, bad faith, intentional wrongful acts
or omissions or violations of Law by or of Sanofi, its Affiliates or their
respective directors, officers, employees, agents or Sublicensees, including,
without limitation, in connection with the Development, Manufacture or
Commercialization of any Licensed Product in the Field, except to the extent
that Damages arise out of, and are allocable to, the gross negligence,
recklessness, bad faith, intentional wrongful acts or omissions or violations of
Law committed by Regeneron or any other Regeneron Indemnitee; or 

     

              (ii) material breach by Sanofi of the terms of, or the inaccuracy when made of
any representation or warranty made by it in, this Agreement. 

     

              (b) Regeneron will defend, indemnify and hold harmless Sanofi, its Affiliates
and their respective officers, directors, employees, Sublicensees and agents
("Sanofi Indemnitees") from and against all Damages arising from
or occurring as a result of a Third Party's claim, action, suit, judgment or
settlement against a Sanofi Indemnitee that is due to or based upon:

     

              (i) the gross negligence, recklessness, bad faith, intentional wrongful acts
or omissions or violations of Law by or of Regeneron, its Affiliates or their
respective directors, officers, employees, licensees or agents including,
without limitation, in connection with the Development, Manufacture or
Commercialization of any Licensed Product in the Field, except to the extent
that Damages arise out of, and are allocable to, the gross negligence,
recklessness, bad faith, intentional wrongful acts, or omissions or violations
of Law committed by Sanofi or any other Sanofi Indemnitee; or 

     

              (ii) material breach by Regeneron of the terms of, or the inaccuracy when made
of any representation or warranty made by it in, this Agreement. 

     

    73 

     

    

    
    

              (c) In the event of any Third Party claim alleging that the Development, Manufacture and/or
Commercialization of any Licensed Product in the Field under this Agreement
infringes a Patent Right of a Third Party for which neither Party is entitled to
indemnification hereunder, each Party shall indemnify the other Party for fifty
percent (50%) of all Damages therefrom and during the Term such Damages shall be
treated as Other Shared Expenses. 

     

              (d) In the event of any Third Party product liability claim alleging that the
Development or Commercialization of any Licensed Product in the Field causes
damages for which neither Party is entitled to indemnification hereunder, each
Party shall indemnify the other for fifty percent (50%) of all Damages therefrom
and during the Term such Damages shall be treated as Other Shared Expenses.

     

              (e) Each of Regeneron and Sanofi will use Commercially Reasonable Efforts to
procure and maintain during the Term and for a minimum period of five (5) years
thereafter and for an otherwise longer period as may be required by applicable
Law in countries where the project is conducted, product liability insurance in
an amount not less than *************************** in the annual aggregate.
Such insurance shall insure against liability on the part of Regeneron and
Sanofi and any of its Affiliates, due to injury, disability or death of any
person or persons, or property damage arising from services performed under this
Agreement.

     

              (f) Notwithstanding anything to the contrary in this Section 17.1, neither
Party shall be responsible to indemnify the other Party (or the Regeneron
Indemnitees or Sanofi Indemnitees, as the case may be) from Third Party claims
resulting from, and to the extent allocable to, the negligence, recklessness,
bad faith, intentional wrongful acts or omissions, or violations of Law
committed by Third Parties contracted to Manufacture any part of the Clinical
Supply Requirements or Commercial Supply Requirements pursuant to Article VIII;
provided, however, that nothing in this Section 17.1(f) limits either Party's
indemnification obligations to the extent any Third Party claims arise from the
negligence, recklessness, bad faith, intentional wrongful acts or omissions, or
violations of Law committed directly by the Party that is responsible for
contracting with such Third Party Manufacturer(s) pursuant to Article VIII.

     

              17.2 Indemnity Procedure. The Party entitled to indemnification under
this Article XVII (an "Indemnified Party") shall notify the Party potentially
responsible for such indemnification (the "Indemnifying Party") within five (5) Business Days of becoming
aware of any claim or claims asserted or threatened against the Indemnified
Party which could give rise to a right of indemnification under this Agreement;
provided, however, that the failure to give such notice shall not relieve the
Indemnifying Party of its indemnity obligation hereunder except to the extent
that such failure materially prejudices its rights hereunder. For the avoidance
of doubt, the indemnification procedures in this Section 17.2 shall not apply to
claims for which each Party indemnifies the other Party for fifty percent (50%)
of all Damages, under the terms of Section 17.1(c).

     

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              (a) If the Indemnifying Party has acknowledged in writing to the Indemnified
Party the Indemnifying Party's responsibility for defending such claim, the
Indemnifying Party shall have the right to defend, at its sole cost and expense,
such claim by all appropriate proceedings, which proceedings shall be prosecuted
diligently by the Indemnifying Party to a final conclusion or settled at the
discretion of the Indemnifying Party; provided, however, that the Indemnifying
Party may not enter into any compromise or settlement unless (i) such compromise
or settlement includes as an unconditional term thereof, the giving by each
claimant or plaintiff to the Indemnified Party of a release from all liability
in respect of such claim; and (ii) such compromise or settlement does not (A)
include any admission of legal wrongdoing by the Indemnified Party, (B) require
any payment by the Indemnified Party that is not indemnified hereunder or (C)
result in the imposition of any equitable relief against the Indemnified Party.
If the Indemnifying Party does not elect to assume control of the defense of a
claim or if a good faith and diligent defense is not being or ceases to be
materially conducted by the Indemnifying Party, the Indemnified Party shall have
the right, at the expense of the Indemnifying Party, upon ten (10) Business
Days' prior written notice to the Indemnifying Party of its intent to do so, to
undertake the defense of such claim for the account of the Indemnifying Party
(with counsel reasonably selected by the Indemnified Party and approved by the
Indemnifying Party, such approval not unreasonably withheld or delayed);
provided that the Indemnified Party shall keep the Indemnifying Party apprised
of all material developments with respect to such claim and promptly provide the
Indemnifying Party with copies of all correspondence and documents exchanged by
the Indemnified Party and the opposing party(ies) to such litigation. The
Indemnified Party may not compromise or settle such litigation without the prior
written consent of the Indemnifying Party, such consent not to be unreasonably
withheld or delayed. 

     

              (b) The Indemnified Party may participate in, but not control, any defense or
settlement of any claim controlled by the Indemnifying Party pursuant to this
Section 17.2 and shall bear its own costs and expenses with respect to such
participation; provided, however, that the Indemnifying Party shall bear such
costs and expenses if counsel for the Indemnifying Party shall have reasonably
determined that such counsel may not properly represent both the Indemnifying
Party and the Indemnified Party. 

     

              (c) The amount of any Damages for which indemnification is provided under
this Article XVII will be reduced by the insurance proceeds received, and any
other amount recovered if any, by the Indemnified Party in respect of any such
Damages. 

     

              (d) If an Indemnified Party receives an indemnification payment pursuant to
this Article XVII and subsequently receives insurance proceeds from its insurer
with respect to the Damages in respect of which such indemnification payment(s)
was made, the Indemnified Party will promptly pay to the Indemnifying Party an
amount equal to the difference (if any) between (i) the sum of such insurance
proceeds or other amounts received, and the indemnification payment(s) received
from the Indemnifying Party pursuant to this Article XVII and (ii) the amount
necessary to fully and completely indemnify and hold harmless the Indemnified
Party from and against such Damages. However, in no event will such refund ever
exceed the Indemnifying Party's indemnification payment(s) to the Indemnified
Party under this Article XVII.

