Document:

Exhibit 10.82

Exhibit
10.82

INFOTECH
USA, INC., (formerly SYSCOMM INTERNATIONAL

CORPORATION)

2001
FLEXIBLE STOCK PLAN

1.     NAME
AND PURPOSE

 

1.1 Name.

 

The name
of this Plan is the “SysComm International Corporation 2001 Flexible Stock
Plan.”

 

1.2 Purpose.

 

The
Company has established this Plan to attract, retain, motivate and reward
Employees and other individuals, to encourage ownership of the Company’s Common
Stock by Employees and other individuals, and to promote and further the best
interests of the Company by granting cash and other awards. This Plan is
intended to be “Broadly Based” (as such term is used for purposes of rules
promulgated by The National Association of Securities Dealers).

 

2.    DEFINITIONS
OF TERMS AND RULES OF CONSTRUCTION

 

2.1 General
Definitions.

 

The
following words and phrases, when used in the Plan, unless otherwise
specifically defined or unless the context clearly otherwise requires, shall
have the following respective meanings:

 

2.1.1  Affiliate.

 

A Parent
or Subsidiary of the Company.

 

2.1.2  Agreement.

 

The
document which evidences the grant of any Benefit under the Plan and which sets
forth the Benefit and the terms, conditions and provisions of, and restrictions
relating to, such Benefit.

 

2.1.3  Benefit.

 

Any
benefit granted to a Participant under the Plan.

 

2.1.4  Board.

 

The Board
of Directors of the Company.

 

2.1.5  Cash
Award.

 

A Benefit
payable in the form of cash.

 

2.1.6  Change
of Control.

 

The
occurrence of any of the following:

 

(a)    An
acquisition of any Common Stock or other voting securities of the Company
entitled to vote generally for the election of directors (the “Voting
Securities”) 

 

by any
“Person” or “Group” (as each such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act), immediately after which such Person or Group, as the
case may be, has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 20% of the then outstanding
shares of Common Stock or the combined voting power of the Company’s then
outstanding Voting Securities; provided,
however, that in
determining whether a Change of Control has occurred, shares of Common Stock or
Voting Securities that are acquired in a Non-Control Acquisition (as defined
below) shall not constitute an acquisition which would cause a Change of
Control. A “Non-Control Acquisition” shall mean an acquisition by (i) the
Company, (ii) any Subsidiary or (iii) any employee benefit plan maintained by
the Company or any Subsidiary, including a trust forming part of any such plan
(an “Employee Benefit Plan”);

 

(b)    When,
during any 2-year period, individuals who, at the beginning of the 2-year
period, constitute the Board (the “Incumbent Board”), cease for any reason to
constitute at least 50% of the members of the Board; provided,
however, that (i)
if the election or nomination for election by the Company’s shareholders of any
new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes hereof, be deemed to be a member of
the Incumbent Board; and (ii) no individual shall be deemed to be a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person or Group other than the Board
(a “Proxy Contest”) including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest;

 

(c)    The
consummation of:  

 

(i)    a merger,
consolidation or reorganization involving the Company or any Subsidiary, unless
the merger, consolidation or reorganization is a Non-Control Transaction. A
“Non-Control Transaction” shall mean a merger, consolidation or reorganization
of the Company or any Subsidiary where:

 

(A)    the
shareholders of the Company immediately prior to the merger, consolidation or
reorganization own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least 50% of the combined voting power of
the outstanding voting securities of the corporation resulting from such merger,
consolidation or reorganization (the “Surviving Corporation”) in substantially
the same proportion as their ownership of the Common Stock or Voting Securities,
as the case may be, immediately prior to the merger, consolidation or
reorganization, 

 

(B)    the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation, or a corporation beneficially owning,
directly or indirectly, a majority of the voting securities of the Surviving
Corporation, and

 

(C)    no Person
or Group, other than (1) the Company, (2) any Subsidiary, (3) any Employee
Benefit Plan or (4) any other Person or Group who, immediately prior to the
merger, consolidation or reorganization, had Beneficial 

 

Ownership
of not less than 20% of the then outstanding Voting Securities or Common Stock,
has Beneficial Ownership of 20% or more of the combined voting power of the
Surviving Corporation’s then outstanding voting securities or common
stock;

 

(ii)  
a
complete liquidation or dissolution of the Company; or 

 

(iii) the sale
or other disposition of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Subsidiary).

 

Notwithstanding
the foregoing, a Change of Control shall not be deemed to have occurred solely
because any Person or Group (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Voting Securities or
Common Stock of the Company as a result of an acquisition of Voting Securities
or Common Stock by the Company which, by reducing the number of shares of Voting
Securities or Common Stock then outstanding, increases the proportional number
of shares beneficially owned by the Subject Person; provided,
however, that if a
Change of Control would have occurred (but for the operation of this sentence)
as a result of the acquisition of Voting Securities or Common Stock by the
Company, and after such acquisition by the Company, the Subject Person becomes
the beneficial owner of any additional shares of Voting Securities or Common
Stock, which increases the percentage of the then outstanding shares of Voting
Securities or Common Stock beneficially owned by the Subject Person, then a
Change of Control shall be deemed to have occurred. In addition, notwithstanding
the foregoing, the acquisition or ownership of any Common Stock or Voting
Securities by Applied Digital Solutions, Inc. and its Affiliates (determined as
if it was the Company) shall not cause or result in a Change of
Control.

 

2.1.7  Code.

 

The
Internal Revenue Code of 1986, as amended. Any reference to the Code includes
the regulations promulgated pursuant to the Code.

 

2.1.8  Company.

 

SysComm
International Corporation

 

2.1.9  Committee.

 

The
Committee described in Section 5.1.

 

2.1.10   
Common
Stock.

 

The
Company’s common stock which presently has a par value of $.01 per
Share.

 

2.1.11   
Effective
Date.

 

The date
that the Plan is approved by the shareholders of the Company which must occur
within one year before or after approval by the Board. Any grants of Benefits
prior to the approval by the shareholders of the Company shall be void if such
approval is not obtained.

 

2.1.12   
Employee.

 

Any
person employed by the Employer.

 

 

2.1.13    
Employer.

 

The
Company and all Affiliates.

 

2.1.14    
Exchange
Act.

 

The
Securities Exchange Act of 1934, as amended.

 

2.1.15    
Fair
Market Value.

 

The
closing price of Shares on the Nasdaq National Market on a given date, or, in
the absence of sales on a given date, the closing price on the Nasdaq National
Market on the last day on which a sale occurred prior to such date.

 

2.1.16    
Fiscal
Year.

 

The
taxable year of the Company which is the calendar year.

 

 

2.1.17    
ISO.

 

An
Incentive Stock Option as defined in Section 422 of the Code.

 

2.1.18    
NQSO.

 

A
non-qualified stock Option, which is an Option that does not qualify as an
ISO.

 

2.1.19    
Option.

 

An option
to purchase Shares granted under the Plan.

 

2.1.20    
Other
Stock Based Award.

 

An award
under Section 18 that is valued in whole or in part by reference to, or
otherwise based on, Common Stock.

 

 

          2.1.21    
Parent.

 

Any
corporation (other than the Company or a Subsidiary) in an unbroken chain of
corporations ending with the Company, if, at the time of the grant of an Option
or other Benefit, each of the corporations (other than the Company) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

2.1.22    Participant.

 

An
individual who is granted a Benefit under the Plan. Benefits may be granted only
to Employees, members of the Board, employees and owners of entities which are
not Affiliates but which have a direct or indirect ownership interest in an
Employer or in which an Employer has a direct or indirect ownership interest,
individuals who, and employees and owners of entities which, are customers and
suppliers of an Employer, individuals who, and employees and owners of entities
which, render services to an Employer, and individuals who, and employees and
owners of entities, which have ownership or business affiliations with any
individual or entity previously described.

 

2.1.23    Performance
Based Compensation.

 

Compensation
which meets the requirements of Section 162(m)(4)(C) of the
Code.

 

2.1.24    Performance
Share.

 

A Share
awarded to a Participant under Section 16.5 of the Plan.

 

2.1.25    Plan.

 

The
SysComm International Corporation 2001 Flexible Stock Plan and all amendments
and supplements to it.

 

2.1.26    Reload
Option.

 

An Option
to purchase the number of Shares used by a Participant to exercise an Option and
to satisfy any withholding requirement incident to the exercise of such
Option.

 

2.1.27    Restricted
Stock.

 

Shares
issued under Section 16.1 of the Plan.

 

2.1.28    Rule
16b-3.

 

Rule
16b-3 promulgated by the SEC, as amended, or any successor rule in effect from
time to time.

 

2.1.29    SEC.

 

The
Securities and Exchange Commission.

 

 

2.1.30    
Share.

 

A share
of Common Stock.

 

2.1.31   
SAR.

 

A stock
appreciation right, which is the right to receive an amount equal to the
appreciation, if any, in the Fair Market Value of a Share from the date of the
grant of the right to the date of its payment.

 

2.1.32   
Subsidiary.

 

Any
corporation, other than the Company, in an unbroken chain of corporations
beginning with the Company if, at the time of grant of an Option or other
Benefit, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

 

2.2   Other
Definitions.

 

In
addition to the above definitions, certain words and phrases used in the Plan
and any Agreement may be defined in other portions of the Plan or in such
Agreement.

 

 

2.3   Conflicts.

 

In the
case of any conflict in the terms of the Plan relating to a Benefit, the
provisions in the section of the Plan which specifically grants such Benefit
shall control those in a different section. In the case of any conflict between
the terms of the Plan relating to a Benefit and the terms of an Agreement
relating to a Benefit, the terms of the Plan shall control.

 

3.    COMMON
STOCK

 

3.1   Number
of Shares.

 

The
number of Shares which may be issued or sold or for which Options, SARs or
Performance Shares may be granted under the Plan shall be 2,500,000 Shares, plus
an annual increase, effective as of the first day of each calendar year,
commencing with 2002, equal to 25% of the number of outstanding Shares as of the
first day of such calendar year, but in no event more than 10,000,000 Shares in
the aggregate. Such Shares may be authorized but unissued Shares, Shares held in
the treasury, or both. The full number of Shares available may be used for any
type of Option or other Benefit.

 

 

3.2   Reusage.

 

If an
Option or SAR expires or is terminated, surrendered, or canceled without having
been fully exercised, if Restricted Shares or Performance Shares are forfeited,
or if any other grant results in any Shares not being issued, the Shares covered
by such Option or SAR, grant of Restricted Shares, Performance Shares or other
grant, as the case may be, shall again be available for use under the Plan. Any
Shares which are used as full or partial payment to the Company upon exercise of
an Option or for any other Benefit that requires a payment to the Company shall
be available for purposes of the Plan.

 

 

3.3   Adjustments.

 

If there
is any change in the Common Stock of the Company by reason of any stock
dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, or otherwise, the number of
SARs and number and class of shares available for Options and grants of
Restricted Stock, Performance Shares and Other Stock

 

Based
Awards and the number of Shares subject to outstanding Options, SARs, grants of
Restricted Stock which are not vested, grants of Performance Shares which are
not vested, and Other Stock Based Awards, and the price thereof, as applicable,
shall be appropriately adjusted by the Committee.

 

4.    ELIGIBILITY

 

4.1   Determined
By Committee.

 

The
Participants and the Benefits they receive under the Plan shall be determined
solely by the Committee. In making its determinations, the Committee shall
consider past, present and expected future contributions of Participants and
potential Participants to the Employer, including, without limitation, the
performance of, or the refraining from the performance of, services. Unless
specifically provided otherwise herein, all determinations of the Committee in
connection with the Plan or an Agreement shall be made in its sole
discretion.

 

5.    ADMINISTRATION

 

5.1   Committee.

 

The Plan
shall be administered by the Committee. The Committee shall consist of the
Board, unless the Board appoints a Committee of two or more but less than all of
the Board. If the Committee does not include the entire Board, it shall serve at
the pleasure of the Board, which may from time to time appoint members in
substitution for members previously appointed and fill vacancies, however
caused, in the Committee. The Committee may select one of its members as its
Chairman and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting. Any decision
or determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held.

 

 

5.2   Authority.

 

Subject
to the terms of the Plan, the Committee shall have discretionary authority
to:

 

(a)    determine
the individuals to whom Benefits are granted, the type and amounts of Benefits
to be granted and the date of issuance and duration of all such
grants;

 

(b)    determine
the terms, conditions and provisions of, and restrictions relating to, each
Benefit granted;

 

(c)    interpret
and construe the Plan and all Agreements;

 

(d)    prescribe,
amend and rescind rules and regulations relating to the Plan;

 

(e)    determine
the content and form of all Agreements;

 

(f)    determine
all questions relating to Benefits under the Plan;

 

(g)    maintain
accounts, records and ledgers relating to Benefits;

 

(h)    maintain
records concerning its decisions and proceedings;

 

 

(i)    employ
agents, attorneys, accountants or other persons for such purposes as the
Committee considers necessary or desirable;

 

(j)    take, at
any time, any action described in Section 9.1 or permitted by Section 9.2(a),
irrespective of whether any Change of Control has occurred or is
imminent;

 

(k)    determine,
except to the extent otherwise provided in the Plan, whether and the extent to
which Benefits under the Plan will be structured to conform to the requirements
applicable to Performance-Based Compensation, and to take such action, establish
such procedures, and impose such restrictions at the time such Benefits are
granted as the Committee determines to be necessary or appropriate to conform to
such requirements; and 

 

(l)    do and
perform all acts which it may deem necessary or appropriate for the
administration of the Plan and carry out the purposes of the Plan.

 

 

5.3   Delegation.

 

Except as
required by Rule 16b-3 with respect to grants of Options, Stock Appreciation
Awards, Performance Shares, Other Stock Based Awards, or other Benefits to
individuals who are subject to Section 16 of the Exchange Act or as otherwise
required for compliance with Rule 16b-3 or other applicable law, the Committee
may delegate all or any part of its authority under the Plan to any Employee,
Employees or committee.

 

 

5.4   Determination.

 

All
determinations of the Committee shall be final.

 

6.    AMENDMENT

 

6.1   Power
of Board.

 

Except as
hereinafter provided, the Board shall have the sole right and power to amend the
Plan at any time and from time to time.

 

 

6.2   Limitation.

 

The Board
may not amend the Plan, without approval of the shareholders of the
Company:

 

(a) in a
manner which would cause Options which are intended to qualify as ISOs to fail
to qualify;

 

(b) in a
manner which would cause the Plan to fail to meet the requirements of Rule
16b-3; or

 

(c) in a
manner which would violate applicable law.

 

7.    TERM
AND TERMINATION

 

7.1   Term.

 

The Plan
shall commence as of the Effective Date and, subject to the terms of the Plan,
including those requiring approval by the shareholders of the Company and those
limiting the period over which ISOs or any other Benefits may be granted, shall
continue in full force and effect until terminated.

 

 

 

7.2   Termination.

 

The Plan
may be terminated at any time by the Board.

 

8.    MODIFICATION
OR TERMINATION OF BENEFITS

 

8.1   General.

 

Subject
to the provisions of Section 8.2, the amendment or termination of the Plan
shall not adversely affect a Participant’s right to any Benefit granted prior to
such amendment or termination.

 

 

8.2   Committee’s
Right.

 

Any
Benefit granted may be converted, modified, forfeited or canceled, in whole or
in part, by the Committee if and to the extent permitted in the Plan or
applicable Agreement or with the consent of the Participant to whom such Benefit
was granted. Except as may be provided in an Agreement, the Committee may, in
its sole discretion, in whole or in part, waive any restrictions or conditions
applicable to, or accelerate the vesting of, any Benefit.

 

9.    CHANGE
OF CONTROL

 

9.1   Vesting
and Payment.

 

In the
event of a Change of Control:

 

(a)    all
outstanding Options shall become fully exercisable, except to the extent that
the right to exercise the Option is subject to restrictions established in
connection with an SAR that is issued in tandem with the Option;

 

(b)    all
outstanding SARs shall become immediately payable, except to the extent that the
right to exercise the SAR is subject to restrictions established in connection
with an Option that is issued in tandem with the SAR;

 

(c)    all
Shares of Restricted Stock shall become fully vested;

 

(d)    all
Performance Shares shall be deemed to be fully earned and shall be paid out in
such manner as determined by the Committee; and

 

(e)    all Cash
Awards, Other Stock Based Awards and other Benefits shall become fully vested
and/or earned and paid out in such manner as determined by the
Committee.

 

 

9.2   Other
Action.

 

In the
event of a Change of Control, the Committee, in its sole discretion, may, in
addition to the provisions of Section 9.1 above and to the extent not
inconsistent therewith:

 

(a)    provide
for the purchase of any Benefit for an amount of cash equal to the amount which
could have been attained upon the exercise or realization of such
Benefit;

 

(b)    make such
adjustment to the Benefits then outstanding as the Committee deems appropriate
to reflect such transaction or change; and/or

 

(c)    cause the
Benefits then outstanding to be assumed, or new Benefits substituted therefor,
by the surviving corporation in such change.

 

 

10.    AGREEMENTS
AND CERTAIN BENEFITS

 

10.1  Grant
Evidenced by Agreement.

 

The grant
of any Benefit under the Plan may be evidenced by an Agreement which shall
describe the specific Benefit granted and the terms and conditions of the
Benefit. The granting of any Benefit shall be subject to, and conditioned upon,
the recipient’s execution of any Agreement required by the Committee. Except as
otherwise provided in an Agreement, all capitalized terms used in the Agreement
shall have the same meaning as in the Plan, and the Agreement shall be subject
to all of the terms of the Plan.

 

 

10.2  Provisions
of Agreement.

 

Each
Agreement shall contain such provisions that the Committee shall determine to be
necessary, desirable and appropriate for the Benefit granted which may include,
but not necessarily be limited to, the following with respect to any Benefit:
description of the type of Benefit; the Benefit’s duration; its transferability;
if an Option, the exercise price, the exercise period and the person or persons
who may exercise the Option; the effect upon such Benefit of the Participant’s
death, disability, changes of duties or termination of employment; the Benefit’s
conditions; when, if, and how any Benefit may be forfeited, converted into
another Benefit, modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.

 

 

10.3  Transferability.

 

Unless
otherwise specified in an Agreement or permitted by the Committee, each Benefit
granted shall be not transferable other than by will or the laws of descent and
distribution and shall be exercisable during a Participant’s lifetime only by
him.

 

11.    REPLACEMENT
AND TANDEM AWARDS

 

11.1  Replacement.

 

The
Committee may permit a Participant to elect to surrender a Benefit in exchange
for a new Benefit.

 

 

11.2  Tandem
Awards.

 

Awards
may be granted by the Committee in tandem. However, no Benefit may be granted in
tandem with an ISO except SARs.

 

12.    PAYMENT,
DIVIDENDS, DEFERRAL AND WITHHOLDING

 

12.1  Payment.

 

Upon the
exercise of an Option or in the case of any other Benefit that requires a
payment by a Participant to the Company, the amount due the Company is to be
paid:

 

(a)    in cash,
including by means of a so-called “cashless exercise” of an Option;

 

(b)    by the
surrender of all or part of a Benefit (including the Benefit being
exercised);

 

(c)    by the
tender to the Company of Shares owned by the optionee and registered in his name
having a Fair Market Value equal to the amount due to the Company;

 

 

(d)    in other
property, rights and credits deemed acceptable by the Committee, including the
Participant’s promissory note;

 

(e)    by any
combination of the payment methods specified in (a), (b), (c) and (d)
above.

 

Notwithstanding,
the foregoing, any method of payment other than (a) may be used only with the
consent of the Committee or if and to the extent so provided in an Agreement.
The proceeds of the sale of Shares purchased pursuant to an Option and any
payment to the Company for other Benefits shall be added to the general funds of
the Company or to the Shares held in treasury, as the case may be, and used for
the corporate purposes of the Company as the Board shall determine.

 

 

12.2  Dividend
Equivalents.

 

Grants of
Benefits in Shares or Share equivalents may include dividend equivalent payments
or dividend credit rights.

 

 

12.3  Deferral.

 

The right
to receive any Benefit under the Plan may, at the request of the Participant, be
deferred for such period and upon such terms as the Committee shall determine,
which may include crediting of interest on deferrals of cash and crediting of
dividends on deferrals denominated in Shares.

 

 

12.4  Withholding.

 

The
Company may, at the time any distribution is made under the Plan, whether in
cash or in Shares, or at the time any Option is exercised, withhold from such
distribution or Shares issuable upon the exercise of an Option, any amount
necessary to satisfy federal, state and local income and/or other tax
withholding requirements with respect to such distribution or exercise of such
Options. The Committee or the Company may require a participant to tender to the
Company cash and/or Shares in the amount necessary to comply with any such
withholding requirements.

 

13.    OPTIONS

 

13.1  Types
of Options.

 

It is
intended that both ISOs and NQSOs, which may be Reload Options, may be granted
by the Committee under the Plan.

 

 

13.2  Grant
of ISOs and Option Price.

 

Each ISO
must be granted to an Employee and granted within ten years from the earlier of
the date of adoption by the Board or the Effective Date. The purchase price for
Shares under any ISO shall be no less than the Fair Market Value of the Shares
at the time the Option is granted.

 

 

13.3  Other
Requirements for ISOs.

 

The terms
of each Option which is intended to qualify as an ISO shall meet all
requirements of Section 422 of the Code.

 

 

 

13.4  NQSOs.

 

The terms
of each NQSO shall provide that such Option will not be treated as an ISO. The
purchase price for Shares under any NQSO shall be no less than 85% of the Fair
Market Value of the Shares at the time the Option is granted.

 

 

 

13.5  Determination
by Committee.

 

Except as
otherwise provided in Section 13.2 through Section 13.4, the terms of all
Options shall be determined by the Committee.

 

14.    SARS

 

14.1  Grant
and Payment.

 

The
Committee may grant SARs. Upon electing to receive payment of a SAR, a
Participant shall receive payment in cash, in Shares, or in any combination of
cash and Shares, as the Committee shall determine.

 

 

14.2  Grant
of Tandem Award.

 

The
Committee may grant SARs in tandem with an Option, in which case: the exercise
of the Option shall cause a correlative reduction in SARs standing to a
Participant’s credit which were granted in tandem with the Option; and the
payment of SARs shall cause a correlative reduction of the Shares under such
Option.

 

 

14.3  ISO
Tandem Award.

 

When SARs
are granted in tandem with an ISO, the SARs shall have such terms and conditions
as shall be required for the ISO to qualify as an ISO.

 

 

14.4  Payment
of Award.

 

SARs
shall be paid by the Company to a Participant, to the extent payment is elected
by the Participant (and is otherwise due and payable), as soon as practicable
after the date on which such election is made.

 

15.    ANNUAL
LIMITATIONS

 

15.1  Limitation
on Options and SARs.

 

The
number of (a) Shares covered by Options where the purchase price is no less
than the Fair Market Value of the Shares on the date of grant plus (b) SARs
which may be granted to any Participant in any Fiscal Year shall not exceed
$1,250,000.

 

 

 

15.2  Computations.

 

For
purposes of Section 15.1: Shares covered by an Option that is canceled
shall count against the maximum, and, if the exercise price under an Option is
reduced, the transaction shall be treated as a cancellation of the Option and a
grant of a new Option; and SARs covered by a grant of SARs that is canceled
shall count against the maximum, and, if the Fair Market Value of a Share on
which the appreciation under a grant of SARs will be calculated is reduced, the
transaction will be treated as a cancellation of the SARs and the grant
of a new grant of SARs.

 

16.    RESTRICTED
STOCK AND PERFORMANCE SHARES

 

16.1  Restricted
Stock.

 

The
Committee may grant Benefits in Shares available under Section 3 of the
Plan as Restricted Stock. Shares of Restricted Stock shall be issued and
delivered at the time of the grant or as otherwise determined by the Committee,
but shall be subject to forfeiture until provided otherwise in the applicable
Agreement or the Plan. Each certificate representing Shares of Restricted Stock
shall bear a legend referring to the Plan and the risk of forfeiture of the
Shares and stating that such Shares are nontransferable until all restrictions
have been satisfied and the legend has been removed. At the discretion of the
Committee, the grantee may or may not be entitled to full voting and dividend
rights with respect to all shares of Restricted Stock from the date of
grant.

 

 

16.2  Cost
of Restricted Stock.

 

Unless
otherwise determined by the Committee, grants of Shares of Restricted Stock
shall be made at a per Share cost to the Participant equal to par
value.

 

 

16.3  Non-Transferability.

 

Shares of
Restricted Stock shall not be transferable until after the removal of the legend
with respect to such Shares.

 

 

16.4  Performance
Shares.

 

Performance
Shares are the right of an individual to whom a grant of such Shares is made to
receive Shares or cash equal to the Fair Market Value of such Shares at a future
date in accordance with the terms and conditions of such grant. The terms and
conditions shall be determined by the Committee, in its sole discretion, but
generally are expected to be based substantially upon the attainment of targeted
profit and/or performance objectives.

 

 

16.5 Grant.

 

The
Committee may grant an award of Performance Shares. The number of Performance
Shares and the terms and conditions of the grant shall be set forth in the
applicable Agreement.

 

17.    CASH
AWARDS

 

17.1  Grant.

 

The
Committee may grant Cash Awards at such times and (subject to Section 17.2)
in such amounts as it deems appropriate.

 

 

 

17.2  Rule
16b-3.

 

The
amount of any Cash Award in any Fiscal Year to any Participant who is subject to
Section 16 of the Exchange Act shall not exceed the greater of $100,000 or 100%
of his cash compensation (excluding any Cash Award under this Section 17) for
such Fiscal Year.

 

 

17.3  Restrictions.

 

Cash
Awards may be subject or not subject to conditions (such as an investment
requirement), restricted or nonrestricted, vested or subject to forfeiture and
may be payable currently or in the future or both.

 

18.    OTHER
STOCK BASED AWARDS AND OTHER BENEFITS

 

18.1  Other
Stock Based Awards.

 

The
Committee shall have the right to grant Other Stock Based Awards which may
include, without limitation, the grant of Shares based on certain conditions,
the payment of cash based on the performance of the Common Stock, and the grant
of securities convertible into Shares.

 

 

18.2  Other
Benefits.

 

The
Committee shall have the right to provide types of Benefits under the Plan in
addition to those specifically listed, if the Committee believes that such
Benefits would further the purposes for which the Plan was
established.

 

19.    MISCELLANEOUS
PROVISIONS

 

19.1  Underscored
References.

 

The
underscored references contained in the Plan are included only for convenience,
and they shall not be construed as a part of the Plan or in any respect
affecting or modifying its provisions.

 

 

19.2  Number
and Gender.

 

The
masculine and neuter, wherever used in the Plan, shall refer to either the
masculine, neuter or feminine; and, unless the context otherwise requires, the
singular shall include the plural and the plural the singular.

 

 

19.3  Unfunded
Status of Plan.

 

The Plan
is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments or deliveries of Shares not yet made
to a Participant by the Company, nothing contained herein shall give any rights
that are greater than those of a general creditor of the Company. The Committee
may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Shares or payments hereunder
consistent with the foregoing.

 

 

19.4  Termination
of Employment.

 

If the
employment of a Participant by the Company terminates for any reason, except as
otherwise provided in an Agreement, all unexercised, deferred, and unpaid
Benefits may be exercisable or paid only in accordance with rules established by
the Committee. These rules may provide, as the Committee may deem appropriate,
for the expiration, forfeiture, continuation, or acceleration of the vesting of
all or part of the Benefits.

 

 

 

19.5  Designation
of Beneficiary.

 

A
Participant may file with the Committee a written designation of a beneficiary
or beneficiaries (subject to such limitations as to the classes and number of
beneficiaries and contingent beneficiaries as the Committee may from time to
time prescribe) to exercise, in the event of the death of the Participant, an
Option, or to receive, in such event, any Benefits. The Committee reserves the
right to review and approve beneficiary designations. A Participant may from
time to time revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan shall be controlling over any other
disposition, testamentary or otherwise; provided, however, that if the Committee
shall be in doubt as to the right of any such beneficiary to exercise any Option
or to receive any Benefit, the Committee may determine to recognize only an
exercise by the legal representative of the recipient, in which case the
Company, the Committee and the members thereof shall not be under any further
liability to anyone.

 

 

19.6  Governing
Law.

 

This Plan
shall be construed and administered in accordance with the laws of the State of
Delaware.

 

 

19.7  Purchase
for Investment.

 

The
Committee may require each person purchasing Shares pursuant to an Option or
other award under the Plan to represent to and agree with the Company in writing
that such person is acquiring the Shares for investment and without a view to
distribution or resale. The certificates for such Shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
All certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under all applicable laws, rules and regulations, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
references to such restrictions.

 

 

19.8  No
Employment Contract.

 

Neither
the adoption of the Plan nor any Benefit granted hereunder shall confer upon any
Employee any right to continued employment nor shall the Plan or any Benefit
interfere in any way with the right of the Employer to terminate the employment
of any of its Employees at any time.

 

 

19.9  No
Effect on Other Benefits.

 

The
receipt of Benefits under the Plan shall have no effect on any benefits to which
a Participant may be entitled from the Employer, under another plan or
otherwise, or preclude a Participant from receiving any such
benefits.Exhibit 10.6

 

A mark of [***] in the text of this Exhibit indicates that confidential
material has been omitted.

 

This Exhibit, including the
omitted portions, has been filed separately with the Secretary of the
Securities and Exchange Commission pursuant to an application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

 

AMENDED
AND RESTATED DISTRIBUTION AGREEMENT

 

This
Amended and Restated Distribution Agreement (“AGREEMENT”)
is entered into as of February 23, 2005 (the “EFFECTIVE DATE”) by and between MedImmune, Inc., a Delaware
corporation, having its principal place of business at One MedImmune Way,
Gaithersburg, MD 20878 (“MEDIMMUNE”),
and Abbott International LLC, a Delaware limited liability corporation (“ABBOTT”), having its principal place of
business at 100 Abbott Park Road, Abbott Park, IL 60064.

 

Recitals:

 

A.                                   ABBOTT
and MEDIMMUNE entered into a Distribution Agreement, dated December 1,
1997 (as amended as of April 28, 1999, October 8, 1999 and July 1,
2003, the “ORIGINAL AGREEMENT”),
for the distribution of MEDI-493 (palivizumab), a humanized antibody directed
against respiratory syncytial virus (“RSV”).

 

B.                                     MEDIMMUNE
and ABBOTT desire to amend the ORIGINAL AGREEMENT to include the distribution
of additional humanized antibody products directed against RSV and to further
amend and restate the ORIGINAL AGREEMENT in its entirety as set forth in this
AGREEMENT.

 

In
consideration of the mutual promises and other good and valuable consideration,
the parties hereby amend and restate the ORIGINAL AGREEMENT as follows:

 

Agreement:

 

1.                                      DEFINITIONS.

 

In
addition to the terms defined above and other terms defined in other Sections
of this AGREEMENT and Exhibit 3.2, the following terms when capitalized
shall have the meanings set forth below for purposes of this AGREEMENT.

 

1.1                               “AFFILIATE” shall mean any corporation or
other business entity that directly or indirectly controls, is controlled by,
or is under common control with a PARTY. 
Control means ownership or other beneficial interest in fifty percent
(50%) or more of the voting stock or other voting interest of a corporation or
other business entity the term,
provided however that, the term shall
specifically exclude TAP Pharmaceutical Products Inc., TAP Finance Inc., and
TAP Pharmaceuticals Inc.

 

1.2                               “cGMP” shall mean the quality systems and
current good manufacturing practices for the manufacture of the PRODUCT
required by the REGULATORY AUTHORITIES in any country in the MAJOR MARKET, as
amended from time to time.

 

1.3                               “CALENDAR QUARTER” shall mean the period of
three consecutive calendar months ending on March 31, June 30, September 30
or December 31 of any CONTRACT YEAR, as the case may be; provided, however,
that the first CALENDAR QUARTER shall commence on the EFFECTIVE DATE hereof and
shall end on March 31, 2005, and the last CALENDAR QUARTER shall commence
on the date following the last day of the immediately prior CALENDAR QUARTER
and end on the date of the expiration of the TERM.

 

1.4                               “COMMERCIALLY REASONABLE EFFORTS” shall mean
those efforts of a PARTY which are consistent with those utilized by such PARTY
to achieve the intent and

 

 

objectives of the PARTIES under this AGREEMENT in
good faith, taking into account all factors that impact the manufacturing,
development, marketing and sales of the PRODUCTS, as applicable, which are
commercially reasonable in the context of the PRODUCTS and the marketplace,
unless the other PARTY can demonstrate that such PARTY’s efforts deviate
meaningfully from the industry norm.

 

1.5                               “CONTRACT YEAR” shall mean July 1 of a
calendar year through June 30 of the following calendar year, except that,
solely for the purposes of calculating the amounts due under Section 3.8,
the term “CONTRACT YEAR” shall mean the 12 month period commencing on December 1
of each calendar year and ending on November 30 of the immediately
following calendar year; provided, however, that the first CONTRACT YEAR
shall start on the EFFECTIVE DATE and end on June 30, 2005 (or November 30,
in the case of Section 3.8) and that the last CONTRACT YEAR shall
end on the last day this AGREEMENT remains in effect.

 

1.6                               “COST OF GOODS” shall mean the fully
allocated cost to manufacture each UNIT of the PRODUCTS, determined in a
reasonable manner consistent with MEDIMMUNE’s normal internal accounting
practices and in accordance with generally accepted accounting principles (“GAAP”),
which includes but is not limited to: (a) direct labor (salaries, wages and
employee benefits); (b) direct materials; (c) operating costs of building and
equipment used in connection with the manufacture of PRODUCT; (d) allocated
depreciation and repairs and maintenance; (e) quality and in-process control;
(f) an allocation of overhead costs incurred in connection with the
manufacturing of PRODUCT, including: raw material supply and manufacturing
administration and management, materials management, storage and handling; and
manufacturing and employee training; (g) any charges for obsolescence, out of
date product, spoilage, scrap or rework costs; (h) insurance costs; and (i) the
cost of packaging and labeling, if applicable. To the extent that the
manufacturing of the PRODUCTS is performed for MEDIMMUNE by a THIRD PARTY,
amounts paid to such THIRD PARTY shall be included in COST OF GOODS in lieu of
the items specified in (a) through (i) above. 
No later than sixty (60) days following the start of each CONTRACT YEAR
during the TERM of this AGREEMENT, MEDIMMUNE shall provide ABBOTT, in writing,
with the COST OF GOODS for each presentation of the PRODUCT that will be
supplied by MEDIMMUNE.

 

1.7                               “DEVELOPMENT COMMITTEE” shall have the
meaning set forth in Section 6.6.

 

1.8                               “FDA” shall mean the United States Food and
Drug Administration and any successor regulatory authority in the United States
of America.

 

1.9                               “FIRM ORDER” shall have the meaning set forth
in Section 5.1.

 

1.10                        “FTE RATE” shall mean the pro rata share of
the fully burdened cost of a sales representative, per annum, based on time
spent on the promotion of NUMAX in relation to the total time spent on all
products promoted by such sales representative, comprising of the wages,
bonuses, incentives, car expenses, other detailing costs typically associated
with the promotion of a pharmaceutical product (including, but not limited to,
expenses associated with training, promotional materials, travel and
entertainment) and overhead costs reasonably allocable to such activities, as
applicable in the country in the TERRITORY in which NUMAX will be co-promoted
by MEDIMMUNE.

 

2

 

1.11                        “LAUNCH” shall mean the date of the first
commercial sale of a PRODUCT sold on arm’s length terms to a THIRD PARTY by
ABBOTT or any of its AFFILIATES in any country within the TERRITORY after the
REGULATORY APPROVAL required for the marketing and sale of such PRODUCT in such
country within the TERRITORY has been obtained. 
Sales for clinical trial purposes shall not be considered a LAUNCH.  For clarity, a LAUNCH of a PRODUCT in the
TERRITORY shall only be deemed to occur once upon the first commercial sale in
the TERRITORY regardless of the number of countries in the TERRITORY in which
such PRODUCT is approved and marketed.

 

1.12                        “MAJOR MARKET” shall mean any of the
following countries: [***], and, collectively, the MAJOR MARKETS, subject to
adjustment as set forth in Section 14.3.

 

1.13                        “NET SALES” shall mean, with respect to any
PRODUCT, that sum determined by deducting from the gross amount invoiced in the
applicable period by ABBOTT or ABBOTT’s AFFILIATES for such PRODUCT sold for
use in the TERRITORY in an arms length transaction to THIRD PARTIES: (a)
transportation, importation, insurance and other handling charges to the extent
included in the billing; (b) trade, quantity or cash discounts, to the extent
allowed; (c) credits or allowances, if any, given or made on account of price
adjustments, or returns, to the extent made; (d) any and all Federal, state or
local government rebates, whether in existence now, or enacted at any time
during the term of this AGREEMENT, to the extent made; (e) any sales, use,
value-added, excise or similar tax or other governmental charge upon or
measured by the production, sale, transportation, delivery or use of such
PRODUCT; and (f) a reasonable allowance for bad debt; in each case determined
in accordance with ABBOTT’s normal internal accounting practices and GAAP.

 

1.14                        “NUMAX” shall mean the product candidate
being developed by MEDIMMUNE, known as of the EFFECTIVE DATE as MEDI-524,
including any functional derivative, delivery form, dosage form, formulation,
improvement or presentation of such product candidate developed by or on behalf
of MEDIMMUNE following the EFFECTIVE DATE.

 

1.15                        “PHASE III CLINICAL TRIAL” shall mean the
Phase III clinical trial for NUMAX ongoing as of the EFFECTIVE DATE (designated
by MEDIMMUNE as of the EFFECTIVE DATE as STUDY #MI-CP110).

 

1.16                        “PARTY” or “PARTIES” shall mean ABBOTT and/or
MEDIMMUNE, as the case may be.

 

1.17                        “PATENT” shall mean the patent and patent
applications listed on Exhibit 10.8, and any and all reissues,
extensions, substitutions, reexaminations, supplemental protection
certificates, continuations, continuations-in-part or divisions of or to any of
such patents and patent applications.

 

1.18                        “PRODUCT(S)” shall mean SYNAGIS and/or NUMAX.

 

1.19                        “REGISTRATION FILES” means the following
documents and related correspondence with REGULATORY AUTHORITIES: (a) REGULATORY
FILINGS; (b) Drug Master Files  (the “DMF’s”)
and Registration Dossier for the PRODUCTS; (c) labeling for all dosage forms of
the PRODUCTS; (d) all clinical raw data concerning PRODUCT, expert reports,
pre-clinical and clinical reports; (e) stability study reports; (f) existing

 

3

 

specifications (including copies of validation of analytical
methods); (g) formulations data included in the registration dossier for the
PRODUCT; (h) any adverse event and pharmacovigilance reports; and (i) a summary
of any outstanding regulatory issues.

 

1.20                        “REGULATORY APPROVAL” shall mean the
applicable technical, medical and scientific licenses, registrations,
authorizations and approvals required for marketing and/or use of the PRODUCTS
in each country in the TERRITORY, including, without limitation, approvals of
Biologics License Applications (BLA) or equivalent applications filed with
REGULATORY AUTHORITIES in the TERRITORY, but excluding pricing, reimbursement
or labeling approvals except to the extent required by a REGULATORY AUTHORITY in
any country in the TERRITORY for the distribution, marketing, promotion, offer
for sale, use, import or sale of PRODUCTS. 
For the avoidance of doubt, an “approvable letter” (or its equivalent)
issued by a REGULATORY AUTHORITY shall not be considered a REGULATORY APPROVAL.

 

1.21                        “REGULATORY AUTHORITY” shall mean the FDA and
any national, supra-national (e.g., the European Commission, the Council of the
European Union, or the European REGULATORY AUTHORITY for the Evaluation of
Medicinal Products), regional, state or local regulatory authority, department,
bureau, commission, council or other governmental entity.

 

1.22                        “REGULATORY FILINGS” shall mean a pre-market
approval application and/or any other filings or dossier as may be required by REGULATORY
AUTHORITIES to obtain or maintain REGULATORY APPROVALS for sale, use or
marketing of any PRODUCT.

 

1.23                        “REVERSION DATE” shall mean, with respect to
a REVERSION EVENT, the earlier of:  (a)
[***] (or such later date on which ABBOTT declares a REVERSION EVENT in
accordance with Section 3.4), (b) [***] years after the date of
occurrence of a REVERSION EVENT defined in Sections 3.4 (a)(i) through (iv),
or (c) the first date after occurrence of a REVERSION EVENT defined in Section 3.4(a)(v).

 

1.24                        “REVERSION EVENT” shall have the meaning set
forth in Section 3.4.

 

1.25                        “SPECIFICATIONS” shall mean the written
specifications for ingredients, composition, sampling,  test procedures, process descriptions,
in-process criteria, final release criteria and other information relating to
each of the PRODUCTS.  The current
SPECIFICATIONS for the lyophilized formulation of SYNAGIS are attached as Exhibit
A-1, the SPECIFICATIONS for the liquid formulation of SYNAGIS are attached
as Exhibit A-2 and the SPECIFICATIONS for NUMAX are attached at Exhibit
A-3.

 

1.26                        “SYNAGIS” shall mean any and all formulations
of the humanized antibody product known as palivizumab that is marketed in the
TERRITORY as of the EFFECTIVE DATE under the trademark Synagis®, and was
previously known as MEDI-493.

 

1.27                        “TERRITORY” shall mean all countries of the
world except the United States of America and its territories, possessions and
commonwealths, subject to adjustment as set forth in Section 14.3.

 

1.28                        “THIRD PARTY” shall mean a party other than
ABBOTT, MEDIMMUNE or their respective AFFILIATES.