     

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    ARTICLE XVIII
FORCE MAJEURE

     

         Neither Party will be held liable or responsible to the other Party nor
be deemed to have defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of this Agreement when such failure
or delay is caused by or results from causes beyond the reasonable control of
the affected Party including, without limitation, embargoes, acts of terrorism,
acts of war (whether war be declared or not), insurrections, strikes, riots,
civil commotions or acts of God ("Force Majeure"). Such excuse from liability and
responsibility shall be effective only to the extent and duration of the
event(s) causing the failure or delay in performance and provided that the
affected Party has not caused such event(s) to occur. The affected Party will
notify the other Party of such Force Majeure circumstances as soon as reasonably
practical and will make every reasonable effort to mitigate the effects of such
Force Majeure circumstances. 

     

    ARTICLE XIX
TERM AND TERMINATION

     

              19.1 Term/Expiration of Term. 

     

              (a) The "Term" of this Agreement commenced on the Original
Effective Date and, unless this Agreement is earlier terminated in its entirety
in accordance with this Article XIX, shall expire upon the later to occur of (i)
the expiration of the Discovery Program, and (ii) such time as neither Party,
nor either Party's Affiliates or Sublicensees, is Developing or Commercializing
any Licensed Product in the Field in the Territory under this Agreement and such
cessation of Development and Commercialization activities is acknowledged by
both Parties in writing to be permanent. 

     

              (b) Upon expiration of the Term pursuant to Section 19.1(a) above, except as
set forth in this Agreement, all licenses and rights with respect to Licensed
Products shall automatically terminate and revert to the granting
Party.

     

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              19.2 Termination Without Cause.

     

              (a) By Sanofi. (i) Sanofi may terminate this Agreement in
its entirety, but only after the expiration or earlier termination of the
Discovery Program in accordance with the terms of the Discovery Agreement, or
may terminate this Agreement in the entire Territory for a particular Licensed
Product or particular Licensed Products in the Field, in any such case on twelve
(12) months' prior written notice to Regeneron. Except as otherwise provided
below in this Section 19.2(a), in the event of such termination by Sanofi
of this Agreement in its entirety or with respect to one or more Licensed
Product(s) pursuant to this Section 19.2, this Agreement (including, without
limitation, all payment obligations hereunder) shall continue in full force and
effect through the notice period set forth above (the "Sanofi Termination Notice
Period") and the terms of
Schedule 4 (including the grant of rights and licenses set forth in paragraph 2
thereof) shall automatically apply. Except as set forth in this Section 19.2(a)
or Schedule 4, during the Sanofi Termination Notice Period, the Parties shall
continue to Develop, Manufacture and Commercialize Licensed Products (including
the Opt-Out Products(s)) in the Field in accordance with Plans. During the
Sanofi Termination Notice Period, to the extent set forth or requested in one or
more written notices from Regeneron to Sanofi hereunder and in any event upon
the expiration of the Sanofi Termination Notice Period, whether or not any such
notice is given by Regeneron, (i) the licenses and rights granted by Regeneron
to Sanofi hereunder with respect to the Opt-Out Product(s) shall automatically
terminate as of a date specified in such notice(s) (and in any event not later
than the expiration of the Sanofi Termination Notice Period), (ii) the licenses
and rights granted by Sanofi to Regeneron hereunder with respect to the Opt-Out
Product(s) shall terminate, and (iii) Sanofi will promptly take the actions
required by Schedule 4 and Regeneron will reasonably cooperate with Sanofi (for
avoidance of doubt, such cooperation shall not require Regeneron to pay any
amounts or incur any liabilities or obligations not otherwise required hereunder
to be paid or incurred by Regeneron) to facilitate Regeneron's (or its
nominee's) expeditious assumption during the Sanofi Termination Notice Period
and thereafter, with as little disruption as reasonably possible, of the
continued Development, Manufacture and Commercialization of the Opt-Out
Product(s) in the Field in the Territory. In addition, during the Sanofi
Termination Notice Period, neither Party will, without the prior written consent
of the other Party's representatives on the applicable Committee, propose or
implement any amendment or change to any Plan. Notwithstanding the foregoing,
the Committee(s) will have an obligation under this Agreement and the
Collaboration Purpose to propose and adopt in a timely manner an interim Plan
for any Plan that expires during the Sanofi Termination Notice Period. The most
recent approved Plan(s) shall be extended pending approval of the new interim
Plan(s).

     

              (ii) In addition to Sanofi's termination rights set forth in Section
19.2(a)(i), from and after the twelfth (12th) anniversary of the
First Commercial Sale of a Licensed Product in a country, Sanofi may, upon
twenty-four (24) months' prior written notice to Regeneron, terminate this
Agreement with respect to such Licensed Product in such country. If Sanofi
exercises such right, the provisions of Section 19.2(a)(i) (except that the
Sanofi Termination Notice Period referred to therein shall be twenty-four (24)
months rather than twelve (12) months), and Sections 19.7(a) and 19.8 shall
apply with respect to such Terminated Licensed Product in such country.

     

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              (b) By Regeneron. Regeneron may terminate this Agreement in
its entirety, but only after the expiration or earlier termination of the
Discovery Program in accordance with its terms, or may terminate this Agreement
in the entire Territory for a particular Licensed Product or particular Licensed
Products in the Field, in any such case, on twelve (12) months' prior written
notice to Sanofi. Except as otherwise provided below in this Section 19.2(b), in
the event of such termination by Regeneron of this Agreement in its entirety or
with respect to one or more Licensed Product(s) pursuant to this Section
19.2(b), this Agreement (including, without limitation, all payment obligations
hereunder) shall continue in full force and effect through the notice period set
forth above (the "Regeneron Termination
Notice Period") and the terms of Schedule 5 (including the grant of
rights and licenses set forth in paragraph 2 thereof) shall automatically apply.
Except as set forth in this Section 19.2(b) or Schedule 5, during the Regeneron
Termination Notice Period, the Parties shall continue to Develop, Manufacture
and Commercialize Licensed Products (including the Opt-Out Products(s)) in the
Field in accordance with Plans. During the Regeneron Termination Notice Period,
to the extent set forth or requested in one or more written notices from Sanofi
to Regeneron hereunder and in any event upon the expiration of the Regeneron
Termination Notice Period, whether or not any such notice is given by Sanofi,
(i) the licenses and rights granted by Sanofi to Regeneron hereunder with
respect to the Opt-Out Product(s) shall automatically terminate as of a date
specified in such notice(s) (and in any event not later than the expiration of
the Regeneron Termination Notice Period), (ii) the licenses and rights granted
by Regeneron to Sanofi hereunder with respect to the Opt-Out Products(s) shall
terminate, and (iii) Regeneron will promptly take the actions required by
Schedule 5 and Sanofi will reasonably cooperate with Regeneron (for avoidance of
doubt, such cooperation shall not require Sanofi to pay any amounts or incur any
liabilities or obligations not otherwise required hereunder to be paid or
incurred by Sanofi) to facilitate Sanofi's (or its nominee's) expeditious
assumption during the Regeneron Termination Notice Period and thereafter, with
as little disruption as reasonably possible, of the continued Development,
Manufacture and Commercialization of the Opt-Out Product(s) in the Field in the
Territory. In addition, during the Regeneron Termination Notice Period, neither
Party will, without the prior written consent of the other Party's
representatives on the applicable Committee, propose or implement any amendment
or change to any Plan. Notwithstanding the foregoing, the Committee(s) will have
an obligation under this Agreement and the Collaboration Purpose to propose and
adopt in a timely manner an interim Plan for any Plan that expires during the
Regeneron Termination Notice Period. The most recent approved Plan(s) shall be
extended pending approval of the new interim Plan(s). 