 

4

 

1.29                        “THIRD PARTY MANUFACTURER” shall mean, for
SYNAGIS, as of the EFFECTIVE DATE, Boehringer Ingelheim, or such other party
that MEDIMMUNE appoints following the EFFECTIVE DATE for the manufacture of
each of the finished PRODUCTS, in accordance with Section 7.8.

 

1.30                        “TRADEMARK” shall mean the trademark(s) for
each of the PRODUCTS (with ownership determined in accordance with Section 10).

 

1.31                        “UNIT” shall mean a 50 mg vial, a 100 mg vial
or other presentation of one or more of the PRODUCTS approved from time to time
by the Manufacturing Steering Committee. For the purpose of any price
calculations under this AGREEMENT, a UNIT shall be deemed to be a 100 mg
equivalent vial of PRODUCT (e.g., a 50 mg vial would be equal to a 0.5 100 mg
equivalent vial).

 

1.32                        “VACCINE” shall mean one or more biological
and/or chemical materials that is or are designed to elicit an immune response
in humans.

 

2.                                      GRANT OF RIGHTS.

 

2.1                               APPOINTMENT AND ACCEPTANCE.

 

(a)                                  During the TERM of this AGREEMENT, MEDIMMUNE
hereby appoints ABBOTT as the exclusive distributor of each of the PRODUCTS in
the TERRITORY.  In connection with such
appointment, except as set forth in Section 9, ABBOTT shall
exclusively conduct the marketing, promotion, sale and distribution of: (i)
NUMAX for use in the prevention or treatment of all human, prophylactic and
therapeutic, approved indications in any country within the TERRITORY
(including all indications for which NUMAX is approved following the EFFECTIVE
DATE in any country within the TERRITORY), and (ii) SYNAGIS for use in the
prevention of RSV.  For the avoidance of
doubt, ABBOTT’s appointment as the exclusive distributor means that, except as
specifically provided otherwise in this AGREEMENT, MEDIMMUNE shall neither itself,
directly or indirectly, market, promote, sell or distribute nor grant a THIRD
PARTY any right to market, promote, sell or distribute in any country within
the TERRITORY: (x) NUMAX for any human, prophylactic and therapeutic
indication, or (y) SYNAGIS for the prevention of RSV.

 

(b)                                 ABBOTT hereby accepts the appointment as the
exclusive distributor of the PRODUCTS as set forth in Section 2.1(a).  In connection with such appointment, ABBOTT
agrees that following REGULATORY APPROVAL of a PRODUCT in each country of the
TERRITORY, ABBOTT shall use its COMMERCIALLY REASONABLE EFFORTS to market,
promote, sell and distribute at least one PRODUCT in each such country and, if
NUMAX is approved in a particular country, then to the extent commercially
viable (considering such factors as the breadth of the NUMAX label compared to
the SYNAGIS label, the relative adverse event profile of each and the relative
reimbursement rates of each), ABBOTT shall use its COMMERCIALLY REASONABLE
EFFORTS to market, promote, sell and distribute NUMAX in any such countries.

 

5

 

(c)                                  For clarity, MEDIMMUNE agrees that, following
the LAUNCH of NUMAX in any country in the TERRITORY, for as long as ABBOTT is
actively distributing, marketing, promoting and selling NUMAX in such country,
ABBOTT shall, in its sole discretion, have the right to cease the marketing,
promotion, sale and distribution of SYNAGIS in such country upon written notice
to MEDIMMUNE and subject to the transition provisions of Section 5.2.  ABBOTT’s failure to market, promote, sell or
distribute SYNAGIS in any country in the TERRITORY during the active sale and
distribution of NUMAX in such country shall not entitle MEDIMMUNE to terminate
ABBOTT’s exclusive rights to SYNAGIS in such country under Section 14.3(c)(i)
and shall not entitle MEDIMMUNE to itself market, promote, sell or distribute
SYNAGIS for the prevention of RSV in any such country or grant any right to
market, promote, sell or distribute SYNAGIS for the prevention of RSV in any
such country to any THIRD PARTY.

 

(d)                                 ABBOTT hereby warrants and agrees as follows:
(i) ABBOTT will only sell product for the treatment or prevention of RSV
(including any indication for which NUMAX is approved in the future) in the
TERRITORY which is purchased from MEDIMMUNE; (ii) ABBOTT will only sell and
distribute product for the treatment or prevention of RSV (including any
indication for which NUMAX is approved in the future) in the TERRITORY as to
which ABBOTT maintains distribution rights under this AGREEMENT; (iii) ABBOTT
will sell and distribute the PRODUCTS in accordance with the terms and
conditions of this AGREEMENT; (iv) ABBOTT will sell each PRODUCT in the
TERRITORY under the TRADEMARK applicable to such PRODUCT and only as purchased
from MEDIMMUNE; and (v) to the extent commercially reasonable, ABBOTT will sell
all PRODUCTS in its inventory on a first-in, first-out basis (i.e., UNITS of
PRODUCT closest to their expiration date will be sold first).

 

(e)                                  ABBOTT agrees that neither ABBOTT nor an
AFFILIATE of ABBOTT shall manufacture, promote, market or sell, directly or
indirectly, or assist any THIRD PARTY in marketing or selling in the TERRITORY,
any [***].  These restrictions will apply during the term of the AGREEMENT
and for [***] after the termination or expiration of the AGREEMENT, except in
the European Union, where the duration of the restriction is limited to [***]
from the date of entry into force of the AGREEMENT.  Notwithstanding the
foregoing, the restrictions set forth in the preceding two sentences shall not
be applicable in any countries in the TERRITORY to the extent such restrictions
are not permitted under applicable law, but if ABBOTT or an AFFILIATE of ABBOTT
promotes, markets, sells or distributes any [***] in such countries, MEDIMMUNE
shall have the sole right to either terminate this AGREEMENT or seek to
renegotiate the terms of this AGREEMENT in light of the applicable antitrust
laws and regulations (in which case ABBOTT will negotiate in good faith an appropriate
amendment to this AGREEMENT).

 

(f)                                    ABBOTT agrees and acknowledges that neither
ABBOTT nor its AFFILIATES has been granted any rights by MEDIMMUNE (either
under this AGREEMENT or otherwise) to research, manufacture, develop, market,
promote, sell or distribute NUMAX outside of the TERRITORY or SYNAGIS outside
of the TERRITORY, except, in the case of SYNAGIS, pursuant to the terms of that

 

6

 

certain Co-Promotion Agreement, dated as of November 26,
1997, by and between MEDIMMUNE and Abbott Laboratories (through its Ross
Products Division), as amended.

 

2.2                               NON-DIVERSION AND BUNDLING. 
Notwithstanding the foregoing provisions of Section 2.1, to
the extent permitted by applicable law, ABBOTT agrees that ABBOTT and its
AFFILIATES will not sell any of the PRODUCTS to any THIRD PARTY if ABBOTT (or
its AFFILIATES) knows or has reason to believe that the PRODUCT will be re-sold
or exported outside of the TERRITORY by such THIRD PARTY.  If, after sale of the PRODUCT to a THIRD
PARTY, ABBOTT (or its AFFILIATES) learns or reasonably suspects (based on
information obtained from MEDIMMUNE or a THIRD PARTY) that such PRODUCT was
re-sold or exported outside of the TERRITORY, ABBOTT agrees to provide prompt
written notice to MEDIMMUNE (except to the extent such information was
initially provided by MEDIMMUNE) and make (or cause its AFFILIATES to make)
reasonable efforts to obtain assurance from such THIRD PARTY that it will not
divert the sale of the PRODUCT outside the TERRITORY.  If such assurance cannot be timely obtained,
ABBOTT shall, if permitted under local laws, cease (or cause its AFFILIATES to
cease) further sales of all PRODUCTS to such THIRD PARTY until reasonable
assurance has been obtained from such THIRD PARTY that it will cease its resale
or export activities with respect to such PRODUCT.  ABBOTT agrees that, with respect to its
procedures related to limiting resale or export of the PRODUCTS by THIRD
PARTIES, in addition to the foregoing, ABBOTT will treat the PRODUCTS similarly
to other ABBOTT products.  Furthermore,
the PARTIES agree that if, despite the foregoing, the resale or export of the
PRODUCTS by THIRD PARTIES results in significant negative economic consequences
to MEDIMMUNE, the PARTIES will meet in good faith to negotiate an appropriate
resolution to the situation.

 

ABBOTT will not, without MEDIMMUNE’S written
consent, (a) discount the selling price of any PRODUCT in order to promote the
sales of other products of ABBOTT, or (b) bundle the PRODUCTS for sale with any
other products (including other PRODUCTS). 
ABBOTT agrees that in all cases it will conduct all price negotiations
in good faith on an arms length basis.

 

2.3                               LABELING AND PACKAGING. 
ABBOTT shall prepare all labeling, packaging and package inserts for
PRODUCTS in conformity with regulatory guidelines in each country of the
TERRITORY, which labeling shall clearly indicate that the PRODUCT is
manufactured by or on behalf of MEDIMMUNE and is being distributed by ABBOTT,
to the extent that such statements are allowed under the applicable laws and
regulations in any particular country of the TERRITORY.

 

ABBOTT shall submit the company core datasheet
(CCDS) and packaging to be used for PRODUCT in the MAJOR MARKETS to MEDIMMUNE
for approval, which approval shall not unreasonably be withheld. If the
proposed local labeling for a country in a MAJOR MARKET: (a) is materially
changed from the CCDS previously approved by MEDIMMUNE  pursuant to this Section 2.3, (b)
is approved for such country more than two (2) CONTRACT YEARS earlier, or (c)
is reasonably requested to be submitted for review by MEDIMMUNE (provided
however that, MEDIMMUNE may make such request to review no more than once
annually), ABBOTT shall submit such labeling to MEDIMMUNE for approval, which
approval shall not unreasonably be withheld. In all cases, MEDIMMUNE shall be
deemed to have approved such submitted labeling, packaging or packaging inserts
unless MEDIMMUNE provides ABBOTT written

 

7

 

objection or approval thereto within twenty (20)
days after receipt thereof, but in no event later than ten (10) days prior to
any applicable regulatory deadline (assuming timely notification by ABBOTT at
least thirty (30) days before such deadline).

 

2.4                               SUBDISTRIBUTORS. 
ABBOTT agrees not to sell the PRODUCTS through subdistributors without
the written consent of MEDIMMUNE, which consent shall not be unreasonably
withheld. If such consent is granted, ABBOTT shall remain fully liable and
responsible to MEDIMMUNE for the activities of a subdistributor appointed by
ABBOTT and will monitor any subdistributors to ensure that such subdistributors
actions are not inconsistent with the obligations of ABBOTT under this
AGREEMENT.

 

2.5                               RIGHT OF FIRST OFFER.  If at any time during the TERM,
MEDIMMUNE develops and has marketing rights to [***] (“COMPETING PRODUCT”)
and MEDIMMUNE desires to grant rights to distribute a COMPETING PRODUCT in one
or more countries of the TERRITORY, then MEDIMMUNE shall first notify ABBOTT in
writing that it is seeking to appoint such a distributor and if, within thirty
(30) days after such written notice, ABBOTT notifies MEDIMMUNE in writing that
ABBOTT is interested in becoming that distributor, then MEDIMMUNE and ABBOTT
shall negotiate in good faith the terms and conditions of a distribution
agreement for such COMPETING PRODUCT in such countries.  If the PARTIES do not reach agreement as to
the terms and conditions of such a distribution agreement within sixty (60)
days after MEDIMMUNE receives such written notice from ABBOTT or ABBOTT does
not notify MEDIMMUNE in writing of ABBOTT’s interest within the thirty (30) day
period after the written notice from MEDIMMUNE, then MEDIMMUNE may grant such
rights to a THIRD PARTY.  Notwithstanding
the foregoing, in the event the PARTIES were unable to reach an agreement as to
the terms and conditions, MEDIMMUNE shall not offer such appointment to a THIRD
PARTY on  terms and conditions that are,
on the whole, more favorable considering the economic value of the transaction,
without first offering such terms and conditions to ABBOTT.  Neither PARTY shall have the obligation to
enter into an agreement with respect to distribution of a COMPETING PRODUCT and
neither shall have liability for failing to enter into any such agreement.  Notwithstanding anything in this Section 2.5
to the contrary, MEDIMMUNE may, itself, distribute a COMPETING PRODUCT in the
TERRITORY through local wholesale distribution channels without first offering
distribution rights to ABBOTT under this Section 2.5, provided that
any THIRD PARTY appointed by MEDIMMUNE for such local distribution shall not
market or promote the PRODUCT in the TERRITORY.

 

3.                                      PURCHASE OF PRODUCTS

 

3.1                               (a)                                  REQUIREMENTS. 
Subject to the terms and conditions of this AGREEMENT, during  the TERM of this AGREEMENT, MEDIMMUNE shall
sell exclusively to ABBOTT and ABBOTT shall purchase, exclusively from
MEDIMMUNE, ABBOTT’s requirements of each PRODUCT for sale in the
TERRITORY.  ABBOTT shall pay the price
for such PRODUCT as set forth in Section 3.2.

 

(b)                                 SUPPLY PLANNING. Subject to the availability of PRODUCT from
MEDIMMUNE, ABBOTT shall maintain sufficient inventories of PRODUCT to enable
ABBOTT to effectively satisfy demand for PRODUCT in the TERRITORY.  Subject to Section 3.6, MEDIMMUNE
shall use COMMERCIALLY REASONABLE EFFORTS to establish and maintain a
manufacturing schedule and inventory on-hand of each PRODUCT sufficient to

 

8

 

supply ABBOTT’s demands of such PRODUCT, in 50 mg
and 100 mg presentations (or any other presentations that may be approved by
the Manufacturing Steering Committee) as set forth in the forecasts submitted
by ABBOTT in accordance with the terms of Section 5 hereof.

 

3.2                               PRODUCT PRICE. 
Certain definitions related to this Section 3.2 are set
forth in Exhibit 3.2 which is hereby incorporated by reference.

 

(a)                                  INVOICE/PAYMENT. 
MEDIMMUNE shall invoice ABBOTT for all PRODUCT delivered by MEDIMMUNE to
the carrier and ABBOTT shall pay MEDIMMUNE for such PRODUCT, all in accordance
with this Section 3.2.  The
invoice amount shall be denominated in U.S. Dollars.  MEDIMMUNE shall forward all invoices for
PRODUCT ordered hereunder to a U.S. location as designated by ABBOTT.  The invoice submitted by MEDIMMUNE shall
include a statement of the royalties owed by MEDIMMUNE to THIRD PARTIES on the
PRODUCT for the purposes of determining the BASE PRICE.

 

(b)                                 MINIMUM PRICE/INVOICE PRICE.  No
earlier than delivery of PRODUCT to the carrier, MEDIMMUNE shall invoice ABBOTT
at the MINIMUM PRICE for such PRODUCT multiplied by the number of UNITS
of PRODUCT delivered to the carrier, and ABBOTT shall pay MEDIMMUNE the total
amount shown on such invoice (the “INVOICE PRICE”) within forty-five (45) days
after the date of invoice.  The MINIMUM
PRICE shall be non-refundable.

 

(c)                                  FINAL PRICE. 
Within forty-five (45) days after the end of each CALENDAR QUARTER,
ABBOTT shall pay MEDIMMUNE (without the need for any further invoice) the
difference between (i) the aggregate FINAL PRICE and (ii) the aggregate INVOICE
PRICE for all UNITS of PRODUCT sold by ABBOTT during such CALENDAR QUARTER plus
the aggregate amount, if any, paid by ABBOTT for FIRST SEASON PRE-APPROVAL
PRODUCT in connection with REGULATORY APPROVAL and in accordance with Section 3.2(e).  For any CALENDAR QUARTER, if the aggregate
INVOICE PRICE for all PRODUCT sold by ABBOTT during that CALENDAR QUARTER (as
determined by specific identification) plus the aggregate amount, if
any, paid by ABBOTT for FIRST SEASON PRE-APPROVAL PRODUCT in connection with
REGULATORY APPROVAL and in accordance with Section 3.2(e) is
greater than the aggregate FINAL PRICE for all PRODUCT sold by ABBOTT during
that CALENDAR QUARTER, then ABBOTT shall forfeit the excess amount paid.  This determination will be conducted with
specific identification of and separate calculation of each inventory layer and
each UNIT type.  For clarity, the
calculation of FINAL PRICE will not include SAMPLES (i.e., ABBOTT shall only be
obligated to pay the INVOICE PRICE for such SAMPLES).

 

(d)                                 EXPIRED, UNSOLD PRODUCT.  On December 15
of each CONTRACT YEAR and within forty-five (45) days of the last day of the
TERM, ABBOTT shall pay MEDIMMUNE (without the need of any further invoice), the
difference between the FINAL PRICE and the INVOICE PRICE for all UNITS of
PRODUCT not sold by ABBOTT that expired during the period between October 1
of the previous CONTRACT YEAR and September 30 of the subject CONTRACT
YEAR (or the last day of the TERM in the case of the last CONTRACT YEAR), other
than FIRST SEASON PRE-APPROVAL

 

9

 

PRODUCT.  If
the INVOICE PRICE is greater than the FINAL PRICE, then ABBOTT shall forfeit
the excess amount paid.  This payment
shall include a report with respect to the expired vials for the applicable
period.

 

(e)                                  FIRST SEASON PRE-APPROVAL
PRODUCT.  Within thirty (30) days after receipt of
REGULATORY APPROVAL in any country in the MAJOR MARKETS, for all FIRST SEASON
PRE-APPROVAL PRODUCT that has not expired and has a remaining shelf life as of
the time of REGULATORY APPROVAL of [***] or greater, ABBOTT shall pay MEDIMMUNE
the difference between (a) the INVOICE PRICE ABBOTT would have been obligated
to pay to MEDIMMUNE had such PRODUCT initially not been designated FIRST SEASON
PRE-APPROVAL PRODUCT and (b) the INVOICE PRICE initially paid by ABBOTT for
such PRODUCT.  The additional payment
together with the initial payment shall be deemed to be the aggregate
nonrefundable minimum price for the applicable PRODUCT.  With respect to FIRST SEASON PRE-APPROVAL
PRODUCT that has a remaining shelf life as of the time of REGULATORY APPROVAL
of less than [***], ABBOTT shall have no payment obligation upon receipt of
REGULATORY APPROVAL, but if such PRODUCT is sold by ABBOTT, then ABBOTT shall
pay MEDIMMUNE the FINAL PRICE less the INVOICE PRICE for such PRODUCT in the
CALENDAR QUARTER in which it is sold in accordance with Section 3.2(c).
With respect to FIRST SEASON PRE-APPROVAL PRODUCT that, as of the time of
REGULATORY APPROVAL,  has expired or has
a remaining shelf life of less than [***] and is not subsequently sold by
ABBOTT, ABBOTT shall have no payment obligations to MEDIMMUNE other than the
INVOICE PRICE paid for such PRODUCT in accordance with Section 3.2(b).

 

(f)                                    FOREIGN EXCHANGE CALCULATION. 
Whenever conversion from any currency into U.S. Dollars shall be
required under this AGREEMENT (e.g., for the determination of NET SALES), such
conversion shall be completed for each month of the CALENDAR QUARTER as follows:  the value to be converted shall be calculated
with respect to each country in local currency and then converted into U.S.
dollars based on the average rate of exchange for that month (based on daily
noon buying rates for cable transfers in New York City certified for customs
purposes by the Federal Reserve Bank of New York, available on the website for
the Board of Governors of the Federal Reserve System (or any successor
entity)).  In connection with its payment
obligations each CALENDAR QUARTER, ABBOTT will provide electronically to
MEDIMMUNE a detailed reconciliation, in form and substance reasonably
acceptable to MEDIMMUNE, showing the rates used, confirming the source of the
rates used and the conversion calculations.

 

(g)                                 NET SALES DOCUMENTATION.  With
each quarterly payment, ABBOTT shall deliver to MEDIMMUNE a full and accurate
accounting to include at least the following information:

 

(i)                                     Quantity of each PRODUCT sold and/or
withdrawn by transaction type (by country, by month) by ABBOTT and its AFFILIATES.

 

10

 

(ii)                                  Total amount invoiced for each PRODUCT (by
country, by month) in local currency.

 

(iii)                               Calculation of NET SALES (by country, by
month) in local currency for each PRODUCT.

 

(iv)                              Exchange rates for converting each local
currency into U.S. Dollars showing the source conversion rates used in
accordance with Section 3.2(f) for each month of the CALENDAR
QUARTER.

 

(v)                                 NET SALES in U.S. dollars in each country for
each PRODUCT.

 

(vi)                              Total compensation payable to MEDIMMUNE; or
to be credited to ABBOTT in accordance with Section 3.2(e).

 

(h)                                 INVENTORY RECONCILIATION
REPORT.  Within forty-five (45) days following the end
of each CONTRACT YEAR, ABBOTT shall provide MEDIMMUNE an inventory reconciliation
for such CONTRACT YEAR.

 

(i)                                     ABBOTT BOOKS AND RECORDS. 
ABBOTT shall keep, and shall cause each of its AFFILIATES to keep full
and accurate books of account containing all particulars that may be necessary
for the purpose of calculating all payments payable to MEDIMMUNE. Such books of
account shall be kept at their principal place of business and, with all
necessary supporting data shall, for the next two (2) years following the end
of the calendar year to which each shall pertain be open for inspection by an
independent certified accountant selected by MEDIMMUNE and reasonably
acceptable to ABBOTT upon reasonable notice during normal business hours, at
MEDIMMUNE’s expense, for the sole purpose of verifying payments or compliance
with this AGREEMENT, but in no event more than once in each calendar year. All
information and data offered shall be used only for the purpose of verifying
payments.  The independent certified
public accountant performing any such audit shall not disclose to MEDIMMUNE or
to any other Person any confidential information of ABBOTT or any of its
AFFILIATES.  The independent certified
public accountant shall report to MEDIMMUNE only the results of such audit and
only such underlying facts as is necessary to explain the results of such
audit.  In the event that such inspection
shall indicate that in any CONTRACT YEAR that the payments which should have
been paid by ABBOTT are at least five percent (5%) greater than those which
were actually paid by ABBOTT, then ABBOTT shall pay the cost of such
inspection. All underpayments are immediately due and payable.

 

(j)                                     PRODUCT EXPIRATION.  All
expired PRODUCT in ABBOTT’s possession shall be immediately destroyed by
ABBOTT, at ABBOTT’s expense, and evidence of such destruction shall be sent to
MEDIMMUNE.

 

(k)                                  REPORTS. 
Within forty-five (45) days following the end of each CALENDAR QUARTER,
as part of the report under Section 3.2(c), ABBOTT shall provide to
MEDIMMUNE a written country-by-country and PRODUCT-by-PRODUCT report of the
inventory and sales of each PRODUCT during each month of such CALENDAR QUARTER.

 

11

 

(l)                                     MEDIMMUNE BOOKS AND RECORDS. 
MEDIMMUNE shall keep, and shall cause each of its AFFILIATES to keep
full and accurate books of account containing all particulars that may be
necessary for the purpose of calculating all THIRD PARTY royalties on the
PRODUCT owing and/or paid by MEDIMMUNE and the calculation of the COST OF
GOODS.  Such books of account shall be
kept at their principal place of business and, with all necessary supporting
data shall, for the next two (2) years following the end of the calendar year
to which each shall pertain be open for inspection by an independent certified
public accountant selected by ABBOTT and reasonably acceptable to MEDIMMUNE
upon verifying such royalties or compliance with this AGREEMENT, but in no
event more than once in each calendar year. 
All information and data offered shall be used only for such purpose.  The independent certified public accountant
performing any such audit shall not disclose to ABBOTT or to any other Person
any confidential information of MEDIMMUNE or any of its AFFILIATES.  The independent certified public accountant
shall report to ABBOTT only the results of such audit and only such underlying
facts as is necessary to explain the results of such audit.  In the event that such inspection shall
indicate that in any CONTRACT YEAR, the THIRD PARTY royalties reported as owed
and/or paid by MEDIMMUNE  or the
calculation of the COST OF GOODS are at least five percent (5%) greater than
those which were actually owed and/or paid by MEDIMMUNE, then MEDIMMUNE shall
pay the cost of such inspection.  All
amounts reported as owed and/or paid for THIRD PARTY royalties which are in
excess of the amounts actually owed and/or paid by MEDIMMUNE on the PRODUCT
shall immediately be credited against any and all amounts due and owing by
ABBOTT to MEDIMMUNE under this AGREEMENT.

 

3.3                               [Reserved.]

 

3.4                               REVERSION EVENT.

 

(a)                                  REVERSION EVENT.  A
REVERSION EVENT will be deemed to have occurred if:

 

(i)                                     MEDIMMUNE is required by a REGULATORY
AUTHORITY in any country in the MAJOR MARKETS to discontinue due to a safety
concern or other reason beyond the control of MEDIMMUNE, the development of
NUMAX prior to obtaining REGULATORY APPROVAL for NUMAX in such country; provided,
however, that, a suspension of development activities for the purpose of
redesigning the protocols in response to a regulatory request or action shall
not be considered a discontinuation of development for purposes of this
subsection;

 

(ii)                                  the PARTIES mutually agree in writing that
the development of NUMAX should be discontinued prior to the filing for
REGULATORY APPROVAL of NUMAX in any country in the MAJOR MARKET due to material
adverse deviations from the anticipated safety profile for NUMAX that arise or
become known to either PARTY after the EFFECTIVE DATE;

 

12

 

(iii)                               [***]: (A) NUMAX has not received REGULATORY
APPROVAL in at least [***] of the MAJOR MARKETS, and (B) all pivotal clinical
trials for NUMAX in all countries of the MAJOR MARKETS, including but not
limited to the PHASE III CLINICAL TRIAL, have been terminated;

 

(iv)                              the PHASE III CLINICAL TRIAL is stopped
voluntarily by MEDIMMUNE; provided, however, that, a suspension of the PHASE
III CLINICAL TRIAL for the purpose of redesigning the protocols in response to
a regulatory request or action shall not be considered a stoppage of the PHASE
III CLINICAL TRIAL for purposes of this subsection;

 

(v)                                 the PHASE III CLINICAL TRIAL is (A)
permanently discontinued or (B) suspended and reasonably estimated to be
delayed for more than [***] from the date of suspension as a result of action
or inaction by a THIRD PARTY or by MEDIMMUNE, in either case as a result of
gross negligence or willful misconduct by MEDIMMUNE in the execution of (but
not the design, analysis, interpretation or any other aspect of) the PHASE III
CLINICAL TRIAL (e.g., for failure to pay the necessary clinical research
organization(s) to complete the trial).

 

Notwithstanding the foregoing, in the event that the
PHASE III CLINICAL TRIAL is ongoing on or after [***] and NUMAX has not been
approved in at least [***] of the MAJOR MARKETS, then at any time after [***],
subject to the limitation in Section 3.4(b), ABBOTT shall have the
sole discretion to declare a REVERSION EVENT upon ninety (90) days written
notice to MEDIMMUNE.

 

With respect to Section 3.2(a)(v) above,
a REVERSION EVENT shall only be deemed to have occurred upon a finding of gross
negligence or willful misconduct by a court of competent jurisdiction (or in
accordance with the alternate dispute resolution mechanism set forth provided
for in Section 15.7).  If, as
a result, a REVERSION EVENT has been deemed to have occurred and MEDIMMUNE
cures the cause of the discontinuation or delay within one (1) year following
the occurrence of such REVERSION EVENT, then no later than forty-five (45) days
after any notice of cure, ABBOTT shall have the right, in its sole discretion
and with written notice to MEDIMMUNE, to declare that a REVERSION EVENT did not
take place, in which case ABBOTT’s rights to NUMAX shall be reinstated as if
such REVERSION EVENT had not occurred and the FINAL PRICE from that point
forward shall also be calculated as if a REVERSION EVENT had not occurred.  In addition, no later than thirty (30) days
after the reinstatement of ABBOTT’s rights hereunder, ABBOTT shall pay
MEDIMMUNE [***] of the total amount of any excess of the FINAL PRICE that would
have been paid if the REVERSION EVENT had not occurred over the total amount of
the FINAL PRICE that was actually paid during the period that such REVERSION
EVENT existed.

 

(b)                                 LIMITATION ON REVERSION
EVENT.  Notwithstanding anything Section 3.4(a)
to the contrary, if, upon receipt of REGULATORY APPROVAL in [***] of the MAJOR
MARKETS a REVERSION EVENT has not previously occurred or been declared, then
for the remainder of the TERM this Section 3.4 shall be

 

13

 

deemed null and void (i.e., there shall not be a
REVERSION EVENT at any time thereafter).

 

3.5                               REASONABLE EFFORTS TO SUPPLY. 
Subject to this Section 3.5 and Section 5.2,
MEDIMMUNE agrees to use its COMMERCIALLY REASONABLE EFFORTS to supply ABBOTT
with ABBOTT’s requirements of each of the PRODUCTS for sale to customers in the
TERRITORY.  Following the LAUNCH of NUMAX
in any country in the TERRITORY, MEDIMMUNE shall continue to supply SYNAGIS to
ABBOTT for sale in all countries in the TERRITORY in which the relevant REGULATORY
AUTHORITIES have refused to permit ABBOTT to remove SYNAGIS from the market or
in which the transition of the market from SYNAGIS to NUMAX has not, in ABBOTT’s
determination after consultation with the Manufacturing Steering Committee,
been completed.  ABBOTT shall use
COMMERCIALLY REASONABLE EFFORTS to discontinue older PRODUCTS or formulations
of PRODUCTS (including, but not limited to, the lyophilized formulation of
SYNAGIS) or to transition from one PRODUCT to another as such new formulations
or PRODUCTS are made available by MEDIMMUNE per the direction of the
Manufacturing Steering Committee.

 

3.6                               SHORTAGE AND ALLOCATION. 
MEDIMMUNE’s obligation to supply PRODUCT under Section 3.1
hereof shall at all times be subject to the condition that MEDIMMUNE is able to
obtain or make a sufficient supply of such PRODUCT for sale both inside and
outside of the TERRITORY. In the event that PRODUCT available to MEDIMMUNE is
in short supply, MEDIMMUNE shall notify ABBOTT of such shortage as soon as
possible. In the event there is a short supply of PRODUCT and MEDIMMUNE cannot
supply PRODUCT to ABBOTT in an amount equal to ABBOTT’s FIRM ORDER, then
MEDIMMUNE shall allocate available PRODUCT to ABBOTT in each month that such a
shortfall exists (and in each month thereafter until the shortfall to ABBOTT is
remedied) in an amount equal to the product of (a) the amount of available
PRODUCT for that month and (b) a fraction the numerator of which is (1) the
aggregate quantity of FIRM ORDERS made by ABBOTT over the subsequent [***]
period including the shortfall month and the denominator of which is (2) the
sum of (x) the aggregate quantity of FIRM ORDERS made by ABBOTT over the
subsequent [***] period including the shortfall months and (y) the aggregate
quantity of PRODUCT over the same [***] period required by MEDIMMUNE outside
the TERRITORY by reference to FIRM ORDERS placed with THIRD PARTY MANUFACTURERS
for MEDIMMUNE’s requirements and the amount to be produced at a MEDIMMUNE
facility for MEDIMMUNE’s requirements, in each case outside the TERRITORY.  Notwithstanding the foregoing, provided that
ABBOTT has previously requested or consented in writing to the discontinuation
of a PRODUCT in one or more countries of the TERRITORY, MEDIMMUNE will not be
required to provide such PRODUCT in such countries for the remainder of the
TERM.

 

3.7                               [Reserved.]

 

3.8                               MINIMUM SALE THRESHHOLD. 
Notwithstanding anything to the contrary herein, in the event that the
NET SALES of all PRODUCTS in the TERRITORY fails to exceed [***] in any CONTRACT
YEAR, unless ABBOTT pays to MEDIMMUNE, within thirty (30) days following the
end of the CONTRACT YEAR, [***] of the difference between [***] and the NET
SALES achieved by ABBOTT, MEDIMMUNE may, at its sole discretion, convert the
exclusive rights granted herein to non-exclusive rights in the TERRITORY.

 

14

 

The PARTIES agree that the [***] minimum sales
threshold referenced in the preceding paragraph will be reduced as follows in
the event that ABBOTT’s rights to a PRODUCT in one or more countries are
terminated pursuant to Section 14.3:

 

(a)                                  if ABBOTT terminates its right to Canada, the
minimum sales threshold will be reduced by [***];

 

(b)                                 if ABBOTT terminates its right to all of the
countries of the European Union, the minimum sales threshold will be reduced by
[***]; and

 

(c)                                  if ABBOTT terminates its right to Japan, the
minimum sales threshold will be reduced by [***].

 

(b)                                 ABBOTT shall be excused from its minimum
sales obligations under this Section 3.8 with respect to any
CONTRACT YEAR in which the failure to meet such minimum sales requirement is
related to: (i) a failure by MEDIMMUNE to fill ABBOTT’s FIRM ORDERS during such
CONTRACT YEAR, (ii) MEDIMMUNE’s failure to promptly replace material quantities
of defective or non-conforming PRODUCT, or (iii) as a result of a THIRD PARTY
selling a product in the TERRITORY which infringes a granted patent in the
TERRITORY which is based on Patent Cooperation Treaty Application [***] and the
net sales of the infringing THIRD PARTY product is [***] of ABBOTT’s NET SALES
of PRODUCT in the TERRITORY in the applicable CONTRACT YEAR; provided, however
that, if ABBOTT’s failure to meet such obligations is not wholly due to a cause
set forth in subsections (i), (ii) or (iii) above, then applicable minimum
sales obligation threshold will be prorated to the extent such cause impaired
ABBOTT’s ability to meet its obligations.

 

4.                                      DELIVERY, PAYMENT AND RISK
OF LOSS

 

4.1                               (a)                                  CURRENCY.  All
payments under this AGREEMENT shall be remitted in immediately available funds.
Unless otherwise agreed between the PARTIES all payments shall be in U.S.
Dollars.

 

(b)                                 LATE FEES.  In
the event that any payment due hereunder is not made when due, the payment
shall accrue interest beginning on the first day of the month following the
date when such payment was due, calculated at the annual rate of the sum of (i)
two percent (2%) plus (ii) the prime interest rate quoted by Citibank, N.A.,
New York, New York, on the date such payment is due, or on the date payment is
made, whichever is higher, the interest being compounded on the last day of
each calendar month; provided that in no event shall said annual rate exceed
the maximum legal interest rate for corporations. Such payment when made shall
be accompanied by all interest accrued. 
Said interest and the payment and acceptance thereof shall not negate or
waive the right of MEDIMMUNE to any other remedy, legal or equitable, to which
MEDIMMUNE may be entitled because of the delinquency of the payment.

 

4.2                               TITLE AND RISK OF LOSS. 
Title to PRODUCT sold hereunder, and risk of loss with respect to such
PRODUCT, shall pass to ABBOTT upon delivery of the PRODUCT to a carrier
designated by ABBOTT at the place at which the PRODUCT is manufactured or

 

15

 

stored. Upon the passage of title, MEDIMMUNE’s
liability with respect to risk of loss shall cease, and ABBOTT shall be the
owner of such PRODUCT for all purposes, including, without limitation, the
marketing, sale and setting of prices for the PRODUCT sold by ABBOTT to its
customers.  ABBOTT shall, in writing,
provide MEDIMMUNE with instructions regarding the  delivery destination for each order of the
PRODUCT and MEDIMMUNE shall arrange the shipment of each order in accordance
with such instructions. ABBOTT shall be responsible for the cost of freight and
insurance with respect to each shipment of the PRODUCTS.

 

4.3                               CONFLICTING TERMS.  No
provision on ABBOTT’s purchase order forms which may purport to impose different
conditions upon the parties hereto shall modify the terms of this AGREEMENT.

 

5.                                      FORECASTS AND ORDERS

 

5.1                                 (a)                                  FORECASTS. 
ABBOTT shall provide MEDIMMUNE, on or before the tenth day of the last
month of each CALENDAR QUARTER, with a three-year product forecast planning
horizon for each PRODUCT.   The rolling
forecasts are to be broken down to single months and shall include the
anticipated quantity of PRODUCT in terms of the formulation and presentation of
each PRODUCT. The forecasts for each PRODUCT within the first year (months 1
through 12) are FIRM ORDERS and cannot be changed and the forecasts for the
second year (month 13 through 24) are partly binding forecasts which means that
the forecasts can be changed within this period. The forecasts can be increased
in consultation with the Manufacturing Steering Committee, but are limited to
the following restrictions when decreased:

 

	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

The forecast for the third year (months 25-36) is a
non-binding forecast.

 

Notwithstanding the foregoing, in the event that
MEDIMMUNE assumes the manufacture of any PRODUCT that is, as of the EFFECTIVE
DATE, manufactured by a THIRD PARTY MANUFACTURER, the PARTIES shall discuss, in
good faith, an adjustment to the forecast reductions that ABBOTT will be
permitted.  If the PARTIES cannot come to
an agreement regarding any such adjustment, the forecast reductions shall
remain as set forth above.

 

Notwithstanding the foregoing, MEDIMMUNE shall use
its COMMERCIALLY REASONABLE EFFORTS to comply with unplanned changes in FIRM
ORDERS, but shall not be held liable for its inability to do so. In each FIRM
ORDER for any month, ABBOTT shall state, after consultation with MEDIMMUNE, a
reasonable delivery schedule for PRODUCTS to be delivered in that month.

 

Notwithstanding anything to the contrary in this Section 5.1(a),
MEDIMMUNE reserves the right to spread the supply of PRODUCT throughout the

 

16

 

CONTRACT YEAR, provided that if the supply does not
meet the specified order dates, then the supply shall be reasonably related to
ABBOTT’s demand requirements for the PRODUCTS at the time of delivery in such
CONTRACT YEAR.

 

(b)                                 NUDE VIALS.  All
PRODUCT shall be supplied to ABBOTT by MEDIMMUNE and shall be ordered by ABBOTT
based on UNIT type; without labeling, packaging and packaging inserts. ABBOTT
shall be responsible for the labeling, packaging and packaging inserts of
PRODUCT at ABBOTT’s sole cost and expense (subject to MEDIMMUNE’s approval
right set forth in Section 2.3).

 

(c)                                  MINIMUM ORDER QUANTITY.  
Except as otherwise provided in Section 5.2 below, forecasts
and order totals for each CONTRACT YEAR shall be a minimum of [***] 100mg
equivalent vials for any one formulation of PRODUCT (e.g., lyophilized SYNAGIS,
the liquid formulation of SYNAGIS or NUMAX) (“Minimum Order Quantity”).  Notwithstanding the foregoing, during the
period of conversion of the market to the liquid formulation of SYNAGIS or to
NUMAX,  ABBOTT shall, upon prior approval
of the Manufacturing Steering Committee, be entitled to order less than the
Minimum Order Quantity.  In any CONTRACT
YEAR of conversion described above, in the event that ABBOTT does not order the
Minimum Order Quantity and has not obtained Manufacturing Steering Committee
approval, then ABBOTT shall pay MEDIMMUNE an amount equal to the COST OF GOODS
(plus royalties, if any, due by MEDIMMUNE to any THIRD PARTIES on such COST OF
GOODS) multiplied by the amount by which the number of UNITS ordered by
ABBOTT in any CONTRACT YEAR is less than the Minimum Order Quantity (such
amount, the “Deficiency”).  For the sake
of clarity, in the event the Manufacturing Steering Committee has approved the
ordering of less than the Minimum Order Quantity, ABBOTT shall not be liable to
pay the Deficiency.  ABBOTT shall pay
MEDIMMUNE any amount due hereunder no later than thirty (30) days after the end
of the applicable CONTRACT YEAR.

 

5.2                                 SUPPLY HARMONIZATION.  
ABBOTT and MEDIMMUNE shall jointly create a steering committee (“Manufacturing
Steering Committee”) to coordinate: (a) the material management/supply chain
logistics related to the partial or complete conversion of one formulation of a
PRODUCT to another (including, but not limited to, the conversion from the
lyophilized formulation of SYNAGIS to the liquid formulation of SYNAGIS), (b)
the manufacture and distribution of the PRODUCTS in the event of the
introduction of any PRODUCT or formulation of the PRODUCT in the TERRITORY
(including any related REGULATORY FILINGS or communications related to
REGULATORY APPROVAL thereof, but in each such case only to the extent
specifically related to the manufacture or distribution of the PRODUCTS), (c)
the development and management of change control processes for any PRODUCT, (d)
the development of an inventory management process for any PRODUCT, (e)
participation in THIRD PARTY MANUFACTURER interactions, and (f) any adjustment
of the minimum order quantities set forth in Section 5.1(c) above, as
necessary to facilitate any launch of NUMAX or of the liquid formulation of
SYNAGIS and to minimize the amount of expired PRODUCT.  The Manufacturing Steering Committee shall
develop and implement plans for the initial introduction of the PRODUCT or
conversion of any formulation of the PRODUCT with the goal of  minimizing the amount of expired PRODUCT or
formulation upon conversion.  Except as
otherwise provided under Section 7.7(b), a deadlock with respect

 

17

 

to any decision to be reached by the Manufacturing
Steering Committee shall be resolved by MEDIMMUNE; provided, however,
that (i) the Manufacturing Steering Committee may not wholly discontinue the
production of either SYNAGIS or NUMAX or an approved presentation (e.g., 50mg
vials and 100mg vials) without ABBOTT’s consent, and (ii) ABBOTT shall have the
final decision making authority with respect to the management of the inventory
of PRODUCT and ordering of PRODUCT consistent with Section 5.1.  The PARTIES shall use COMMERCIALLY REASONABLE
EFFORTS to convene the first Manufacturing Steering Committee meeting within
forty-five (45) days after the EFFECTIVE DATE and, thereafter the Manufacturing
Steering Committee shall convene as frequently as necessary, but not less than once
every CALENDAR QUARTER.