     

              19.3 Termination For Material
Breach. Upon and subject
to the terms and conditions of this Section 19.3, this Agreement shall be
terminable by a Party in its entirety or for a particular Licensed Product or
particular Licensed Products in the Field in the entire Territory, upon written
notice to the other Party, if such other Party commits a material breach of its
obligations under this Agreement with respect to such Licensed Product(s) as to
which such notice of termination is given (or all Licensed Products if such
notice of termination is with respect to this Agreement is in its entirety).
Such notice of termination shall set forth in reasonable detail the facts
underlying or constituting the alleged breach (and specifically referencing the
provisions of this Agreement alleged to have been breached), and the termination
which is the subject of such notice shall be effective ninety (90) days after
the date such notice is given unless the breaching Party shall have cured such
breach within such ninety (90) day period (or, if such material breach, by its
nature, is a curable breach but such breach is not curable within such ninety
(90) day period, such longer period not to exceed one hundred eighty (180) days
so long as the breaching party is using Commercially Reasonable Efforts to cure
such breach, in which event if such breach has not been cured, such termination
shall be effective on the earlier of the expiration of such one hundred eighty
(180) day period or such time as the breaching party ceases to use Commercially
Reasonable Efforts to cure such breach). Notwithstanding the foregoing, in the
case of breach of a payment obligation hereunder, the ninety (90) day period
referred to in the immediately preceding sentence shall instead be thirty (30)
days (and the immediately preceding parenthetical clause in the immediately
preceding sentence shall not apply). For purposes of this Section 19.3, the term
"material breach" shall mean an intentional, continuing (and uncured within the
time period described above) material breach by a Party, as determined by a
court of competent jurisdiction.

     

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              19.4 Termination for Insolvency. Either Party shall have the right to
terminate this Agreement in its entirety, by and effective immediately, upon
written notice to the other Party, if, at any time, (a) the other Party shall
file in any court or agency pursuant to any statute or regulation of any state
or country, a petition in bankruptcy or insolvency or for reorganization or for
an arrangement or for the appointment of a receiver or trustee of the Party or
of its assets, (b) if the other Party shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition shall
not be dismissed or stayed within ninety (90) days after the filing thereof or
(c) if the other Party shall make a general assignment for the benefit of
creditors. In the event that this Agreement is terminated or rejected by a Party
or its receiver or trustee under applicable bankruptcy Laws due to such Party's
bankruptcy, then all rights and licenses granted under or pursuant to this
Agreement by such Party to the other Party are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code and any similar
Laws in any other country in the Territory, licenses of rights to "intellectual
property" as defined under Section 101(35A) of the U.S. Bankruptcy Code. The
Parties agree that all intellectual property rights licensed hereunder,
including, without limitation, any patents or patent applications in any country
of a party covered by the license grants under this Agreement, are part of the
"intellectual property" as defined under Section 101(52) of the Bankruptcy Code
subject to the protections afforded the non-terminating Party under Section
365(n) of the Bankruptcy Code, and any similar law or regulation in any other
country. 

     

              19.5 Termination for Breach of Standstill or
Lock-Up. Regeneron shall
have the unilateral right to terminate this Agreement in its entirety, effective
immediately upon written notice to Sanofi, if Sanofi or any of its Affiliates
shall have breached their obligations under any of Sections 3, 4 or 5 of the
Investor Agreement (to the extent such sections of the Investor Agreement is
then in effect). Furthermore, Regeneron shall have the unilateral right to
terminate this Agreement in its entirety, effective immediately upon written
notice to Sanofi, if Sanofi or any of its Affiliates shall have (a) breached
their obligations under Section 20.16 of the Aventis Collaboration Agreement, to
the extent that such Section 20.16 remains in effect after the Effective Date,
or (b) breached its obligations under Section 5.3 of the Aventis Stock Purchase
Agreement, to the extent that such Section 5.3 remains in effect after the
Effective Date. Any such breach of the Investor Agreement, the Aventis Stock
Purchase Agreement or the Aventis Collaboration Agreement, as the case may be,
shall be treated as a breach of this Agreement. Notwithstanding the foregoing
and for the avoidance of doubt, Regeneron shall not have the right to terminate
this Agreement as a result of (i) a de minimus breach of Section 3.1(a) of the
Investor Agreement (to the extent such Section 3.1(a) is in effect after the
Effective Date) or of Section 20.16(a) of the Aventis Collaboration Agreement
(to the extent such Section 20.16(a) remains in effect after the Effective Date)
or (ii) an inadvertent breach of Section 3.1(g) of the Investor Agreement (to
the extent such Section 3.1(g) is in effect after the Effective Date) or an
inadvertent breach of Section 20.16(g) of the Aventis Collaboration Agreement
(to the extent such Section 20.16(g) remains in effect after the Effective
Date), arising from informal discussions covering general corporate or other
business matters the purpose of which is not intended to effectuate or lead to
any of the actions referred to in paragraphs (a) through (e) of such Section
20.16 or of paragraphs (a) through (e) of Section 3.1 of the Investor Agreement,
as applicable.

     

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              19.6 Termination of Discovery
Agreement. 

     

              (a) By Regeneron. Regeneron may terminate this Agreement in
its entirety, effective upon written notice to Sanofi, if the Discovery
Agreement has been terminated by Regeneron pursuant to Section 12.2, 12.3 or
12.4 thereof. 

     

              (b) By Sanofi. Sanofi may terminate this Agreement in its
entirety effective upon written notice to Regeneron, if the Discovery Agreement
has been terminated by Sanofi pursuant to Section 12.2 or 12.3
thereof.

     

              19.7 Effect of Termination. 

     

              (a) Except as provided in Section 19.2(b), and in Section 19.7(b) below, upon
termination of this Agreement with respect to all Licensed Products in the
Field, or for a particular Licensed Product or particular Licensed Products in
the Field in the Territory or, if applicable pursuant to Section 19.2(a)(ii), in
one or more countries, the provisions of Schedule 4 shall apply (including
during any applicable Termination Notice Period) with respect to the Terminated
Licensed Product(s), and except to the extent required by Sanofi to fulfill its
obligations pursuant to Schedule 4, (i) all licenses and rights granted by
Regeneron to Sanofi hereunder with respect to the Terminated Licensed Product(s)
shall automatically terminate, and revert to Regeneron, (ii) all licenses and
rights granted by Sanofi to Regeneron hereunder with respect to the Terminated
Licensed Product(s) shall automatically terminate and (iii) the license from
Sanofi and its Affiliates to Regeneron referred to in Schedule 4 shall
automatically come into full force and effect with respect to the Terminated
Licensed Product(s). If Regeneron terminates this Agreement pursuant to Section
19.3, 19.4 or 19.5, or pursuant to Section 19.6(a) then Sanofi shall pay to
Regeneron, in addition to any other amount payable by Sanofi to Regeneron under
this Agreement, under Law, or pursuant to any contractual remedies available to
Regeneron, an amount equal to one hundred percent (100%) of the Development
Costs incurred by Regeneron under the Global Development Plan during the period
commencing on the effective date of such termination of this Agreement pursuant
to any of such Sections and ending on the twelve (12) month anniversary of such
date. 