 

6.                                       REGULATORY AND CLINICAL
DEVELOPMENT ISSUES

 

6.1                               REGULATORY FILINGS AND FEES. 
ABBOTT shall use COMMERCIALLY REASONABLE EFFORTS to obtain REGULATORY
APPROVAL for NUMAX in all countries in the TERRITORY in which, in ABBOTT’s reasonable
determination, the market potential of NUMAX in such country warrants seeking
such REGULATORY APPROVAL, but at least in all countries in the MAJOR MARKETS, and
to seek the most favorable reimbursement rates for NUMAX in such countries
(consistent with applicable law). 
MEDIMMUNE shall provide ABBOTT with any support and documentation
reasonably requested by ABBOTT to make such REGULATORY FILINGS.  ABBOTT shall be solely responsible for the
preparation, filing, presentation and maintenance of all REGULATORY FILINGS
and, subject to the satisfaction by MEDIMMUNE of its obligations under this
AGREEMENT, for obtaining all REGULATORY APPROVALS for the PRODUCTS.  All REGULATORY APPROVALS for NUMAX shall be
owned by and held by ABBOTT or its AFFILIATES. 
Except as otherwise specifically provided under Sections 7.7 and 7.8,
ABBOTT shall be responsible for all filing, user and other administrative fees
associated with: (a) the submission of REGULATORY FILINGS for PRODUCT in the
TERRITORY, and (b) for obtaining and maintaining the REGULATORY APPROVALS for
each PRODUCT in the TERRITORY.  ABBOTT
shall exercise COMMERCIALLY REASONABLE EFFORTS to maintain REGULATORY
APPROVAL,  pricing approval and
reimbursement approval for each PRODUCT in each country of the TERRITORY in
which REGULATORY APPROVAL is obtained. 
Notwithstanding anything in the foregoing to the contrary, if the
REGULATORY AUTHORITIES in any country in the TERRITORY require one or more
additional post-approval studies (other than studies related to Discretionary
Changes or Required Changes (which are addressed in Section 7.7)) (“POST-APPROVAL
STUDIES”) to obtain or maintain REGULATORY APPROVAL, and ABBOTT reasonably
determines that the cost of conducting such POST-APPROVAL STUDIES is not
commercially feasible in light of the size and potential of the market for the
PRODUCT in such country, MEDIMMUNE may, but shall not be required to, conduct
such required POST-APPROVAL STUDIES. 
Upon completion of such POST-APPROVAL STUDIES by MEDIMMUNE, ABBOTT shall
be entitled to assume the responsibility of obtaining REGULATORY APPROVAL in
such country provided that the PARTIES are able to successfully negotiate the
commercial terms by which MEDIMMUNE will be compensated for the actual costs
incurred by MEDIMMUNE in connection with the POST-APPROVAL STUDIES conducted by
MEDIMMUNE.  In the event that the PARTIES
are unable to negotiate the terms of compensation to MEDIMMUNE for the
POST-APPROVAL STUDIES, ABBOTT’s rights to such PRODUCT in such country shall be
forfeited.  For the sake of

 

18

 

clarity, a forfeiture of ABBOTT’s rights pursuant to
the preceding sentence, shall not be a considered a REVERSION EVENT for
purposes of Section 3.4.

 

6.2                                 [Reserved.]

 

6.3                                 COMMUNICATION WITH
REGULATORY AUTHORITIES.  Except as otherwise specifically provided
herein, ABBOTT shall have sole responsibility for communicating with the REGULATORY
AUTHORITIES in the TERRITORY regarding all regulatory matters with respect to
the PRODUCTS and MEDIMMUNE shall have sole responsibility for communicating
with any REGULATORY AUTHORITIES outside the TERRITORY with respect to the
PRODUCTS.  ABBOTT acknowledges that prior
to the EFFECTIVE DATE, MEDIMMUNE has had communications with REGULATORY
AUTHORITIES in the TERRITORY regarding NUMAX. 
Accordingly, the PARTIES agree to work cooperatively to transition
responsibility to make REGULATORY FILINGS to ABBOTT.

 

Each PARTY shall provide the other PARTY with an
opportunity, in advance of any REGULATORY FILING to, or material communications
with, any REGULATORY AUTHORITY in the MAJOR MARKETS or the United States to
review and comment on all REGULATORY FILINGS or communications (including
written responses to any REGULATORY AUTHORITY questions) regarding the PRODUCTS,
including, but not limited to any such REGULATORY FILINGS or communications
related to the design or conduct of a clinical trial for the PRODUCTS.  Notwithstanding the foregoing, the filing
PARTY shall, in its sole discretion, determine the timing, manner and content
of any submission to or communication with any REGULATORY AUTHORITY.  Each PARTY shall provide the other PARTY with
copies of all material written communications between the PARTY and REGULATORY
AUTHORITIES in the MAJOR MARKETS or the United States and any adverse finding
or communication, oral or written, by any such REGULATORY AUTHORITIES regarding
the PRODUCTS.

 

6.4                                 MEETINGS WITH REGULATORY
AUTHORITIES.  Each PARTY shall notify the other PARTY
regarding upcoming meetings between the PARTY and REGULATORY AUTHORITIES at
which a matter material to obtaining or maintaining REGULATORY APPROVAL of the
PRODUCT in the MAJOR MARKETS or the United States (including, but not limited
to related to the design or conduct of a clinical trial from which data is
expected to be used towards REGULATORY APPROVAL for such PRODUCT) in the
jurisdiction governed by such REGULATORY AUTHORITY is expected to be
discussed.  No later than thirty (30)
days prior to any meeting with any REGULATORY AUTHORITIES in the MAJOR MARKETS
or the United States, the PARTIES shall convene to discuss the matter(s) to be
addressed at such meeting.  To the extent
permissible, the non-filing PARTY shall have the right to participate, at its
own expense, in any such meeting between the PARTY and the REGULATORY
AUTHORITIES.  Each PARTY agrees that the
non-filing PARTY’s presence at such meeting shall be, at the discretion of the
filing PARTY, in an observational capacity only.  The filing PARTY shall have the sole
discretion regarding all presentations, discussions and statements made and
strategies employed at any meeting with REGULATORY AUTHORITIES.  Each PARTY’s obligation to provide
information under this Section 6.4, shall be limited to providing
such information as could reasonably be expected to affect the other PARTY’s
REGULATORY FILINGS.

 

19

 

6.5                                 CLINICAL AND REGULATORY
INFORMATION.

 

(a)                                  BY MEDIMMUNE.  To
the extent not provided to ABBOTT prior to the EFFECTIVE DATE and to the extent
MEDIMMUNE develops or has developed any data or information consistent with the
terms of this AGREEMENT that was not initially provided to MEDIMMUNE by
ABBOTT,  MEDIMMUNE shall, as soon as practical after the EFFECTIVE DATE and on a
periodic basis, provide ABBOTT with data and information that MEDIMMUNE has in
its possession with respect to NUMAX and the liquid formulation of SYNAGIS that
is necessary for ABBOTT to obtain appropriate REGULATORY APPROVALS in the
TERRITORY, which data and information may include, but would not be limited to,
filings with the FDA to the extent such information could reasonably be
expected to affect ABBOTT’s REGULATORY FILINGS in the TERRITORY.  Notwithstanding the foregoing, primary source
data will only be made available upon request from the REGULATORY AUTHORITY
where required for REGULATORY APPROVAL. 
All such information provided by MEDIMMUNE shall be in the English
language.  MEDIMMUNE and ABBOTT shall,
through the DEVELOPMENT COMMITTEE, jointly coordinate the best regulatory approach
and filing strategy necessary to assure the successful submission and approval
of NUMAX and the liquid formulation of SYNAGIS in the TERRITORY.  MEDIMMUNE shall provide ABBOTT reasonable
technical assistance and cooperation in connection with ABBOTT’s efforts in
obtaining and maintaining REGULATORY APPROVAL of NUMAX and the liquid
formulation of SYNAGIS in each MAJOR MARKET. 
MEDIMMUNE shall provide ABBOTT access to MEDIMMUNE’s clinical database
and master SAS database upon reasonable notice solely to enable ABBOTT to
expediently respond to queries from REGULATORY AUTHORITIES in the TERRITORY
regarding the PRODUCTS, including but not limited to, data regarding the Phase
III pivotal clinical trials for SYNAGIS; provided, however, that
any response to such queries shall be first submitted to MEDIMMUNE for review
and comment.  Any analysis, reports and
other materials prepared from the information provided under this Section 5.5,
will be made available to MEDIMMUNE consistent with Section 7.1 and
other applicable provisions of this AGREEMENT.  
Such analysis, reports and other materials shall be used for the sole
purpose of obtaining REGULATORY APPROVAL or for any other purpose approved by
the DEVELOPMENT COMMITTEE.

 

(b)                                 BY ABBOTT.  To
the extent not provided to MEDIMMUNE prior to the EFFECTIVE DATE and to the
extent ABBOTT develops or has developed any data or information consistent with
the terms of this AGREEMENT that was not initially provided to ABBOTT by
MEDIMMUNE, ABBOTT shall, as soon as
practical after the EFFECTIVE DATE and on a periodic basis, provide MEDIMMUNE
with data and information that ABBOTT has in its possession with respect to
NUMAX and the liquid formulation of SYNAGIS that is necessary for MEDIMMUNE to
obtain appropriate REGULATORY APPROVALS outside the TERRITORY, which data and
information may include, but would not be limited to, filings with the
REGULATORY AUTHORITIES in the MAJOR MARKETS to the extent such information
could reasonably be expected to affect MEDIMMUNE’s REGULATORY FILINGS outside
the TERRITORY.  Notwithstanding the
foregoing, primary source data will only be made available upon request from
the REGULATORY

 

20

 

AUTHORITY where required for REGULATORY
APPROVAL.  All such information provided
by ABBOTT shall be in the English language. 
ABBOTT shall provide MEDIMMUNE reasonable technical assistance and
cooperation in connection with MEDIMMUNE’s access of data for the purpose of
obtaining and obtaining and maintaining REGULATORY APPROVAL of NUMAX and the
liquid formulation of SYNAGIS outside of the TERRITORY.  ABBOTT shall provide MEDIMMUNE access to
ABBOTT’s clinical database and master SAS database upon reasonable notice
solely to enable MEDIMMUNE to expediently respond to queries from REGULATORY
AUTHORITIES outside the TERRITORY regarding the PRODUCTS.  Any analysis, reports and other materials
prepared from the information provided under this Section 5.5, will
be made available to ABBOTT consistent with Section 7.1 and other
applicable provisions of this AGREEMENT.  
Such analysis, reports and other materials shall be used for the sole
purpose of obtaining REGULATORY APPROVAL or for any other purpose approved by
the DEVELOPMENT COMMITTEE.

 

6.6                                 JOINT DEVELOPMENT COMMITTEE.

 

(a)                                  The PARTIES agree to form a joint DEVELOPMENT
COMMITTEE comprised of senior management of each PARTY (“DEVELOPMENT COMMITTEE”).  The PARTIES shall use COMMERCIALLY REASONABLE
EFFORTS to have a meeting of the DEVELOPMENT COMMITTEE within forty-five days after
the EFFECTIVE DATE and thereafter once every CALENDAR QUARTER, or more
frequently if mutually agreed upon by the PARTIES, (i) to discuss and
coordinate clinical development plans for PRODUCTS, (ii) to update the other
PARTY on and discuss the design, analysis plan, execution plan, timeline of any
proposed clinical trial and any related proposal developed in accordance with
the clinical development plans (provided however that the PHASE III CLINICAL
TRIAL and any other existing ongoing clinical trials with respect to NUMAX and
the liquid formulation of SYNAGIS will not be subject to discussion under this Section 6.6),
(iii) to review and approve any proposed clinical trials of the PRODUCTS in the
TERRITORY consistent with Section 6.8, (iv) to coordinate the
strategy of submissions of the REGULATORY FILINGS to REGULATORY AUTHORITIES in
the TERRITORY with respect to NUMAX, (v) to review and approve or reject the
publication of data and information with respect to the PRODUCTS as set forth
in Section 6.11 and (vi) to provide updates of the status of and
coordinate completion of the project to remove animal proteins from the working
cell banks for the PRODUCT.   The
DEVELOPMENT COMMITTEE shall not make the decision to take any action or
inaction which conflicts with or fails to conform to the applicable laws in any
country in the TERRITORY.  A deadlock
with respect to any matter submitted to the DEVELOPMENT COMMITTEE shall be
referred to the respective executive officers of the PARTIES for resolution,
who shall have ten (10) business days to resolve the deadlock.  If such executive officers are unable to
resolve the deadlock, MEDIMMUNE shall have the final decision with respect to
the deadlock.  For clarity, no clinical
trials for PRODUCTS will be initiated by ABBOTT without approval of the
DEVELOPMENT COMMITTEE.

 

(b)                                 MEDIMMUNE shall periodically, and at least
semi-annually, submit comprehensive and complete reports to the DEVELOPMENT
COMMITTEE, in MEDIMMUNE’s format, regarding activities undertaken by or on behalf
of

 

21

 

MEDIMMUNE with respect to the development of NUMAX,
and specifically on activities and 
studies/trials undertaken by MEDIMMUNE pursuant to MEDIMMUNE’s
development plan for NUMAX, including their progress, status and outcome as
well as major findings and major decision points, as applicable, so as to keep
the DEVELOPMENT COMMITTEE fully advised of MEDIMMUNE’s development activities
with respect to NUMAX.

 

(c)                                  ABBOTT shall periodically, and at least semi-annually,
submit comprehensive and complete reports to the DEVELOPMENT COMMITTEE, in
ABBOTT’s format, regarding activities previously approved by the DEVELOPMENT
COMMITTEE and undertaken by or on behalf of ABBOTT with respect to the
development of NUMAX, including their progress, status and outcome as well as
major findings and major decision points, as applicable, so as to  keep the DEVELOPMENT COMMITTEE fully advised
of ABBOTT’s development activities with respect to NUMAX.

 

(d)                                 Notwithstanding anything in this Section 6.6
to the contrary, following approval of NUMAX by the REGULATORY AUTHORITIES in
the MAJOR MARKETS the PARTIES shall meet from time to time to review and revise
as necessary the obligations of the DEVELOPMENT COMMITTEE to meet regularly and
to receive regular reports (but any such changes will not, in any event, affect
the responsibilities of the DEVELOPMENT COMMITTEE set forth in this AGREEMENT).

 

6.7                                 [Reserved.]

 

6.8                                 CLINICAL TRIALS.  

 

(a)                                  MEDIMMUNE’S COMMITMENT. 
MEDIMMUNE shall be solely responsible for using its COMMERCIALLY
REASONABLE EFFORTS to conduct (and shall bear all costs and expenses related to
conducting) the pre-approval clinical development of NUMAX described in the
Development Plans attached as Exhibit 6.8 hereto, including all costs
and expenses related to the PHASE III CLINICAL TRIAL and, if required by the
applicable REGULATORY AUTHORITIES for approval of NUMAX, a safety study in
patients with congenital heart disease for approval of NUMAX in the MAJOR
MARKETS and/or safety study(ies) for approval of NUMAX in Japan (each, a “Safety
Study” and collectively, the “Safety Studies”). 
For the purposes of the preceding sentence, a Safety Study shall mean a
clinical trial designed to show that NUMAX is safe in the indicated populations,
but not an efficacy study or a comparative study against SYNAGIS, regardless,
in each case, of whether any such study is also designed to show safety in the
indicated populations.  Notwithstanding
anything in the foregoing to the contrary, MEDIMMUNE shall have no obligation
to conduct the Safety Studies if the expenditures for the Safety Studies in the
aggregate are reasonably projected by the DEVELOPMENT COMMITTEE to be more than
[***] or if the Safety Studies collectively
require enrollment of substantially more than [***] patients.

 

In addition, MEDIMMUNE agrees to be solely
responsible for all pre-approval clinical development costs and expenses
related to any future indications (i.e., other than the indications to be
sought based on the Development Plans) of

 

22

 

NUMAX. 
MEDIMMUNE acknowledges that ABBOTT shall have no responsibility to
provide funding for any clinical development cost and expenses solely for use
outside of the TERRITORY.  ABBOTT shall
have the right to make recommendations with respect to the design and execution
of any clinical trials for NUMAX through the DEVELOPMENT COMMITTEE and
MEDIMMUNE agrees to consider any recommendations made by ABBOTT with respect to
any such clinical trials; provided, however, that, ABBOTT may not
alter or comment on the design of the PHASE III CLINICAL TRIAL as in effect as
of the EFFECTIVE DATE.  For clarity,
MEDIMMUNE shall have the right to terminate any clinical trials for which it is
responsible under this Section 6.8(a) to the extent it has expended
COMMERCIALLY REASONABLE EFFORTS and has determined that termination of such
trial is commercially appropriate under the circumstances.

 

(b)                                 ABBOTT’S COMMITMENT. 
ABBOTT shall be solely responsible for using its COMMERCIALLY REASONABLE
EFFORTS to conduct (and shall bear all costs and expenses related to
conducting) pre-approval clinical trials for NUMAX which are specific to a
country in the TERRITORY other than those described as MEDIMMUNE’s obligations
under Section 6.8(a) and, as set forth in Section 6.1, all
POST-APPROVAL STUDIES of the PRODUCTS, in each case as approved by the
DEVELOPMENT COMMITTEE.  Notwithstanding
the foregoing sentence, in the event that MEDIMMUNE discontinues the [***] on or prior to [***] other than for reasons associated with the
safety or efficacy of NUMAX, then MEDIMMUNE hereby agrees to conduct one or
more pre-approval clinical trials proposed by ABBOTT and approved by the
DEVELOPMENT COMMITTEE.  MEDIMMUNE shall
solely bear the costs of such clinical trial(s) proposed by ABBOTT up to, but
not more than, [***].  Any
costs associated with the conduct of such clinical trial(s) proposed by ABBOTT
in excess of [***] shall be borne by ABBOTT.

 

For clarity, ABBOTT shall have the right to
terminate any clinical trials for which it is responsible under this Section 6.8(b)
to the extent it has expended COMMERCIALLY REASONABLE EFFORTS and has
determined that termination of such trial is commercially appropriate under the
circumstances.

 

(c)                                  COORDINATION.

 

(i)                                     Other than the obligations of each PARTY to
bear the cost and expenses of clinical trials as set forth in Section 6.8(a)
or Section 6.8(b), if any clinical trials are designed to be used
for REGULATORY APPROVAL in the TERRITORY and outside the TERRITORY, the PARTIES
shall meet and agree to discuss in good faith a reasonable allocation of costs
and expenses related to any such trials.

 

(ii)                                  Any clinical trials to be conducted by either
PARTY pursuant to this AGREEMENT must be approved in advance by the DEVELOPMENT
COMMITTEE; provided, however, that the DEVELOPMENT COMMITTEE
shall not have the right to alter the obligations of each PARTY to conduct
clinical trials to the

 

23

 

                extent required pursuant to this Section 6.8
or the payment obligation of the PARTIES.

 

(iii)                               Each PARTY shall exercise its COMMERCIALLY
REASONABLE EFFORTS to initiate a clinical trial as soon as practicable after
approval of such trial by the DEVELOPMENT COMMITTEE.

 

(iv)                              Where commercially reasonably, one PARTY may
request and the other PARTY may, but shall not be required to, allow requesting
PARTY to conduct one or more clinical trials on the other PARTY’s behalf, but
honoring any such request shall not alter the obligations to provide funding
for such clinical trials set forth in this Section 6.8.

 

(v)                                 For clarity, termination of a clinical trial
by either PARTY in accordance with this Section 6.8 shall not be
deemed to affect the rights of either PARTY provided elsewhere in this
AGREEMENT as to the effect of such termination.

 

6.9                                 REPRESENTATION WITH RESPECT
TO CLINICAL TRIALS.  MEDIMMUNE represents that on or prior to the
EFFECTIVE DATE, MEDIMMUNE has disclosed to ABBOTT: (a) all material aspects of
the strategy, status and results of the Development Plans, (b) all known
results which have undergone a complete analysis by MEDIMMUNE of any completed
or unblinded clinical trials conducted by MEDIMMUNE or any THIRD PARTY
conducting such trials on behalf of MEDIMMUNE as of the EFFECTIVE DATE, (c) all
serious adverse event information involving NUMAX that have been notified to
MEDIMMUNE, and (d) all materials aspects and findings of the PHASE III CLINICAL
TRIAL.

 

6.10                           PUBLICATIONS. 
Neither PARTY shall publish or present the results of any research,
development or any other information relating to any PRODUCT without securing
the prior approval of the DEVELOPMENT COMMITTEE, including but not limited to,
data presented with respect to any PRODUCT at key medical meetings, releases
developed by either PARTY in conjunction with key medical institutions, and
other releases used in support of brand positioning and educational campaigns
related to any PRODUCT.  The PARTY
desiring to publish any abstract, manuscript or presentation with respect to
any PRODUCT shall submit such document for review to the DEVELOPMENT COMMITTEE
sufficiently in advance of the proposed date of submission of the publication
so that, where reasonable under the circumstances, such DEVELOPMENT COMMITTEE
has at least forty-five (45) days to review the proposed publication.  The DEVELOPMENT COMMITTEE will use its best
efforts to expedite the review of any publications that are time sensitive.  Either PARTY shall be entitled to use the
data provided by the other hereunder for the purposes of creating marketing and
promotional material for use by ABBOTT in the TERRITORY and by MEDIMMUNE
outside of the TERRITORY; provided, however, that, any such
material shall be submitted to the DEVELOPMENT COMMITTEE for review and
approval prior to its use or publication. Notwithstanding anything in this Section 6.10
to the contrary, neither PARTY shall be required to seek the approval of the
other PARTY for the publication of the results of research, development or any
other information relating to any PRODUCTS that has been submitted to any THIRD
PARTY for publication on or prior to the EFFECTIVE

 

24

 

DATE; provided, however, that ABBOTT
shall provide MEDIMMUNE with copies of all such publications (or pending
publications) within forty-five (45) days after the EFFECTIVE DATE.  Both PARTIES shall maintain the
confidentiality of the results and data provided to the other PARTY hereunder
in accordance with Section 8.5.

 

6.11                           TRADE SECRETS.  Notwithstanding anything in this AGREEMENT to the contrary, in the
event that any REGULATORY FILING or REGULATORY AUTHORITIES require information
that is reasonably considered to be a trade secret by MEDIMMUNE, MEDIMMUNE
shall be entitled to provide such information directly to the applicable
REGULATORY AUTHORITY in a master file or other REGULATORY FILING without
providing ABBOTT a copy of or access to such information.

 

7.                                      OTHER RESPONSIBILITIES OF
MEDIMMUNE.

 

7.1                               ACCESS TO INFORMATION
RELATING TO SALE AND MARKETING.  Other than with respect to
information provided in accordance with the schedule set forth in Section 6.10,
MEDIMMUNE shall promptly notify ABBOTT and grant ABBOTT access to all data or
documents regarding the PRODUCTS in the TERRITORY for which REGULATORY APPROVAL
has been obtained that may reasonably be expected to materially impact the
marketing and sale of the PRODUCTS in the TERRITORY or require disclosures or
notifications to REGULATORY AUTHORITIES in the TERRITORY,  including but not limited to, any material
data, documentation and information derived from any life cycle management
projects, Phase IV trials, and correspondence and discussions with the FDA or
other REGULATORY AUTHORITIES.  MEDIMMUNE
shall also advise ABBOTT of any occurrence or information which arise out of
the manufacturing activities engaged by MEDIMMUNE or, if known to MEDIMMUNE, by
its THIRD PARTY MANUFACTURER, which have, in MEDIMMUNE’s reasonable judgment,
adverse regulatory compliance and/or reporting consequences or adverse impact
on the sale of the PRODUCTS in the TERRITORY. 
MEDIMMUNE shall be responsible for handling and responding to any
appropriate REGULATORY AUTHORITY inspection with respect to its manufacturing
of the PRODUCTS, and shall keep ABBOTT duly informed with respect thereto.

 

ABBOTT shall promptly notify MEDIMMUNE and grant
MEDIMMUNE access to all data or document regarding the PRODUCTS that may
reasonably be expected to materially impact the marketing and sale of the
PRODUCTS or require disclosures or notifications to REGULATORY AUTHORITIES,
including but not limited to, any material data, documentation and information
derived from any life cycle management projects, Phase IV trials,
correspondence and discussions with the REGULATORY AUTHORITIES.

 

7.2                               QUALITY ASSURANCE.

 

(a)                                  MEDIMMUNE
warrants and represents that the PRODUCTS manufactured by MEDIMMUNE, its
AFFILIATES or subcontractors and delivered to ABBOTT or its AFFILIATES
hereunder shall:  (i) upon delivery of
the PRODUCT, conform to the SPECIFICATIONS, and shall be in full conformity
with all applicable laws and regulations relating to the manufacture of the
PRODUCTS, including, but not limited to, applicable laws in the country in
which the PRODUCT is manufactured and cGMP practices, in each case to the
extent applicable to MEDIMMUNE, its AFFILIATES or subcontractors as the

 

25

 

manufacturer(s) of the PRODUCTS and (ii) at the time of delivery, shall
be free and clear of any and all liens, encumbrances and security
interests.  ABBOTT shall use COMMERCIALLY
REASONABLE EFFORTS to advise and inform MEDIMMUNE regarding the cGMP
requirements of REGULATORY AUTHORITIES in the countries in the MAJOR MARKETS.  MEDIMMUNE shall take COMMERCIALLY REASONABLE EFFORTS
to comply with the cGMP requirements of such REGULATORY AUTHORITIES if
commercially reasonable to make such changes, and ABBOTT shall use its
COMMERCIALLY REASONABLE EFFORTS to have any such changes approved by the
applicable REGULATORY AUTHORITIES. 
ABBOTT’s inability to market, promote, sell or distribute the PRODUCT in
any country as a consequence of the failure to comply with the cGMP
requirements of the REGULATORY AUTHORITIES in such country(ies) shall not be
regarded as a failure by ABBOTT to market, promote, sell or distribute for
purposes of any term in this AGREEMENT

 

(b)                                 Within ninety
(90) days following the EFFECTIVE DATE, the PARTIES shall use their
COMMERICALLY REASONABLE EFFORTS to enter into a quality/technical agreement
addressing release and quality testing of the PRODUCTS.  In reaching such an agreement, the PARTIES
will discuss in good faith:  (i) product
identification requirements for nude vials, (ii) such other product release and
quality assurance matters as may be identified on or after the EFFECTIVE DATE
and (iii) any other matters customarily addressed in a quality/technical
agreement (including, but not limited to the matters set forth on Exhibit
7.2) or legally required to be addressed under the laws or regulations of
the country in which the PRODUCTS are manufactured.  The quality/technical agreement shall
provide at a minimum that MEDIMMUNE shall provide ABBOTT with documentation or
evidence reasonably requested by ABBOTT (other than as may be reasonably
required to protect MEDIMMUNE trade secrets) to demonstrate that the PRODUCTS
are manufactured under adequate cGMP controls and generally accepted quality
standards.  The terms and provisions of the
quality/technical agreement shall, upon execution, be incorporated herein by
reference and shall control over any conflicting provisions of this AGREEMENT.

 

(c)                                  MEDIMMUNE
shall also use its COMMERCIALLY REASONABLE EFFORTS to require any THIRD PARTY
MANUFACTURER of the PRODUCT to enter into a quality/technical agreement with
MEDIMMUNE with respect to the release and quality testing of the PRODUCTS
manufactured by such THIRD PARTY and such other product quality assurance
matters as required in accordance all applicable laws and regulations relating
to the manufacture of the PRODUCTS, including, but not limited to, applicable
laws in the countries in the TERRITORY.

 

7.3                               PRODUCT DEFECTS AND NON-CONFORMITY.

 

(a)                                  ABBOTT shall promptly upon receipt of
any PRODUCT inspect or cause to be inspected a representative sample of each
batch of PRODUCT supplied by MEDIMMUNE or MEDIMMUNE’s THIRD PARTY
MANUFACTURER.  Any claims regarding the
quality or quantity of the any PRODUCT supplied pursuant to this AGREEMENT
shall be made in writing, specifying in reasonable detail

 

26

 

the nature of the
defect, non-conformity with SPECIFICATIONS, or other basis for the claim and
citing relevant control numbers or other information to enable specific
identification of the PRODUCT in question. 
Any such claim for defective or non-conforming PRODUCT shall be made by
ABBOTT within forty-five (45) days of receipt of the PRODUCT by ABBOTT.

 

(b)                                 Notwithstanding
anything in this AGREEMENT to the contrary, any NUMAX delivered hereunder that
has a remaining shelf-life of less than the lesser of (i) [***] or (ii) [***] of the
approved shelf-life at the time of delivery [***], shall be considered defective for purposes
of the remedies set forth in this Section 7.3, except to the extent
ABBOTT is made aware of a shorter remaining shelf-life prior to delivery and
still requests shipment.

 

(c)                                  MEDIMMUNE or
its designee shall have the right to first inspect any PRODUCT involved before
being required to take any action with respect thereto.  MEDIMMUNE shall review any claim of defective
or non-conforming PRODUCT made by ABBOTT within ten (10) business days of
receipt and conduct any required testing of the PRODUCT involved as soon as
possible, but in no event later than forty-five (45) days after receipt thereof
or earlier if the REGULATORY AUTHORITY in the TERRITORY requires an earlier
response. Any out-of-pocket costs incurred by MEDIMMUNE related to any such
testing shall be paid by ABBOTT, but shall be reimbursed by MEDIMMUNE if the
PRODUCT is found to be defective as a result of such testing.  If such review and testing by MEDIMMUNE
confirms that the PRODUCT is defective or non-conforming, then, at MEDIMMUNE’s
expense, ABBOTT shall dispose of or return the defective or non-conforming
PRODUCT as MEDIMMUNE shall direct in writing and MEDIMMUNE shall replace such
PRODUCT with non-defective or conforming PRODUCT as soon as possible, but in no
event later than six (6) months after final results of any testing have been
obtained.  Replacement of the PRODUCT
shall be ABBOTT’s sole and exclusive remedy for any defective or non-conforming
PRODUCT delivered by MEDIMMUNE or its THIRD PARTY MANUFACTURER.

 

(d)                                 If the PARTIES
fail to agree as to whether any PRODUCT supplied by MEDIMMUNE or its THIRD
PARTY MANUFACTURER is defective or non-conforming, then the Parties shall refer
such dispute for resolution to a competent independent testing laboratory
agreed in good faith between the PARTIES or, if the cost of using an
independent testing laboratory would make such a process commercially
unreasonable, the PARTIES will work together to devise a mutually agreeable set
of tests to be performed by MEDIMMUNE. 
In the event that such laboratory or MEDIMMUNE determines that such
PRODUCTS were defective or non-conforming, MEDIMMUNE will bear all costs of such
testing and analysis.  If, by contrast,
such laboratory determines that such PRODUCTS were not defective or
non-conforming, then ABBOTT will bear all costs of such testing and analysis.  In all such cases, the laboratory’s
determination (or the agreed upon tests performed by MEDIMMUNE) shall be final.

 

7.4                               INSPECTION BY REGULATORY AUTHORITIES.  MEDIMMUNE shall allow, and will exert its
COMMERCIALLY REASONABLE EFFORTS to cause any THIRD PARTY MANUFACTURER of any
PRODUCT to allow, representatives of any REGULATORY AUTHORITY in the TERRITORY
with jurisdiction over the

 

27

 

manufacture, marketing and distribution of the PRODUCT to tour and
inspect all facilities utilized by MEDIMMUNE or its THIRD PARTY MANUFACTURER in
the manufacture, testing, packaging, storage, and shipment of PRODUCTS, solely
for the purpose of applying for or maintaining REGULATORY APPROVAL (any other
requests for inspections will be assessed by MEDIMMUNE and/or its THIRD PARTY
MANUFACTURER on a case-by-case basis). 
Within ten (10) days of receipt, either PARTY shall provide the other
PARTY with a copy of any notice of inspection of any facility where any PRODUCT
is manufactured, adverse finding, regulatory letter or similar notification
such PARTY receives from any REGULATORY AUTHORITY relating to the manufacture
of the PRODUCTS. MEDIMMUNE shall be responsible for handling and responding to
any inquiry or request for inspection by any REGULATORY AUTHORITY relating to
the manufacture of the PRODUCTS, and shall keep ABBOTT duly informed with
respect any material communications with respect thereto.

 

7.5                               INSPECTION BY ABBOTT. MEDIMMUNE hereby grants to ABBOTT the
right to inspect any MEDIMMUNE manufacturing facilities at which the PRODUCTS
supplied under this AGREEMENT are manufactured. 
MEDIMMUNE also agrees to exercise COMMERICALLY REASONABLE EFFORTS to
have any THIRD PARTY MANUFACTURER of any PRODUCT to permit such right of
inspection to ABBOTT.  ABBOTT shall also
have the right to inspect the books and records and the facility, equipment and
quality systems related to the manufacture of PRODUCTS supplied pursuant to
this AGREEMENT, including but not limited to such inspections as ABBOTT deems
necessary or appropriate prior to any submission to any REGULATORY AUTHORITIES
in the TERRITORY for approval of such manufacturing facility in connection with
the registration of any PRODUCT.  
MEDIMMUNE hereby also grants ABBOTT the right to inspect any testing
facility or laboratory  which contributes
data included in any REGULATORY FILING filed by ABBOTT in connection with the
PRODUCT.  Except for inspections
requested by a REGULATORY AUTHORITY or required in connection with a REGULATORY
FILING, ABBOTT shall inspect any manufacturing facility at which any PRODUCT is
manufactured no more than once every CONTRACT YEAR [***]; provided,
however, that, MEDIMMUNE may require ABBOTT to defer such inspection if
such inspection could, in MEDIMMUNE’s reasonable determination, detrimentally
interfere with MEDIMMUNE or any THIRD PARTY MANUFACTURER’s manufacture of the
PRODUCTS and MEDIMMUNE may limit ABBOTT’s inspection to the extent reasonably
required to protect trade secrets. 
ABBOTT shall conduct any such inspection during normal business hours
after reasonable prior notice and subject to appropriate confidentiality
provisions. The books and records subject to inspection include, but are not
limited to, batch records, manufacturing procedures and guidelines, and all
quality assurance/quality control documentation relating to the PRODUCTS.

 

7.6                               ACCESS TO MANUFACTURING DATA. 
MEDIMMUNE shall be responsible for preparing and submitting to ABBOTT on
a timely basis any data or other information related to the manufacture of the
PRODUCT that is required to be included in any REGULATORY FILINGS in the MAJOR
MARKETS or otherwise requested by any REGULATORY AUTHORITY in the TERRITORY,
including without limitation, data relating to the manufacturing process for
the PRODUCT  and any quality control procedures
in effect at any facility used to manufacture the PRODUCT; provided, however,
that MEDIMMUNE may redact or otherwise limit the information provided to ABBOTT
to the extent reasonably required to protect trade secrets.  MEDIMMUNE shall

 

28

 

notify ABBOTT of any matter related to the manufacture of the PRODUCT
that could reasonably be expected to be reportable to the REGULATORY
AUTHORITIES in the TERRITORY and promptly furnish to ABBOTT complete copies of
any reports made to the FDA with respect to the manufacture of the
PRODUCT.  MEDIMMUNE shall also promptly
notify ABBOTT of any occurrence or information which arises out of the
manufacture of the PRODUCTS, which have, or, in MEDIMMUNE’s reasonable
judgment, could be expected to have adverse regulatory compliance and/or
reporting consequences or adverse impact within TERRITORY on the registration
or commercialization of the PRODUCTS, including, but not limited to, any
decision by MEDIMMUNE to change the location at which any of the PRODUCTS are
manufactured.

 

7.7                               CHANGES TO SPECIFICATIONS. 
MEDIMMUNE shall promptly advise ABBOTT of any proposed or required
changes to the SPECIFICATIONS; provided, however, that ABBOTT’s
consent (not to be unreasonably withheld) shall be required to make any
Discretionary Changes (as defined below) that will adversely affect a
REGULATORY FILING submitted by ABBOTT to the REGULATORY AUTHORITIES in the
TERRITORY.  Changes to the SPECIFICATIONS
that are required to comply with the requirements of applicable REGULATORY
AUTHORITIES in the MAJOR MARKETS shall be deemed “Required Changes.”  Other changes to the manufacturing process,
including those required in connection with the change in THIRD PARTY
MANUFACTURER (but not an initial selection of a THIRD PARTY MANUFACTURER) or
changes that are intended to promote quality control/quality assurance and/or
achieve greater efficiency or cost savings in the manufacturing process shall
be deemed “Discretionary Changes.”  For
the avoidance of doubt, a change from one formulation of a PRODUCT to another
is a Discretionary Change; provided, however, that
notwithstanding anything in this Section 7.7 to the contrary, (i)
ABBOTT is hereby deemed to have consented to the change from the lyophilized
formulation of SYNAGIS to the liquid formulation of SYNAGIS without the need to
undergo the consent/approval procedures set forth in this Section 7.7,
(ii) ABBOTT acknowledges that it has received the SPECIFICATIONS for the liquid
formulation of SYNAGIS (attached as Exhibit A-2) and waives its ability
to comment on such SPECIFICATIONS as permitted by this Section 7.7.  Notwithstanding anything in this AGREEMENT to
the contrary, ABBOTT hereby agrees to conduct any clinical studies required by
any REGULATORY AUTHORITIES in the MAJOR MARKETS to obtain REGULATORY APPROVAL
for the liquid formulation of SYNAGIS; provided,  however, that,
ABBOTT shall not be obligated to commence any such clinical study required
earlier than January 1, 2006; provided, further, that if
ABBOTT does not commence any such clinical study before January 1, 2006
and such study has otherwise been discussed and reviewed by the Manufacturing
Steering Committee, then MEDIMMUNE may, but is not obligated to, commence such
trial and its own cost before January 1, 2006.

 

(a)                                  MEDIMMUNE
shall, at its cost, use COMMERCIALLY REASONABLE EFFORTS to implement Required
Changes to the manufacturing process as soon as practicable, and ABBOTT shall,
at its cost, use COMMERCIALLY REASONABLE EFFORTS to promptly (i) make any
changes, filings or refilings of PRODUCT REGISTRATIONS, (ii) obtain approval
for the implementation of such Required Changes in the TERRITORY and (iii)
conduct any clinical studies required by the applicable REGULATORY AUTHORITIES
to implement such Required Changes.

 

29

 

(b)                                 All proposed
Discretionary Changes requested by MEDIMMUNE shall be submitted to ABBOTT for
review and within ten (10) days of such submission, ABBOTT shall either approve
such Discretionary Changes or request that the Manufacturing Steering Committee
meet to review and consider approval and all proposed Discretionary Changes
requested by ABBOTT shall be submitted to the Manufacturing Steering Committee
to review and consider approval; provided,  however, that (i) the
Manufacturing Steering Committee shall not have the authority to approve any
proposed Discretionary Change if its implementation will adversely impact any
pending application for REGULATORY APPROVAL in any country in the TERRITORY,
and (ii) any such approval of a Discretionary Change by the Manufacturing
Steering Committee may be delayed until the next calendar year in the event
that ABBOTT reasonably notifies the Manufacturing Steering Committee, in
writing, that the implementation of the Discretionary Change shall cause ABBOTT
to incur substantial unbudgeted costs to obtain REGULATORY APPROVAL for such
Discretionary Change.  For the purposes
of clause (ii) of the preceding sentence, a “substantial unbudgeted” cost shall
be deemed to be a cost which was not discussed and reviewed by the Manufacturing
Steering Committee prior to September 30 of the calendar year in which a
Discretionary Change is requested by MEDIMMUNE and which would have a material
adverse financial impact on ABBOTT’s overall budget related to the PRODUCTS for
the calendar year in which the Discretionary Change was requested.

 

If approved by the Manufacturing Steering Committee, MEDIMMUNE shall, at
its cost, use its COMMERCIALLY REASONABLE EFFORTS to implement all such
Discretionary Changes to the manufacturing process as soon as practicable, and
ABBOTT shall, at its cost, use COMMERCIALLY REASONABLE EFFORTS to promptly (i)
make any changes, filings or refilings of PRODUCT REGISTRATIONS, (ii) obtain
approval for the implementation of such Discretionary Changes in the TERRITORY,
(iii) conduct any clinical studies required by the applicable REGULATORY
AUTHORITIES to implement such Discretionary Changes and (iv) obtain the
approval of the applicable REGULATORY AUTHORITIES in the TERRITORY for
implementation of such Discretionary Changes (if necessary) as soon as
practicable.  MEDIMMUNE shall, in
writing, notify ABBOTT of any Discretionary Changes to the SPECIFICATION of any
PRODUCT which, if implemented, would require notification to REGULATORY
AUTHORITIES in the TERRITORY.  Upon receipt
of such notification, ABBOTT shall be entitled to provide recommendations to
MEDIMMUNE regarding the manner and timing of the adoption of such Discretionary
Changes.  MEDIMMUNE shall, to the extent
commercially reasonable under the circumstances, reasonably take into
consideration ABBOTT’s recommendations and shall cooperate with ABBOTT in
making such Discretionary Changes.  To
the extent such changes require a new or amended PRODUCT REGISTRATION,
MEDIMMUNE and ABBOTT shall cooperate and coordinate the adoption of such
changes to the SPECIFICATIONS so as to minimize any disruption of the
marketing, promotion
and sale of PRODUCT in any country within the TERRITORY.

 

(c)                                  MEDIMMUNE and ABBOTT shall define
appropriate change control procedures by and among MEDIMMUNE, ABBOTT and any
THIRD PARTY

 

30

 

MANUFACTURER in the quality/technical agreement described above, subject
to review and approval of the Manufacturing Steering Committee.