     

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              (b) Upon termination of this Agreement by
Regeneron pursuant to Section 19.2(b) or by Sanofi pursuant to Section 19.3 or
19.4, in its entirety, or for a particular Licensed Product or particular
Licensed Products in the Field, the provisions of Schedule 5 shall apply
(including during any applicable Termination Notice Period) with respect to the
Terminated Licensed Product(s) and, except to the extent required by Regeneron
to fulfill its obligations pursuant to Schedule 5, (i) all licenses and rights
granted by Sanofi to Regeneron hereunder with respect to the Terminated Licensed
Product(s) shall automatically terminate, and revert to Sanofi, (ii) all
licenses and rights granted by Regeneron to Sanofi hereunder with respect to the
Terminated Licensed Product(s) shall automatically terminate and (iii) the
license from Regeneron referred to in Schedule 5 shall come into full force and
effect with respect to the Terminated Licensed Product(s)

     

              19.8 Survival of Obligations. Except as otherwise provided in this Article
XIX, or Schedule 4 or Schedule 5, upon expiration, or upon termination of this
Agreement with respect to all Licensed Products in the Field, or for a
particular Licensed Product or particular Licensed Products in the Field in the
Territory or, if applicable pursuant to Section 19.2(a)(ii), in one or more
countries, the rights and obligations of the Parties hereunder with respect to
the Terminated Licensed Product(s), in the applicable country or countries if
such termination is pursuant to Section 19.2(a)(ii), shall terminate, and this
Agreement shall cease to be of further force or effect to the extent of such
termination, provided that notwithstanding any expiration or termination of this
Agreement: 

     

              (a) neither Sanofi nor Regeneron shall be relieved of any obligations
(including payment obligations) of such Party arising prior to such expiration
or termination, including, without limitation, the payment of any non-cancelable
costs and expenses incurred as part of a Plan (even if such costs and expenses
arise following termination or expiration, as the case may be), except that
Regeneron's obligations with respect to the Global Development Balance payments
provided for in Schedule 2 shall automatically terminate and the Global
Development Balance shall equal zero; 

     

              (b) subject to the provisions of this Article XIX, including Schedule 4 and
Schedule 5 to the extent applicable, the obligations of the Parties with respect
to the protection and nondisclosure of Party Information and New Information in
accordance with Article XVI, as well as other provisions (including, without
limitation, Sections 7.4, 9.8, 9.9, 9.12, 10.3 and 10.4, the second sentence of
Section 12.1(e) and Articles XII (with respect to Joint Inventions), XVI, XVII,
XIX and XX) which by their nature are intended to survive any such expiration or
termination, shall survive and continue to be enforceable; and 

     

              (c) such expiration or termination and this Article XIX shall be without
prejudice to any rights or remedies a party may have for breach of this
Agreement.  

     

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    ARTICLE XX
MISCELLANEOUS

     

              20.1 Governing Law; Submission to
Jurisdiction. This
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York, without regard to the conflict of laws principles
thereof that would require the application of the Law of any other jurisdiction.
Except as set forth in Article X, the Parties irrevocably and unconditionally
submit to the exclusive jurisdiction of the United States District Court for the
Southern District of New York solely and specifically for the purposes of any
action or proceeding arising out of or in connection with this Agreement.

     

              20.2 Waiver. Waiver by a Party of a breach hereunder by
the other Party shall not be construed as a waiver of any subsequent breach of
the same or any other provision. No delay or omission by a Party in exercising
or availing itself of any right, power or privilege hereunder shall preclude the
later exercise of any such right, power or privilege by such Party. No waiver
shall be effective unless made in writing with specific reference to the
relevant provision(s) of this Agreement and signed by a duly authorized
representative of the Party granting the waiver. 

     

              20.3 Notices. All notices, instructions and other
communications required or permitted hereunder or in connection herewith shall
be in writing, shall be sent to the address of the relevant Party set forth on
Schedule 6 attached hereto and shall be (a) delivered personally, (b) sent via a
reputable nationwide overnight courier service, or (c) sent by facsimile
transmission, with a confirmation copy to be sent by registered or certified
mail, return receipt requested, postage prepaid. Any such notice, instruction or
communication shall be deemed to have been delivered upon receipt if delivered
by hand, one (2) Business Days after it is sent via a reputable nationwide
overnight courier service or when transmitted with electronic confirmation of
receipt, if transmitted by facsimile (if such transmission is made during
regular business hours of the recipient on a Business Day; or otherwise, on the
next Business Day following such transmission). Either Party may change its
address by giving notice to the other Party in the manner provided above.

     

              20.4 Entire Agreement. This Agreement, together with the Discovery
Agreement and, solely to the extent referred to herein, the Ancillary Agreements
contain the complete understanding of the Parties with respect to the subject
matter hereof and thereof and supersedes all prior understandings and writings
relating to the subject matter hereof and thereof, provided that the last
sentence of Section 14.4 of the Discovery Agreement shall apply with respect to
any conflict or inconsistency between this Agreement and the Discovery
Agreement. 

     

              20.5 Amendments. No provision in this Agreement shall be
supplemented, deleted or amended except in a writing executed by an authorized
representative of each of Sanofi and Regeneron. 

     

              20.6 Interpretation. The captions to the several Articles and
Sections of this Agreement are included only for convenience of reference and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, this Agreement. In this Agreement: (a) the word "including"
shall be deemed to be followed by the phrase "without limitation" or like
expression; (b) references to the singular shall include the plural and vice
versa; (c) references to masculine, feminine and neuter pronouns and expressions
shall be interchangeable; and (d) the words "herein" or "hereunder" relate to
this Agreement. 

     

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              20.7 Severability. If, under applicable Laws, any provision
hereof is invalid or unenforceable, or otherwise directly or indirectly affects
the validity of any other material provision(s) of this Agreement in any
jurisdiction ("Modified Clause"), then, it is mutually agreed that this
Agreement shall endure and that the Modified Clause shall be enforced in such
jurisdiction to the maximum extent permitted under applicable Laws in such
jurisdiction; provided that the Parties shall consult and use all reasonable
efforts to agree upon, and hereby consent to, any valid and enforceable
modification of this Agreement as may be necessary to avoid any unjust
enrichment of either Party and to match the intent of this Agreement as closely
as possible, including the economic benefits and rights contemplated herein.

     

              20.8 Registration and Filing of the
Agreement. To the extent
that a Party concludes in good faith that it is or may be required to file or
register this Agreement or a notification thereof with any Governmental
Authority in accordance with applicable Laws, such Party may do so subject to
the provisions of Section 16.4. The other Party shall promptly cooperate in such
filing or notification and shall promptly execute all documents reasonably
required in connection therewith. The Parties shall promptly inform each other
as to the activities or inquiries of any such Governmental Authority relating to
this Agreement, and shall promptly cooperate to respond to any request for
further information therefrom.

     

              20.9 Assignment. Except as otherwise expressly provided
herein, neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Sanofi or Regeneron without (a) the prior written
consent of Regeneron in the case of any assignment by Sanofi or (b) the prior
written consent of Sanofi in the case of an assignment by Regeneron, except in
each case (i) to an Affiliate of the assigning Party that has and will continue
to have the resources and financial wherewithal to fully meet its obligations
under this Agreement, provided that the assigning Party shall remain primarily
liable hereunder notwithstanding any such assignment, or (ii) to any other party
who acquires all or substantially all of the business of the assigning Party by
merger, sale of assets or otherwise, so long as such Affiliate or other party
agrees in writing to be bound by the terms of this Agreement. The assigning
Party shall remain primarily liable hereunder notwithstanding any such
assignment. Any attempted assignment in violation hereof shall be void.

     

              20.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns, and shall also inure to the benefit of the Regeneron
Indemnitees and Sanofi Indemnitees to the extent provided in the last sentence
of Section 20.13. 

     

              20.11 Affiliates. Each Party may, and to the extent it is in
the best interests of the Licensed Products in the Field in the Territory shall,
perform its obligations hereunder through one or more of its Affiliates. Each
Party absolutely, unconditionally and irrevocably guarantees to the other Party
the prompt and timely performance when due and at all times thereafter of the
responsibilities, liabilities, covenants, warranties, agreements and
undertakings of its Affiliates pursuant to this Agreement. Sanofi Amerique
guarantees to Regeneron the prompt and timely payment of amounts payable by
Sanofi to Regeneron hereunder once those amounts have become legally due and
payable. Without limiting the foregoing, no Party shall cause or permit any of
its Affiliates to commit any act (including any act or omission) which such
Party is prohibited hereunder from committing directly. If an Affiliate of a
Party will engage in the Development, Manufacture or Commercialization of a
Licensed Product under this Agreement, then such Party shall enter into a
separate agreement with such Affiliate pursuant to which the obligations of such
Party hereunder shall be binding on such Affiliate and which shall provide that
the other Party is a third-party beneficiary of such agreement entitled to
enforce such agreement and this Agreement against such Affiliate. Each Party
represents and warrants to the other Party that it has licensed or will license
from its Affiliates the Patents and Know-How owned by its Affiliates that are to
be licensed (or sublicensed) to the other Party under this Agreement.

     

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              20.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument. 

     

              20.13 Third-Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party, including any
creditor of any Party hereto. No Third Party shall obtain any right under any
provision of this Agreement or shall by reason of any such provision make any
claim in respect of any debt, liability or obligation (or otherwise) against any
Party hereto. Notwithstanding the foregoing, Article XVII is intended to
benefit, in addition to the Parties, the other Regeneron Indemnitees and Sanofi
Indemnitees as if they were parties hereto, but this Agreement is enforceable
only by the Parties. 

     

              20.14 Relationship of the Parties. Each Party shall bear its own costs incurred
in the performance of its obligations hereunder without charge or expense to the
other Party except as provided for in this Agreement. Neither Sanofi nor
Regeneron shall have any responsibility for the hiring, termination or
compensation of the other Party's employees or for any employee compensation or
benefits of the other Party's employees. No employee or representative of a
Party shall have any authority to bind or obligate the other Party to this
Agreement for any sum or in any manner whatsoever, or to create or impose any
contractual or other liability on the other Party without said Party's approval.
For all purposes, and notwithstanding any other provision of this Agreement to
the contrary, Regeneron's legal relationship under this Agreement to Sanofi, and
Sanofi's legal relationship under this Agreement to Regeneron, shall be that of
an independent contractor. Nothing in this Agreement shall be construed to
establish a relationship of partners or joint ventures between the Parties or
any of their respective Affiliates. 

     

              20.15 Limitation of Damages. IN NO EVENT SHALL REGENERON OR SANOFI BE
LIABLE FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY,
REGARDLESS OF THE THEORY OF LIABILITY (INCLUDING CONTRACT, TORT, NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE) AND REGARDLESS OF ANY PRIOR NOTICE OF SUCH
DAMAGES. HOWEVER, NOTHING IN THIS SECTION 20.15 IS INTENDED TO LIMIT OR RESTRICT
THE INDEMNIFICATION RIGHTS AND OBLIGATIONS OF EITHER PARTY HEREUNDER WITH RESPECT TO THIRD-PARTY CLAIMS.

     

              20.16 Non-Solicitation. During the Term and for a period of two (2)
years thereafter, neither Party shall solicit or otherwise induce or attempt to
induce any employee of the other Party directly involved in the Development,
Manufacture or Commercialization of any Licensed Product to leave the employment of the other Party and accept
employment with the first Party. Notwithstanding the foregoing, this prohibition
on solicitation does not apply to actions taken by a Party solely as a result of
an employee's affirmative response to a general recruitment effort carried
through a public solicitation or general solicitation. 

     

              20.17 No Strict Construction. This Agreement has been prepared jointly and
will not be construed against either Party. 

     

    [Remainder of page intentionally left blank;
signature page follows] 

     

    84 

     

    

    
    

         IN WITNESS WHEREOF, Sanofi, Sanofi Amerique and Regeneron have caused
this Agreement to be executed by their duly authorized representatives as of the
day and year first above written. 

     

    
      	
            	AVENTIS PHARMACEUTICALS INC.	
            
	
            	 	 
	
            	 	
            
	
            	By	/s/ John M.
      Spinnato	
            
	
            	Name:   	John M. Spinnato	
            
	
            	Title:	VP & General Counsel, US Legal	
            
	
            	 	
            
	
            	 	
            
	
            	 	
            
	
            	By	/s/ Christian
      Blin	
            
	
            	Name:	Christian Blin	
            
	
            	Title:	VP, R&D Finance	
            
	
            	 	
            
	
            	 	
            
	
            	 	
            
	
            	SANOFI-AVENTIS AMERIQUE DU
NORD	
            
	
            	(solely for purposes of Section 15.1,
      15.2 and 20.11).	
            
	
            	 	
            	
            
	
            	 	
            
	
            	 	
            
	
            	By	/s/ Jose
    Ferrer	
            
	
            	Name:	Jose Ferrer	
            
	
            	Title:	VP, Legal Operations	
            
	
            	 	
            
	
            	 	
            
	
            	 	
            
	
            	By	/s/ Christian
      Blin	
            
	
            	Name:	Christian Blin	
            
	
            	Title:	VP, R&D Finance	
            
	
            	 	
            
	
            	 	
            
	
            	 	
            
	
            	REGENERON PHARMACEUTICALS,
INC.	
            
	
            	 	
            
	
            	 	
            
	
            	By	/s/ Murray
      Goldberg	
            
	
            	Name:	Murray A. Goldberg	
            
	
            	Title:	Senior Vice President, Finance &	
            
	
            	Administration and Chief Financial
      Officer	
            

    

    

    
    

    EXHIBIT A 

     

    Royalties For Opt-Out
Products 

     

    
       

      
        	Stage of Development at
      Opt-Out	Royalties on Net Sales
	 	
              
	***************	*****
	 	
              
	***************	*****

      

       

    

    1 

     

    

    
    

    SCHEDULE 1

     

    Manufacturing Cost 

     

    ************************************* 

     

     

     

     

     

    1 

     

    

    
    

    SCHEDULE 2

     

    Quarterly True-Up 

     

    At the end of each
Quarter, the Parties will calculate the net payment one Party shall be required
to make to the other Party (the "Quarterly True-Up") equal to (a) the U.S. Profit Split for such
Quarter payable to Regeneron (as set forth in Part I), plus (b) the Rest of
World Profit Split for such Quarter payable to Regeneron (as set forth in Part
II), minus (c) the Development Compensation Payment for such Quarter payable to
Sanofi (as set forth in Part III), plus or minus (d) the Regeneron Reimbursement
Amount for such Quarter payable to either Regeneron or Sanofi (as set forth in
Part IV).