 

(d)                                 Any PRODUCT
that becomes unsalable following a change in PRODUCT REGISTRATION as a result
of a Discretionary Change to the SPECIFICATIONS initiated by MEDIMMUNE shall be
deemed to be a defective PRODUCT and shall entitle ABBOTT to the remedies
provided under Section 7.3 of this Agreement.  To the extent any PRODUCT becomes unsalable
following a change in PRODUCT REGISTRATION as a result of a Discretionary
Change to the SPECIFICATIONS initiated by ABBOTT, MEDIMMUNE shall be excused
from meeting its obligations to supply the affected PRODUCT(S).

 

7.8                               CHANGE IN MANUFACTURER.  As
of the EFFECTIVE DATE, SYNAGIS is manufactured by Boehringer Ingelheim in
Germany [***].  Subject to the conditions of
this Section 7.8, MEDIMMUNE may delegate the manufacture of any
PRODUCT to an alternate THIRD PARTY MANUFACTURER or an AFFILIATE of
MEDIMMUNE.  MEDIMMUNE shall provide
ABBOTT with prior written notice of any proposed change in the THIRD PARTY
MANUFACTURER of any PRODUCT hereunder at least eighteen (18) months prior to
such change and shall seek the written consent of ABBOTT, which consent shall
not be unreasonably withheld; provided,
however, in the event that it is not commercially reasonable
for MEDIMMUNE to provide eighteen (18) months notice under the circumstances,
the PARTIES shall work cooperatively to establish a mutually acceptable
timeline for effecting such change. 
Notwithstanding the foregoing, in the event that MEDIMMUNE is [***], the PARTIES
acknowledge and agree that MEDIMMUNE may engage another THIRD PARTY
MANUFACTURER for NUMAX (or manufacture NUMAX itself or through an AFFILIATE)
with written notice to ABBOTT as soon as reasonably practicable.  ABBOTT shall be deemed to have reasonably
withheld consent to a proposed change in the manufacturer of any PRODUCT if
such change will result in a material disruption of the supply of the PRODUCT
or have a material adverse impact on pending or existing REGULATORY FILINGS or
REGULATORY APPROVALS of the PRODUCTS, provided however that, ABBOTT may
withhold such consent for no longer than such reasonable period as required to
notify and obtain any consents to such change in manufacturer as may be
required by REGULATORY AUTHORITIES in the TERRITORY.  In the event that a change in manufacturer
would result in a material financial impact to ABBOTT unanticipated in the
ordinary course of business, MEDIMMUNE agrees to negotiate in good faith with
ABBOTT a reasonable allocation between the PARTIES for the incremental costs
resulting from such change in manufacturer including, but not limited to,
significant additional freight costs (to the extent materially different), but
excluding, without limitation, any expenses incurred by ABBOTT to amend
REGULATORY FILINGS made by ABBOTT in the TERRITORY related to such change.
MEDIMMUNE shall remain primarily liable to ABBOTT in connection with the
quality and supply of the PRODUCTS supplied hereunder and nothing in this Section 7.9
shall be construed to reduce or limit the obligations of MEDIMMUNE or the
rights of ABBOTT pursuant to the remaining terms of this AGREEMENT, including
but not limited to the obligation of MEDIMMUNE to permit the inspection of its
manufacturing facilities under Sections 7.4 and 7.5.

 

31

 

8.                                       OTHER RESPONSIBILITIES OF
ABBOTT

 

8.1                                 COMPLIANCE WITH LAWS.  In
distributing PRODUCT in the TERRITORY, ABBOTT will comply with all provisions
of the laws, rules and regulations applicable in the TERRITORY.  ABBOTT shall promptly notify MEDIMMUNE of any
changes in such provisions.

 

8.2                                 PRODUCT DIVERSION. 
ABBOTT agrees not to export PRODUCT outside the TERRITORY, as set forth
in greater detail in Section 2.2, without the express written
permission of MEDIMMUNE which may be withheld in MEDIMMUNE’s sole discretion.

 

8.3                                 PLANS AND MARKET REPORTS.  Within
thirty (30) days following the end of CALENDAR QUARTER during the TERM, ABBOTT
shall supply MEDIMMUNE each CALENDAR QUARTER with a market progress report
indicating the quantities of each PRODUCT in inventory and NET SALES of
PRODUCTS during each month of the prior CALENDAR QUARTER in each country of the
TERRITORY and latest best estimates of sales for each month of such CALENDAR
QUARTER (by country).  Within thirty (30)
days following the beginning of each CALENDAR YEAR during the TERM, ABBOTT
shall supply to MEDIMMUNE its commercialization plans for the MAJOR MARKETS and
its five-year long-range plan for distribution of PRODUCTS in the
TERRITORY.  Any commercialization plans
or five-year long-range plans submitted by ABBOTT pursuant to this Section 8.3
shall be non-binding, except to the extent reflecting FIRM ORDERS consistent
with Section 5.1.

 

8.4                                 NO JOINT VENTURE. 
Nothing contained in this AGREEMENT shall be construed to constitute
either PARTY as a partner or agent of the other PARTY and to create any other
form of legal association that would impose liability upon a PARTY for the for
the act or omission of the other PARTY or provide a PARTY with the right, power
or authority to create or impose any duty or obligation on the other PARTY.  It being intended that each PARTY shall
remain an independent contractor acting in its own name and for its own
account.

 

8.5                                 CONFIDENTIAL INFORMATION. 
During the TERM of this AGREEMENT, it is contemplated that a PARTY will
disclose to the other PARTY proprietary and confidential technology,
specifications, technical information and the like which are owned or
controlled by a PARTY (“CONFIDENTIAL INFORMATION”). Without limiting the
foregoing, the terms and conditions of this AGREEMENT shall be considered
CONFIDENTIAL INFORMATION.  The receiving
PARTY agrees to retain the disclosing PARTY’s CONFIDENTIAL INFORMATION in
confidence and not to disclose any such CONFIDENTIAL INFORMATION to a THIRD
PARTY without the prior written consent of the disclosing PARTY and to use the
disclosing PARTY’s CONFIDENTIAL INFORMATION only for the purposes of this
AGREEMENT. The obligations of confidentiality will not apply to CONFIDENTIAL
INFORMATION which:

 

(i)                                     was known to the receiving PARTY or generally
known to the public prior to its disclosure hereunder;

 

(ii)                                  subsequently becomes known to the public by
some means other than a breach of this AGREEMENT;

 

32

 

(iii)                               is subsequently disclosed to the receiving
PARTY by a third party having a lawful right to make such disclosure;

 

(iv)                              is required by law or bona fide legal process
to be disclosed provided that the receiving PARTY takes all reasonable steps to
restrict and maintain confidentiality of such disclosure and provides
reasonable prior notice to the disclosing PARTY; or

 

(v)                                 is approved for release by the PARTIES.

 

(b)                                 Upon termination or expiration of this
AGREEMENT, each PARTY shall return to the other PARTY all tangible forms of
CONFIDENTIAL INFORMATION furnished by the other PARTY, including all copies
thereof and all memoranda of oral disclosure, except that each PARTY may retain
one copy in its files to ensure compliance with any legal obligations.

 

(b)                                 This Section 8.5 shall survive
until the tenth anniversary of the termination or expiration of this AGREEMENT.

 

8.6                                 SALES FORECAST. 
ABBOTT agrees to provide MEDIMMUNE with ABBOTT’s annual U.S. Dollar
sales and UNIT volume forecast for PRODUCT to be sold in the TERRITORY (by
country, by month and for five (5) years or such period as ABBOTT uses for its
internal forecasting) for the sole purpose of assisting MEDIMMUNE in its
financial planning.

 

8.7                                 NO SUBLICENSE.  The
PARTIES agree that nothing in this AGREEMENT shall be deemed to indicate that
ABBOTT has received a sublicense to any intellectual property or know-how of
MEDIMMUNE related to the research, development or manufacturing of the
PRODUCTS.

 

9.                                       CO-PROMOTION OPTION

 

9.1                               CO-PROMOTION OPTIONS. 
MEDIMMUNE shall have three (3) options (each, a “CO-PROMOTION OPTION”),
each to co-promote NUMAX in one (1) country in the TERRITORY, excluding Japan,
with at least twelve (12) months prior written notice to ABBOTT.  If a CO-PROMOTION OPTION is exercised,
MEDIMMUNE shall have the right to provide up to [***] of the sales/promotion
effort for NUMAX in the selected country, to be reimbursed by ABBOTT at the FTE
RATE.  For purposes of this Section 9,
“co-promote” or “co-promotion” shall mean the marketing, promotion, and
advertisements of NUMAX by MEDIMMUNE or its AFFILIATES under (a) the relevant
REGULATORY APPROVAL held by ABBOTT or its AFFILIATES, and (b) the
TRADEMARKS.   “Co-promotion” shall not
mean the sale or distribution of NUMAX during the TERM of this AGREEMENT by
MEDIMMUNE or its AFFILIATES.

 

9.2                               POST-LAUNCH OPTIONS.  In
addition to the CO-PROMOTION OPTIONS set forth in Section 9.1,
MEDIMMUNE shall also have four (4) additional options (each, a “POST-LAUNCH
OPTION”), each to co-promote NUMAX in one (1) country in the TERRITORY, at any
time at least twelve (12) months (twenty-four (24) months in the case of Japan)
after first commercial sale of NUMAX in such country, with at least twelve (12)
months prior written notice to ABBOTT. 
If a POST-LAUNCH OPTION is

 

33

 

exercised, MEDIMMUNE shall
have the right to provide up to [***] of the sales/promotional effort for NUMAX
in the selected country, to be reimbursed by ABBOTT at the FTE RATE (such
countries may be in addition to the any countries selected upon exercise of the
CO-PROMOTION OPTION described in Section 9.1 so, for clarity,
MEDIMMUNE will have a total of seven (7) CO-PROMOTION OPTIONS and POST-LAUNCH
OPTIONS in the aggregate).

 

9.3                               MEDIMMUNE DISCRETION.  The
countries with respect to which a CO-PROMOTION OPTION or POST-LAUNCH OPTION will
be exercised by MEDIMMUNE shall be determined at the sole discretion of
MEDIMMUNE at the time of election; provided,  however, that, once
MEDIMMUNE has exercised its CO-PROMOTION or POST-LAUNCH OPTION in a country,
MEDIMMUNE shall not be entitled to substitute that country for another country
except as provided in the last sentence of this Section 9.3.  For the avoidance of doubt, MEDIMMUNE shall
not be able to select Japan as one of the CO-PROMOTION OPTION countries, but
shall be able to select Japan as one of the POST-LAUNCH OPTION countries.  In the event that it is determined after the
date of MEDIMMUNE’s notice but prior to the initiation of the co-promotion
activities by MEDIMMUNE in any country, that co-promotion of NUMAX in
accordance with the terms of the co-promotion agreement between the PARTIES is
inconsistent with local law or regulations in such country, MEDIMMUNE shall be
able to substitute another country for the exercise of its OPTION under this Section 9.  In the event it is determined after the
EFFECTIVE DATE that co-promotion activities by MEDIMMUNE in a majority of the
MAJOR MARKETS or a significant region of the TERRITORY (e.g., Europe) is
inconsistent with local law or regulations in such markets, the PARTIES agree
to meet in good faith to discuss alternative proposals that would address the
respective business objectives of the PARTIES.

 

9.4                               CO-PROMOTION AGREEMENT.  Upon
the exercise of one or more CO-PROMOTION OPTIONS or POST-LAUNCH OPTIONS, the
PARTIES agree (a) to enter into a co-promotion agreement containing customary
terms for co-promotion of a product of comparable market potential to NUMAX and
otherwise consistent with this Section 9 within sixty (60) days of
exercise of the applicable option, and (b) to establish a Joint Commercialization
Committee (“JCC”).  The PARTIES shall exert COMMERCIALLY
REASONABLE EFFORTS to first meet within forty-five (45) days after the
applicable co-promotion agreement is executed and regularly thereafter as
provided in the co-promotion agreement, to oversee and review the marketing
plan, agree upon a sales plan and allocation of the sales efforts between the
PARTIES.  Notwithstanding input from the
JCC, ABBOTT shall have the final decision in all aspects of the
commercialization of NUMAX in the TERRITORY, including but not limited to,
marketing, promotion, sale, distribution, pricing, sales force deployment and
allocation in the TERRITORY.  Except as
provided in this Section 9, neither ABBOTT nor MEDIMMUNE shall be
entitled to any compensation, remuneration or right of reimbursement of
expenses in connection with activities undertaken by MEDIMMUNE upon exercise of
a CO-PROMOTION OPTION or POST-LAUNCH OPTION or under the terms of any
co-promotion agreement entered into between the PARTIES.  MEDIMMUNE shall have the right to manage and
direct its sales force in any countries in which a CO-PROMOTION OPTION or
POST-LAUNCH OPTION has been exercised; provided, however, that
such management and direction must be in accordance with the marketing and
sales plans approved by ABBOTT and to the extent MEDIMMUNE’s sales activities
are inconsistent with such plans in any such countries and such activities are
not revised to be consistent with such plans following written

 

34

 

notice from ABBOTT, the
co-promotion agreement may provide for termination MEDIMMUNE’s co-promotion
rights in such country(ies).

 

9.5                               CO-PROMOTION PRINCIPLES.  The
amount of the sales/promotion effort to be provided by MEDIMMUNE in any country
in which a CO-PROMOTION OPTION or POST-LAUNCH OPTION has been exercised (i.e.,
up to [***] of the total sales/promotion effort contemplated by ABBOTT for the
sale of NUMAX in any such country) will be decided from time to time by
MEDIMMUNE consistent with the terms of the applicable co-promotion agreement.
For clarity, MEDIMMUNE’s co-promotion efforts under this Section 9
shall not be included for consideration as exertion of ABBOTT’s COMMERCIALLY
REASONABLE EFFORTS to distribute PRODUCTS in the countries in which a
CO-PROMOTION OPTION or POST-LAUNCH OPTION has been exercised.

 

9.6                               RIGHT TO SUBLICENSE. 
MEDIMMUNE has the right to sublicense the co-promotion rights upon
exercise of a CO-PROMOTION OPTION or a POST-LAUNCH OPTION to an AFFILIATE or
THIRD PARTY subject, in the case of a THIRD PARTY, to ABBOTT’s prior review and
consent, such consent not to be unreasonably withheld (but which consent may
take into account any adversarial relationship between ABBOTT and such THIRD
PARTY and the experience and marketing know-how of the THIRD PARTY sublicensee
proposed by MEDIMMUNE).

 

9.7                               USE OF PERSONNEL. MEDIMMUNE (or MEDIMMUNE’S sublicensee
pursuant to Section 9.6, as applicable) will use its best efforts
to ensure that all personnel assigned to co-promote NUMAX upon exercise of a
CO-PROMOTION OPTION or POST-LAUNCH OPTION will not be utilized by MEDIMMUNE (or
any such sublicensee) to market, promote or sell any product which competes
with NUMAX for a period of at least [***] following any termination of the
co-promotion arrangement for NUMAX.

 

10.                               TRADEMARKS, LOGOS AND
PATENTS.

 

10.1                        SYNAGIS TRADEMARKS.  As
of the EFFECTIVE DATE, the TRADEMARKS owned by ABBOTT for use in connection
with the marketing, promotion, sale and distribution of SYNAGIS are as set
forth on Exhibit 10.1.  MEDIMMUNE
agrees to transfer any TRADEMARKS for SYNAGIS in the TERRITORY to ABBOTT as
soon as reasonably practical after the EFFECTIVE DATE.  During the TERM, the TRADEMARKS for SYNAGIS
in the TERRITORY shall be owned by ABBOTT and ABBOTT shall have sole
responsibility for filing, prosecuting, registering and maintaining all SYNAGIS
TRADEMARKS in the TERRITORY.  In the
event this AGREEMENT is terminated or expires with respect to SYNAGIS in one or
more countries of the TERRITORY, ABBOTT agrees to promptly transfer ownership
of the TRADEMARKS for SYNAGIS for such countries to MEDIMMUNE, all at no cost
or expense to MEDIMMUNE.

 

10.2                        NUMAX TRADEMARKS. 
MEDIMMUNE shall be solely responsible for the selection of any proposed
trademarks for use in connection with NUMAX in the TERRITORY and the trademarks
proposed by MEDIMMUNE shall become the TRADEMARKS for NUMAX in the TERRITORY; provided,
however, that ABBOTT shall have the right to provide recommendations to
MEDIMMUNE for TRADEMARKS for NUMAX and MEDIMMUNE agrees to consider in good
faith all such recommendations; and, provided, further, that
MEDIMMUNE will select proposed trademarks for NUMAX with

 

35

 

the goal of selecting a
consistent global trademark for NUMAX. 
The TRADEMARKS for NUMAX in the TERRITORY shall be owned by MEDIMMUNE
and MEDIMMUNE shall have sole responsibility for filing, prosecuting,
registering and maintaining all NUMAX TRADEMARKS in the TERRITORY.  ABBOTT shall cooperate with and assist
MEDIMMUNE in obtaining and enforcing such TRADEMARKS in the TERRITORY.  Such cooperation will include the execution
of any and all lawful papers that may be deemed necessary or desirable by
MEDIMMUNE for the filing and prosecution of the TRADEMARKS and providing such
evidence as may be reasonably requested by MEDIMMUNE to support use of the
TRADEMARKS in the TERRITORY.  During the TERM and except as otherwise
provided in this AGREEMENT, MEDIMMUNE shall grant to ABBOTT a royalty-free,
exclusive license to use the TRADEMARK with respect to NUMAX in all countries
of the TERRITORY as to which ABBOTT has rights, which shall be non-cancelable
(except as provided in the last sentence of this Section 10.2), and
MEDIMMUNE shall perform all acts and sign and execute any and all papers
reasonably required to effect such licensing. 
Unless ABBOTT, in writing, notifies MEDIMMUNE to the contrary, MEDIMMUNE
shall pursue registration of the TRADEMARKS for NUMAX in all countries in the TERRITORY
in which ABBOTT has obtained or is in the process of actively seeking
REGULATORY APPROVAL.  For clarity, if
ABBOTT’s rights to NUMAX are terminated or expire in one or more countries in
accordance with this AGREEMENT, the license to use such TRADEMARKS for NUMAX in
such countries shall also terminate and thereafter MEDIMMUNE shall not be
restricted in any manner from using such TRADEMARKS in such countries.

 

10.3                        USE OF TRADEMARKS. 
During the TERM of this AGREEMENT, ABBOTT and its AFFILIATES shall
distribute and sell PRODUCTS only bearing the TRADEMARKS.  ABBOTT agrees to use the TRADEMARK only with
respect to PRODUCT purchased from MEDIMMUNE and only in those countries of the
TERRITORY in which ABBOTT retains the right to distribute such PRODUCT.

 

10.4                        COSTS ASSOCIATED WITH
TRADEMARKS.  At its cost and expense, ABBOTT undertakes to
comply with all legal requirements pertaining to the SYNAGIS TRADEMARKS and to
maintain any SYNAGIS TRADEMARKS in force at all times during the TERM in the
countries of the TERRITORY in which ABBOTT retains the right to distribute
SYNAGIS.  Any reasonable costs and
expenses incurred by MEDIMMUNE in obtaining or defending a TRADEMARK for a
PRODUCT anywhere in the TERRRITORY for ABBOTT’s benefit or related to the
transfer of title to ABBOTT shall be reimbursed in full by ABBOTT.

 

10.5                        INFRINGEMENT OF TRADEMARKS.  If ABBOTT becomes aware of any infringement of the TRADEMARKS for
SYNAGIS within the TERRITORY, ABBOTT shall, at its expense, take such steps as
ABBOTT may reasonably determine for the protection of its rights in such
TRADEMARKS. The commencement, strategies, termination and settlement of any
action relating to the validity and/or infringement of such TRADEMARK for
SYNAGIS shall be finally decided by ABBOTT. 
If MEDIMMUNE becomes aware of any infringement of the TRADEMARKS for
NUMAX within the TERRITORY, MEDIMMUNE shall, at its expense, take such steps as
MEDIMMUNE may reasonably determine for the protection of its rights in such
TRADEMARKS. The commencement, strategies, termination and settlement of any action
relating to the validity and/or infringement of such TRADEMARK for NUMAX shall
be finally decided by MEDIMMUNE.

 

36

 

10.6                        REPRESENTATIONS WITH RESPECT
TO THIRD PARTY PATENTS.  MEDIMMUNE
acknowledges and agrees that it shall be solely responsible for:  (a) obtaining all appropriate licenses necessary
to make, have made, use, sell or offer for sale the PRODUCTS during the TERM; (b) paying consideration, including
royalties, to THIRD PARTIES for any intellectual property covering the
PRODUCTS; and (c) satisfying any other license obligations of MEDIMMUNE to
THIRD PARTIES to make, have made, use, import, offer for sale, or sell
PRODUCTS.