     

    In the event that the
Quarterly True-Up is an amount greater than zero, such amount shall be payable
by Sanofi to Regeneron in accordance with the terms set forth in Article 9. In
the event that the Quarterly True-Up is an amount less than zero, the absolute
value of such amount shall be payable by Regeneron to Sanofi in accordance with
the terms set forth in Article 9. An example of the Quarterly True-Up is shown
in Part V. 

     

    I. U.S. PROFIT SPLIT 

     

    The "U.S. Profit Split" shall mean fifty percent (50%) of U.S.
Profits in a Quarter. "U.S. Profits" in a Quarter shall mean aggregate Net Sales
of all Licensed Products in the U.S. in the Quarter less the sum of (a)
aggregate COGS in the U.S. in the Quarter, (b) aggregate Shared Commercial
Expenses incurred by both Parties and allocable to the U.S. in the Quarter, and
(c) aggregate Other Shared Expenses incurred by both Parties and allocable to,
the U.S. in the Quarter.

     

    An example of a
calculation of the U.S. Profit Split in a Quarter would be: 

     

    ****************************** 

     

    II. REST OF WORLD PROFIT SPLIT 

     

    The Parties intend to
share profits from Net Sales of Licensed Products in the Rest of World (or ROW)
in each Contract Year (the "Rest of World Profit Split," defined below) based on
the aggregate amount of such Net Sales in accordance with the Target ROW Profit
Split (defined below). Since the full calculation cannot be done until aggregate
Net Sales for the full Contract Year are known, each Quarter, the Parties will
calculate an estimated profit split for the Quarter based on Net Sales for the
Quarter in ROW and the Applicable ROW Percentages (defined below). Following the
end of each Contract Year, the Parties will true-up the quarterly estimates of
the Rest of World Profit Split to the Target ROW Profit Split through the ROW
Profit Split Annual True-Up calculation (defined below).

     

    1 

     

    

    
    

    The "Target ROW Profit Split" for any Contract Year shall mean a profit
split whereby ROW Profits from ROW Net Sales of all Licensed Products up to
********** in the Contract Year are split 65% Sanofi/35% Regeneron, and ROW
Profits from ROW Net Sales of all Licensed Products from ************* up to
$750 million in the Contract Year are split 60% Sanofi/40% Regeneron, and ROW
Profits from ROW Net Sales of all Licensed Products greater than $750 million in
the Contract Year are split 55% Sanofi/45% Regeneron, with all profit splits
calculated using the assumption that the ratio of ROW Profits to ROW Net Sales
is the same on each dollar of ROW Net Sales in the Contract Year. 

     

    The "Rest of World Profit Split" (or "ROW Profit Split") for a Quarter shall mean
***********************. 

     

    The "Applicable ROW Percentages" for the Quarter for each of Sanofi and
Regeneron shall mean the percentages to be used to calculate each Party's Rest
of World Profit Split for the Quarter, as illustrated in the example below. At
the end of each Contract Year, as part of the calculation of the fourth Quarter
Rest of World Profit Split, a "ROW Profit Split Annual
True-Up" shall also be
calculated to make each Party's Rest of World Profit Split for the Contract Year
equal to the Target ROW Profit Split. Calculation of the Applicable ROW
Percentages and Rest of World Profit Splits for a Quarter and ROW Profit Split
Annual True-Up for a Contract Year are illustrated in the example below.

     

    ************************

     

    Notwithstanding the
method of calculation shown above, in any Quarter (or for any full Contract
Year) in which the ROW Profits are negative, the Applicable ROW Percentages for
such Quarter (or for such Contract Year after calculation of the ROW Profit
Split Annual True-Up) shall be fifty-five percent (55%) for Sanofi and
forty-five percent (45%) for Regeneron.

     

    An example of a
calculation of the Rest of World Profit Split in a Quarter would be:

     

    ***************************

     

    III. DEVELOPMENT
COMPENSATION PAYMENT 

     

    The "Regeneron Profit Split" in a Quarter shall mean the sum of (a) the
U.S. Profit Split for such Quarter payable to Regeneron plus (b) the Rest of
World Profit Split for such Quarter payable to Regeneron. 

     

    The "Development Balance" as of the end of a Quarter shall mean (a)
fifty percent (50%) of the aggregate amount of Development Costs incurred by
both Parties under the Global Development Plans for all Licensed Products from
the Effective Date through the close of such Quarter, excluding any Shared Phase
3 Trial Costs, plus (b) thirty percent (30%) of the aggregate amount of Shared
Phase 3 Trial Costs incurred by both Parties under the Global Development Plans
for all Licensed Products from the Effective Date through the close of such
Quarter, less (c) the aggregate amount of Development Compensation Payments
included in the calculation of the Quarterly True-Up in all prior Quarters.

     

    2 

     

    

    
    

    If both the Development
Balance as of the end of a Quarter is greater than zero and the Regeneron Profit
Split for the Quarter is greater than zero, the "Development Compensation
Payment" for such Quarter shall equal the lower of
(a) ten percent (10%) of the Regeneron Profit Split for the Quarter and (b) the
Development Balance. Otherwise, the Development Compensation Payment for the Quarter shall
equal zero. 

     

    An example of a
calculation of the Development Compensation Payment in a Quarter would be:

     

    
      	Development Balance at the end of the
      Quarter	900
	 
	U.S. Profit Split payable to
      Regeneron	350
	Rest of World Profit Split payable to Regeneron	380
	Regeneron Profit Split	730
	10% of the Regeneron Profit Split	73
	 
	Development Compensation
    Payment	73

    

    For the avoidance of
doubt, the Development Costs for and Opt-Out Product until the time such Opt-Out
Product becomes an Opt-Out Product are included in the calculation of the
Development Balance.

     

    IV. REGENERON REIMBURSEMENT
AMOUNT 

     

    The "Regeneron Reimbursement
Amount" for a Quarter
shall mean (a) aggregate Shared Commercial Expenses incurred by Regeneron in the
U.S. and ROW in the Quarter for all Licensed Products, plus (b) aggregate Other
Shared Expenses incurred by Regeneron in the U.S. and ROW in the Quarter for all
Licensed Products, plus (c) Development Costs incurred by Regeneron under a
Global Development Plan in the Quarter for all Licensed Products, other than
Shared Phase 3 Trial Costs, plus (d) aggregate Shared Phase 3 Trial Costs
incurred by Regeneron under a Global Development Plan in the Quarter for all
Licensed Products minus twenty percent (20%) of the aggregate Shared Phase 3
Trial Costs incurred by both Sanofi and Regeneron under a Global Development
Plan in the Quarter for all Licensed Products (with the amount so calculated in
this clause (d) called the "Shared Phase 3 Trial Costs
Balance"). For clarity, if
the Shared Phase 3 Trial Costs Balance is negative, it shall be subtracted from
the amount otherwise payable to Regeneron as a Regeneron Reimbursement Amount,
and if the total Regeneron Reimbursement Amount is negative, it shall be a
negative number in the calculation of the Quarterly True-Up. 

     

    An example of a
calculation of the Regeneron Reimbursement Amount in a Quarter would
be:

     

    
      	Regeneron Shared Commercial Expenses in
      the U.S.	50
	Regeneron Shared Commercial Expenses in ROW	100
	Regeneron Other Shared Expenses in the
      U.S.	10
	Regeneron Other Shared Expenses in ROW	10
	Regeneron Development Costs under a
      Global Development Plan	80
	Shared Phase 3 Trial
      Costs Balance	0
	  
	Regeneron Reimbursement Amount	250

    

    
    

     

    3 

     

    

    
    

    V. EXAMPLE OF QUARTERLY
TRUE-UP 

     

    An example of a
calculation of the Quarterly True-Up in a Quarter would be:

     

    
      	U.S. Profit Split Payable to
      Regeneron	350 
	ROW Profit Split Payable to Regeneron	380 
	Development Compensation
    Payment	(73)
	Regeneron
      Reimbursement Amount	250 
	 
	Quarterly True-Up	907 

    

    In this example, Sanofi
would pay Regeneron 907 in accordance with the terms set forth in Article 9.

     

    4 

     

    

    
    

    SCHEDULE 3

     

    Sales Milestones 

     

    
      	Aggregate annual Net
    Sales	Sales
      Milestone
	of all Licensed
Products	
            
	in Rest of World
    Countries	
            
	 	
            
	US$1 billion	************
	 	
            
	**********	************
	 	
            
	**********	************
	 	
            
	**********	************
	 	
            
	**********	************

    

    For purposes of
clarification, each of the foregoing milestone payments shall be made only once
and only upon the first occurrence of each milestone. Aggregate annual Net Sales
of Licensed Products shall be determined based on the aggregate Net Sales of all
Licensed Products in Rest of World Countries in any rolling twelve (12) month
period. 

     

    1 

     

    

    
    

    SCHEDULE 4 

     

    Termination Arrangements 

     

         The rights and obligations set forth in this Schedule 4 shall apply only
to the extent of the applicable termination of this Agreement, and accordingly
such rights and obligations shall apply only with respect to the applicable
Terminated Licensed Product(s) as to which, and, if applicable pursuant to
Section 19.2(a)(ii), only in the country or countries in which, this Agreement
has been terminated.

     

         1. Sanofi shall promptly collect and return, and cause its Affiliates and
Sublicensees to collect and return, to Regeneron or, at Regeneron's request,
destroy, all documents containing New Information or Party Information directly
related to any Terminated Licensed Product(s), and shall immediately cease, and
cause its Affiliates and Sublicensees to cease, all further use of any such New
Information or Party Information with respect to any Terminated Licensed
Product(s). In addition, at Regeneron's request, Sanofi shall collect and
transfer to Regeneron any remaining inventory of Promotional Materials, sales
training materials, samples, and product inventory. Notwithstanding the
foregoing, Sanofi may retain copies of any Party Information or New Information
to the extent required by Law, as well as retain one (1) copy of such
information solely for legal archive purposes.

     

         2. Regeneron and its Affiliates
shall have a worldwide, fully paid-up, royalty-free (other than any royalties due for any Royalty
Products under the Discovery Agreement and any amounts payable to Third Parties
for any intellectual property or technology contributed to the Discovery Program
or Collaboration by Sanofi), exclusive right and license, with the right to
sublicense unless otherwise restricted by any License, under the Sanofi
Intellectual Property existing at the time notice of termination was given or at
the effective date of termination solely for the purpose of Developing,
Manufacturing and Commercializing Terminated Licensed Product(s) in the Field in
the Territory (and solely to the extent such Sanofi Intellectual Property has,
as of the date notice of termination was given, actually been incorporated into
such Licensed Product(s) or otherwise claims or covers its use), with all other
rights to such Sanofi Intellectual Property retained by Sanofi). 

     

         3. Sanofi shall use Commercially Reasonable Efforts to provide all
cooperation and assistance reasonably requested by Regeneron to enable Regeneron
(or its nominee) to assume with as little disruption as reasonably possible, the
continued Development, Manufacture, and Commercialization of the Terminated
Licensed Product(s) in the Field in the Territory. Such cooperation and
assistance shall be provided in a prompt and timely manner (having regard to the
nature of the cooperation or assistance requested) and shall include, without
limitation, the following: 

     

              (a) Sanofi shall transfer and assign to
Regeneron (or its nominee) all Marketing Approvals, Pricing Approvals, and other
regulatory filings (including Registration Filings) made or obtained by Sanofi
or its Affiliates or any of its Sublicensees to the extent specifically relating
to the Terminated Licensed Product(s). 

     

    1 

     

    

    
    

              (b) Sanofi shall assign and transfer to
Regeneron (or its nominee) Sanofi's entire right, title and interest in and to
all Product Trademarks for any Terminated Licensed Product(s) and Promotional
Materials relating to the Terminated Licensed Product(s); provided that nothing
herein is intended to convey any rights in or to Sanofi's corporate name and
logos or any trade names except for the limited rights set forth
herein.

     

              (c) Sanofi shall provide to Regeneron (or its
nominee) a copy (or originals to the extent required by any Regulatory Authority
in connection with the Development, Manufacture or Commercialization of the
Terminated Licensed Product(s) in the Field in the Territory) of all information
(including any New Information) in its possession or under its control to the
extent directly relating to the Terminated Licensed Product(s) in the Field,
including, without limitation, all information contained in the regulatory
and/or safety databases, all in the format then currently maintained by Sanofi,
or such other format as may be reasonably requested by Regeneron. 

     

              (d) Sanofi shall use Commercially Reasonable
Efforts to assign to Regeneron any applicable Licenses and sublicenses to the
extent related to the Terminated Licensed Product(s) and/or contracts relating
to significant services to be performed by Third Parties to the extent related
to the Development, Manufacture or Commercialization of the Terminated Licensed
Product(s) in the Field in the Territory, as reasonably requested by Regeneron.

     

              (e) Without limitation of Sanofi's other
obligations under this Schedule 4, to the extent Sanofi or its Affiliate is
Manufacturing (in whole or in part) the Terminated Licensed Product(s) for use
in the Field in accordance with a Manufacturing Plan (or is designated to assume
such responsibilities), Sanofi (or its Affiliate) will perform such
Manufacturing responsibilities and supply Regeneron with Clinical Supply
Requirements and/or Commercial Supply Requirements of such Terminated Licensed
Product(s), and Regeneron shall purchase such Terminated Licensed Product(s), at
the same price, and on such other terms and conditions on which Sanofi was
supplying, or in the absence of termination would have been required to supply,
such Terminated Licensed Product(s), through the second anniversary of the
effective date of termination of this Agreement with respect to such Terminated
Licensed Product(s) or such shorter period if Regeneron notifies Sanofi that
Regeneron is able to Manufacture or have Manufactured such Terminated Licensed
Product(s) on comparable financial terms. 

     

         4. Without limitation of the
generality of the foregoing, the Parties shall use Commercially Reasonable Efforts to complete
the transition of the development, manufacture, and commercialization of the
Terminated Licensed Product(s) in the Field hereunder to Regeneron (or its
sublicensee or Third Party designee) as soon as is reasonably possible.

     

         5. For the avoidance of doubt,
except as expressly provided in the Discovery Agreement or this Agreement, Regeneron shall
not be required to provide Sanofi any consideration in exchange for the licenses
or other rights granted to it pursuant to the provisions of this Schedule 4;
provided, however, that Regeneron shall be solely responsible for paying any
royalties, fees or other consideration that Sanofi may be obligated to pay to a
Third Party in respect of any such transfer or sublicense to Regeneron of such
licenses or other rights. 

     

    2 

     

    

    
    

    SCHEDULE 5 

     

    Termination Arrangements 

     

         The rights and obligations set forth in this Schedule 5 shall apply only
to the extent of the applicable termination of this Agreement, and accordingly
such rights and obligations shall apply only with respect to the applicable
Terminated Licensed Product(s) as to which this Agreement has been
terminated.

     

         1. Regeneron shall promptly collect and return, and cause its Affiliates
and sublicensees to collect and return, to Sanofi or, at Sanofi's request,
destroy, all documents containing New Information or Party Information of Sanofi
and its Affiliates directly related to any Opt-Out Products, and shall
immediately cease, and cause its Affiliates and Sublicensees to cease, all
further use of any such New Information or Party Information with respect to the
Terminated Licensed Product(s). In addition, at Sanofi's request, Regeneron
shall collect and transfer to Sanofi any remaining inventory of Promotional
Materials, sales training materials, product samples and product inventory.
Notwithstanding the foregoing, Regeneron may retain copies of any Party
Information or New Information to the extent required by Law, as well as retain
one (1) copy of such information solely for legal archive purposes.

     

         2. Sanofi and its Affiliates shall have a worldwide, fully paid-up,
royalty-free (other than for amounts payable to Third Parties for any
intellectual property or technology contributed to the Discovery Program or
Collaboration by Regeneron), exclusive right and license, with the right to
sublicense unless otherwise restricted by any License, under the Regeneron
Intellectual Property existing at the time notice of termination was given or at
the effective date of termination solely for the purpose of Developing,
Manufacturing, and Commercializing the Terminated Licensed Product(s) in the
Field in the Territory (and solely to the extent such Regeneron Intellectual
Property has, as of the date notice of termination was given, actually been
incorporated into such Licensed Product(s) or otherwise claims or covers its
use), with all other rights to such Regeneron Intellectual Property retained by
Regeneron.

     

         3. Regeneron shall use Commercially Reasonable Efforts to provide all
cooperation and assistance reasonably requested by Sanofi to enable Sanofi (or
its nominee) to assume with as little disruption as reasonably possible, the
continued Development, Manufacture and Commercialization of the Terminated
Licensed Product(s) in the Field in the Territory. Such cooperation and
assistance shall be provided in a prompt and timely manner (having regard to the
nature of the cooperation or assistance requested) and shall include, without
limitation, the following: 

     

              (a) Regeneron shall transfer and assign to
Sanofi (or its nominee) all Marketing Approvals, Pricing Approvals and other
regulatory filings (including Registration Filings) made or obtained by
Regeneron or its Affiliates or any of its sublicensees to the extent
specifically relating to the Terminated Licensed Product(s). 

     

    1 

     

    

    
    

              (b) Regeneron shall assign and transfer to
Sanofi (or its nominee) Regeneron's entire right, title and interest in and to
all Product Trademarks for the Terminated Licensed Product(s) and Promotional
Materials relating to the Terminated Licensed Product(s); provided that nothing
herein is intended to convey any rights in or to Regeneron's corporate name and
logos or any trade names except for the limited rights set forth herein.

     

              (c) Regeneron shall provide to Sanofi (or its
nominee) a copy (or originals to the extent required by any Regulatory Authority
in connection with the Development, Manufacture or Commercialization of the
Terminated Licensed Product(s) in the Field in the Territory) of all information
(including any New Information) in its possession or under its control to the
extent directly relating to the Terminated Licensed Product(s) in the Field,
including, without limitation, all information contained in the regulatory
and/or safety databases, all in the format then currently maintained by
Regeneron, or such other format as may be reasonably requested by Sanofi.

     

              (d) Regeneron shall use Commercially
Reasonable Efforts to assign to Sanofi any applicable Licenses and sublicenses
to the extent related to the Terminated Licensed Product(s) and/or contracts
relating to significant services to be performed by Third Parties to the extent
related to the Development, Manufacture or Commercialization of the Terminated
Licensed Product(s) in the Field in the Territory, as reasonably requested by
Sanofi. 

     

              (e) Without limitation of Regeneron's other
obligations under this Schedule 5, to the extent Regeneron or its Affiliate is
Manufacturing (in whole or in part) the Terminated Licensed Product(s) for use
in the Field in accordance with a Manufacturing Plan (or is designated to assume
such responsibilities), Regeneron (or its Affiliate) will perform such
Manufacturing responsibilities and supply Sanofi with Clinical Supply
Requirements and/or Commercial Supply Requirements of such Terminated Licensed
Product(s), and Sanofi shall purchase such Terminated Licensed Product(s), at
the same price, and on such other terms and conditions on which Regeneron was
supplying, or in the absence of termination would have been required to supply,
such Terminated Licensed Product(s), through the second anniversary of the
effective date of termination of this Agreement with respect to such Terminated
Licensed Product(s) or such shorter period if Sanofi notifies Regeneron that
Sanofi is able to Manufacture or have Manufactured such Terminated Licensed
Product(s) on comparable financial terms. 

     

         4. Without limitation of the
generality of the foregoing, the Parties shall use Commercially Reasonable Efforts to complete
the transition of the Development, Manufacture and Commercialization of the
Terminated Licensed Product(s) in the Field hereunder to Sanofi (or its
Sublicensee or Third Party designee) as soon as is reasonably possible.

     

         5. For the avoidance of doubt, Sanofi shall not be required to provide
Regeneron any consideration in exchange for the licenses or other rights granted
to it pursuant to the provisions of this Schedule 5; provided, however, that
Sanofi shall be solely responsible for paying any royalties, fees or other
consideration that Regeneron may be obligated to pay to a Third Party in respect
of any such transfer or sublicense to Sanofi of such licenses or other rights.

     

    2 

     

    

    
    

    SCHEDULE 6

     

    Notices 

     

    
      	(a)	
            	If to Sanofi or
      Sanofi Amerique:
	 
	 	       
    	Aventis
      Pharmaceuticals Inc
200 Crossing Boulevard
Bridgewater
New Jersey
      08807
USA
Attention: President R&D
Copy: General
      Counsel
	  
	 	
            	With a copy
      to:
	 
	 	
            	sanofi-aventis
174 Avenue de France
Paris, France
      75017
Attention: General Counsel
	 
	(b)	
            	If to
      Regeneron:
	 
	 	
            	Regeneron
      Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown,
      New York 10591
U.S.A.
Attention: President
Copy: General
      Counsel
	  
	 	
            	With a copy
      to:
	 
	 	
            	Skadden, Arps,
      Slate, Meagher & Flom LLP
One Beacon Street, 31st
      Floor
Boston, Massachusetts 02108
Attention: Kent A.
  Coit

    

     

    1

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