 

10.7                        NUMAX PATENT MAINTENANCE. The PARTIES agree that the PATENTS set forth
in Exhibit 10.8 relate to NUMAX and are owned by or licensed to
MEDIMMUNE as of the EFFECTIVE DATE. 
MEDIMMUNE shall have responsibility, at its sole cost and expense, for
maintaining each of the PATENTS in all countries in the TERRITORY in which such
PATENTS exist in which NUMAX is manufactured, marketed, and sold by ABBOTT. For
purposes of the foregoing, such maintenance shall include prosecution before
the relevant patent offices (including oppositions and interferences), and payment of applicable maintenance
fees.  MEDIMMUNE shall use its
COMMERCIALLY REASONABLE EFFORTS to obtain extensions of exclusivity beyond the
full term expiry date of any PATENTS in the TERRITORY as they relate to
PRODUCTS, such as a Supplementary Protection Certificate in the European Patent
Office. If MEDIMMUNE elects to abandon
its maintenance of any Patent in
any country, it shall give prompt written notice to ABBOTT, and ABBOTT may, at its cost and expense,
assume the maintenance of said PATENT. 
The assumption by ABBOTT of the obligation for maintaining the PATENT
shall not, in any way, alter or affect MEDIMMUNE’s ownership interest in the
PATENTS or MEDIMMUNE’s obligation to indemnify ABBOTT pursuant to Section 11.2.

 

10.8                        PATENT ENFORCEMENT.  In
the event that ABBOTT notifies MEDIMMUNE that ABBOTT believes that a THIRD
PARTY is selling a monoclonal antibody against RSV in the TERRITORY which
infringes a PATENT owned by or licensed to MEDIMMUNE and MEDIMMUNE has the
right to bring suit under such PATENT then:

 

(a)                                  MEDIMMUNE shall have the first right to bring
an infringement action against such THIRD PARTY at its cost and expense and
MEDIMMUNE shall retain all amounts recovered in such action; or

 

(b)                                 if MEDIMMUNE does not initiate such action
within one hundred eighty (180) days of written notice of such infringement
from ABBOTT, at the request of ABBOTT, to the extent that MEDIMMUNE has the
right to do so, MEDIMMUNE shall initiate an infringement action against such
THIRD PARTY at the cost and expense of ABBOTT and ABBOTT shall retain all
amounts recovered in such action.

 

In any infringement suit
instituted by MEDIMMUNE to enforce the PATENT rights pursuant to this
AGREEMENT, ABBOTT shall cooperate fully with MEDIMMUNE.  MEDIMMUNE shall notify ABBOTT of any
settlement of any action or proceeding.

 

11.                               INDEMNITY

 

11.1                        INDEMNIFICATION BY ABBOTT. ABBOTT shall, at its own cost and expense,
defend, indemnify and hold harmless MEDIMMUNE and its AFFILIATES and their

 

37

 

licensors related to
PRODUCTS and their respective employees, agents, officers, shareholders and
directors and each of them (a “MEDIMMUNE
INDEMNIFIED PARTY”) from and against any and all claims, causes of
action, losses, damages and costs (including reasonable attorney’s fees) of any
nature made or asserted against a MEDIMMUNE INDEMNIFIED PARTY or lawsuits or
other proceedings filed or otherwise instituted against a MEDIMMUNE INDEMNIFIED
PARTY, as described below (hereinafter individually and collectively a “MEDIMMUNE LOSS”):

 

(a)                                  With respect to SYNAGIS, to the extent that
such MEDIMMUNE LOSS results or arises from clinical trials, testing, sale or
use of SYNAGIS which is used or sold by or on behalf of ABBOTT and

 

(b)                                 With respect to NUMAX:

 

(i)                                     [***] of any MEDIMMUNE LOSS related to a
THIRD PARTY claim of product liability related to [***], and

 

(ii)                                  to the extent that such MEDIMMUNE LOSS
results or arises from:  (A) [***] or (B)
a breach of a statutory duty, representation or warranty or a failure to comply
with any covenant or other obligation of ABBOTT set forth in this AGREEMENT;
except, in each case, to the extent such MEDIMMUNE LOSS results or arises from
any [***] relating to NUMAX within the TERRITORY conducted by MEDIMMUNE, its
AFFILIATES or licensees under this AGREEMENT;

 

but in all cases described
in (a) and (b) above, ABBOTT shall not have any obligation to indemnify
MEDIMMUNE for the portion of any MEDIMMUNE LOSS that arises or results from the
negligence or willful misconduct of such MEDIMMUNE INDEMNIFIED PARTY.

 

11.2                        INDEMNIFICATION BY MEDIMMUNE. 
MEDIMMUNE shall, at its own cost and expense, defend, indemnify and hold
harmless ABBOTT and its AFFILIATES and their respective employees, agents,
officers, shareholders and directors and each of them (an “ABBOTT INDEMNIFIED PARTY”) from and
against any and all THIRD PARTY claims, causes of action, losses, damages,
penalties, settlements and costs (including reasonable attorney’s fees) of any
nature made or asserted against a ABBOTT INDEMNIFIED PARTY or lawsuits or other
proceedings filed or otherwise instituted against a ABBOTT INDEMNIFIED PARTY,
as described below (hereinafter individually or collectively an “ABBOTT LOSS”) :

 

(a)                                  With respect to SYNAGIS, to the extent that
such ABBOTT LOSS results or arises from the negligence or willful misconduct of
MEDIMMUNE or the infringement of a patent of a THIRD PARTY as a result of
ABBOTT’s use or sale of SYNAGIS in the TERRITORY and

 

38

 

(b)                                 With respect to NUMAX:

 

(i)                                     [***] of any ABBOTT LOSS related to a THIRD
PARTY claim of product liability related to [***],  and

 

(ii)                                  to the extent that such ABBOTT LOSS results
or arises from: (A) the negligence or willful misconduct of MEDIMMUNE, (B) a
breach of a statutory duty, representation or warranty or a failure to comply
with any covenant or other obligation of MEDIMMUNE set forth in this AGREEMENT,
(C) [***], or (D) the infringement of a patent of a THIRD PARTY as a result of
ABBOTT’s use or sale of NUMAX in the TERRITORY; except, in each case, to the
extent such ABBOTT LOSS results or arises from any [***] relating to NUMAX
within the TERRITORY conducted by ABBOTT, its AFFILIATES or licensees under
this AGREEMENT;

 

but in all cases described
in (a) and (b) above, MEDIMMUNE shall not have any obligation to indemnify
ABBOTT for the portion of any ABBOTT LOSS that arises or results from the
negligence or willful misconduct of such ABBOTT INDEMNIFIED PARTY.

 

11.3                        CONDITIONS TO
INDEMNIFICATION.  A person or entity that intends to claim
indemnification under this Section 11 (the “INDEMNITEE”) shall promptly notify the
other party (the “INDEMNITOR”) of
any loss, claim, damage, liability or action in respect of which the INDEMNITEE
intends to claim such indemnification, and the INDEMNITOR shall assume the
defense thereof with counsel mutually satisfactory to the INDEMNITEE whether or
not such claim is rightfully brought; provided, however, that an INDEMNITEE
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the INDEMNITOR if INDEMNITOR does not assume the defense, or if
representation of such INDEMNITEE by the counsel retained by the INDEMNITOR
would be inappropriate due to actual or potential differing interests between
such INDEMNITEE and any other person represented by such counsel in such
proceedings. The indemnity agreement in this Section 11 shall not
apply to amounts paid in settlement of any loss, claim, damage. liability or
action if such settlement is effected without the consent of the INDEMNITOR,
which consent shall not be withheld or delayed unreasonably. The failure to
deliver notice to the INDEMNITOR within a reasonable time after the
commencement of any such action, only if prejudicial to its ability to defend
such action, shall relieve such INDEMNITOR of any liability to the INDEMNITEE
under this Section 11, but the omission so to deliver notice to the
INDEMNITOR will not relieve it of any liability that it may have to any
INDEMNITEE otherwise than under this Section 11. The INDEMNITEE under
this Section 11, its employees and agents, shall cooperate fully
with the INDEMNITOR and its legal representatives in the investigations of any
action, claim or liability covered by this indemnification.

 

12.                               ADVERSE DRUG REPORTING

 

12.1                        PHARMACOVIGILANCE. 
MEDIMMUNE shall lead the global pharmacovigilance with respect to the
PRODUCTS, shall maintain the primary global safety database for all
PRODUCTS.  With respect to SYNAGIS, the
PARTIES agree to work cooperatively to

 

39

 

establish the primary global
safety database for SYNAGIS and transition any related information held by
ABBOTT as of the EFFECTIVE DATE to MEDIMMUNE. 
ABBOTT hereby agrees to transmit to MEDIMMUNE any safety information
with respect to the PRODUCTS that is obtained by ABBOTT for inclusion in the
global safety database.  MEDIMMUNE hereby
agrees to provide ABBOTT with access to the global safety database such that
ABBOTT has all information reasonably necessary for ABBOTT to make regulatory
filings and take such other actions in accordance with this AGREEMENT.  Each PARTY shall be solely responsible for
expenses incurred by such PARTY relating to the pharmacovigilance activities.

 

No later than ninety (90)
days following the EFFECTIVE DATE, the Parties shall enter into an agreement to
exchange adverse safety data with respect to each PRODUCT, including but not
limited to, post-marketing spontaneous reports received by the PARTY or its AFFILIATES
in order to monitor the safety of each PRODUCT and to meet the reporting
requirements of any applicable REGULATORY AUTHORITY, which agreement shall
contain the terms necessary to effectuate the agreements of the PARTIES as set
forth in this Section 12.1.

 

12.2                        RECALL.  Each
PARTY shall promptly notify the other PARTY in writing of any facts relating to
the advisability of or requiring the quarantine, recall, stop-sale action,
destruction or withholding from the market of the PRODUCT anywhere in the world
(collectively, a “RECALL”). If at
any time (a) any governmental or REGULATORY AUTHORITY in the TERRITORY issues a
request, directive or order for a RECALL; (b) a court of competent jurisdiction
orders a RECALL in the TERRITORY; or (c) ABBOTT determines, following
consultation with MEDIMMUNE (except in emergency situations in which there is
insufficient time for such consultation), that a RECALL in the TERRITORY is
necessary or advisable, ABBOTT shall take all appropriate corrective actions to
effect the RECALL, including but not limited to, notifying the relevant
REGULATORY AUTHORITIES in the TERRITORY, as appropriate, and MEDIMMUNE shall
provide ABBOTT with such cooperation in connection with the RECALL as ABBOTT
may reasonably request.   All costs and
expenses of any RECALL of SYNAGIS in the TERRITORY shall be borne by
ABBOTT.  The costs and expenses of any
RECALL of NUMAX in the TERRITORY shall be borne by either ABBOTT, MEDIMMUNE, or
both, in proportion as such RECALL is required as a result of MEDIMMUNE’s or
ABBOTT’s breach of their obligations hereunder and if no such breach or
responsibility can be so allocated, then the PARTIES shall share the cost of
such RECALL equally.

 

13.                               REPRESENTATIONS AND
WARRANTIES

 

13.1                        FULL RIGHT AND AUTHORITY. Each PARTY warrants and represents that it
has the full right and authority to enter into this AGREEMENT and that it is
not aware of any impediment which would inhibit its ability to perform the
terms and conditions imposed on it.

 

13.2                        LIMITED WARRANTIES. 
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR VALIDITY OF ANY PATENTS ISSUED OR PENDING.

 

40

 

13.3                        COMPLIANCE WITH LAWS.  To
MEDIMMUNE’s knowledge, the development of NUMAX has not, as of the EFFECTIVE
DATE, been conducted in violation of any applicable law, except for any
violations that have not had or could not reasonably be expected to have,
whether singly or in the aggregate, a material adverse effect.  To MEDIMMUNE’s knowledge, all clinical trials
relating to NUMAX have been conducted in a manner that (a) follows, in all
material respects, protocols, procedures and controls generally used by
qualified experts in clinical studies, and (b) is consistent in all material
respects with all applicable laws, including the European Union Directive on
Data Protection and U.S. equivalents thereof. 
To MEDIMMUNE’s knowledge, ABBOTT has been provided access to all
material data pertaining to the clinical trials involving NUMAX.

 

13.4                        COMPLIANCE BY SUBCONTRACTORS AND
AFFILIATES.  The performance of any obligation under this AGREEMENT
by a subcontractor, including but not limited to, any THIRD PARTY MANUFACTURER,
or AFFILIATE, shall not exculpate the delegating PARTY from its primarily
obligation to the other PARTY under this AGREEMENT.

 

14.                               TERM AND TERMINATION

 

14.1                        TERM.  This
AGREEMENT is effective as of the date first above written and, unless sooner
terminated as provided herein, shall continue until [***] (the “TERM”).

 

14.2                        AGREEMENT TERMINATION.  This
AGREEMENT may be terminated by either PARTY if:

 

(a)                                  the other PARTY fails to observe, perform or
otherwise breaches any of its covenants, agreements or obligations under this
AGREEMENT in any material respect and such failure continues for a period of
thirty (30) days after receipt by the other Party of notice from the electing
PARTY specifying such failure. Following such period, the electing PARTY has
ninety (90) days to give notice to the other Party of its election to terminate
this AGREEMENT; or

 

(b)                                 the other PARTY files or institutes
bankruptcy, reorganization, liquidation, receivership or similar proceedings
under any debt relief laws or fails for more than sixty (60) days to take steps
to oppose the initiation of such actions against it.

 

14.3                        PRODUCT/COUNTRY TERMINATION.

 

(a)                                  If a REVERSION EVENT occurs, then effective
immediately upon the occurrence of the REVERSION EVENT, all of ABBOTT’s rights
under this AGREEMENT to market, promote, sell and distribute NUMAX shall
immediately terminate in all countries of the TERRITORY other than countries in
which NUMAX has received REGULATORY APPROVAL and in which ABBOTT is actively
marketing, promoting, selling and distributing NUMAX.

 

(b)                                 In addition to any remedies that may be
available to ABBOTT in law or equity or as otherwise provided elsewhere in this
AGREEMENT, if MEDIMMUNE materially breaches this AGREEMENT, such breach relates
specifically to one or

 

41

 

more countries (and does not
relate to any payment obligations of MEDIMMUNE under this AGREEMENT) and such
breach is not cured within thirty (30) days of receipt of written notice from
ABBOTT; then ABBOTT may, with written notice to MEDIMMUNE, terminate all of
ABBOTT’s rights under this AGREEMENT to market, promote, sell and distribute
all PRODUCTS in any or all such countries.

 

(c)                                  In addition to any remedies that may be
available to MEDIMMUNE in law or equity or as otherwise provided elsewhere in
this AGREEMENT, MEDIMMUNE may, with written notice to ABBOTT, exercise any of
the following rights in the corresponding circumstances described:

 

(i)                                     If ABBOTT either: (A) does not use its
COMMERCIALLY REASONABLE EFFORTS to market, promote, sell and/or distribute at
least one PRODUCT in any country of the TERRITORY (and such failure is not due
to a material breach of MEDIMMUNE’s obligations under this AGREEMENT) or notifies
MEDIMMUNE that ABBOTT does not intend to do so; or (B) materially breaches this
AGREEMENT, such breach relates specifically to one or more countries (and does
not relate to any payment obligations of ABBOTT under this AGREEMENT) and such
breach is not cured within thirty (30) days of receipt of written notice from
MEDIMMUNE; then in any such case MEDIMMUNE may terminate ABBOTT’s rights under
this AGREEMENT to market, promote, sell and distribute all PRODUCTS in the
country(ies) with respect to which such uncured breach has occurred; provided,
however, that any such termination under Section 14.3(c)(i)(A)
shall be delayed as provided in Section 14.3(d) if the
circumstances described therein exist;

 

(ii)                                  If NUMAX is commercially viable in one or
more countries of the TERRITORY (consistent with Section 2.1(b))
and ABBOTT does not use its COMMERCIALLY REASONABLE EFFORTS to market, promote,
sell and/or distribute NUMAX in such countries as set forth in Section 2.1(b),
then MEDIMMUNE may terminate ABBOTT’s rights under this AGREEMENT to market,
promote, sell and distribute NUMAX in any country(ies) in which ABBOTT has
failed to use COMMERCIALLY REASONABLE EFFORTS to market, promote, sell and/or
distribute NUMAX; or

 

(iii)                               If ABBOTT does not use its COMMERCIALLY
REASONABLE EFFORTS to obtain REGULATORY APPROVAL for NUMAX in one or more of
the countries of the MAJOR MARKETS as set forth in Section 6.1 and, provided that such failure is not
significantly attributable to MEDIMMUNE’S failure or delay in providing support
and documentation reasonably requested by ABBOTT for the purpose of making the
REGULATORY FILINGS in the TERRITORY, then MEDIMMUNE may terminate ABBOTT’s rights under this AGREEMENT to
market, promote, sell and distribute NUMAX in any country(ies) in which ABBOTT
has failed to use COMMERCIALLY REASONABLE EFFORTS to obtain REGULATORY APPROVAL
for NUMAX.

 

42

 

(c)                                  If
ABBOTT’s rights under this AGREEMENT are terminated in one or more countries in
accordance with this Section 14.3, then immediately upon
effectiveness of such termination, such countries shall thereafter be excluded
from the definitions of TERRITORY and, if applicable, MAJOR MARKETS, for the
remainder of the TERM.  With respect to a PRODUCT and a country(ies)
as to which ABBOTT’s rights under AGREEMENT are terminated, ABBOTT hereby
grants to MEDIMMUNE a non-cancelable, fully paid, royalty-free license to use
any and all technical, clinical and regulatory information, filings and
licenses of ABBOTT with respect to such PRODUCT in such country and ABBOTT
shall effect prompt transfer thereof to MEDIMMUNE and ABBOTT shall promptly
assign any and all TRADEMARKS for PRODUCTS owned by ABBOTT with respect to any
such PRODUCTS in any such countries to MEDIMMUNE, all at ABBOTT’s cost.  Termination of ABBOTT’s rights to one or more
PRODUCTS in one or more countries under this Section 14.3 shall not
affect ABBOTT’s rights to other PRODUCTS and/or other countries, as applicable.

 

(d)                                 With
respect to any country as to which MEDIMMUNE exercises its rights set forth in Section 14.3(c)(i)(A),
in the event that ABBOTT is marketing, promoting, selling and distributing
NUMAX (but not SYNAGIS) in any such country and NUMAX is removed from the
market in such country due to withdrawal of REGULATORY APPROVAL by a REGULATORY
AUTHORITY in such country, then effectiveness of MEDIMMUNE’s termination under Section 14.3(c)(i)(A),
shall be delayed to the extent: (i) ABBOTT provides written notice to MEDIMMUNE
of its intent to recommence the marketing, promotion, sale and distribution of
SYNAGIS in the TERRITORY within [***] of removal of NUMAX from the market and
(ii) subject to MEDIMMUNE’s ability to supply SYNAGIS, ABBOTT recommences the
marketing, promotion, sale and distribution of SYNAGIS in the TERRITORY within
[***] after the removal of NUMAX from the market.  If SYNAGIS has previously been discontinued
in any such country, and ABBOTT provides written notice to MEDIMMUNE as
provided in the previous sentence then, consistent with Section 3.5,
MEDIMMUNE may, but shall not be obligated to, supply SYNAGIS in any such
country.  If, however, MEDIMMUNE notifies
ABBOTT that SYNAGIS will not be supplied in any such country, then
effectiveness of MEDIMMUNE’s termination under Section 14.3(c)(i)(A)
shall be further delayed until [***] after MEDIMMUNE makes SYNAGIS available to
ABBOTT if ABBOTT has not recommenced the marketing, promotion, sale and
distribution of SYNAGIS until that time.

 

14.4                        Upon the termination of this AGREEMENT for
any reason, ABBOTT shall have the right to sell all PRODUCT in inventory or
which ABBOTT receives pursuant to FIRM ORDERS placed by ABBOTT prior to such
termination; provided, however, that ABBOTT agrees not to
discount the remaining PRODUCT in a manner inconsistent with its practices
prior to termination. All such sales of PRODUCT shall be subject to the terms
of this AGREEMENT, as in effect immediately prior to termination. If this
AGREEMENT is terminated by MEDIMMUNE for any breach by ABBOTT, then MEDIMMUNE or
a THIRD PARTY designated by MEDIMMUNE, may buy back any PRODUCT that remain in
the possession of ABBOTT and are in good condition with a reasonable remaining
shelf life at the price at which such PRODUCT was originally paid

 

43

 

by ABBOTT for such PRODUCT.
Notwithstanding anything in the foregoing, in the event that upon termination
of this AGREEMENT by MEDIMMUNE, MEDIMMUNE appoints a THIRD PARTY to market,
promote, sell and distribute in the TERRITORY, ABBOTT shall have the right to
cancel any FIRM ORDERS for the PRODUCTS that are undelivered by MEDIMMUNE.  Upon termination of this AGREEMENT, ABBOTT
shall discontinue use of the TRADEMARKS, except in connection with any sale of
PRODUCTS as provided in this Section 14.4, and all such rights to
TRADEMARKS shall be transferred to MEDIMMUNE in accordance with Section 10.

 

14.5                        The termination of this AGREEMENT shall not
affect any outstanding obligations of ABBOTT or MEDIMMUNE hereunder, including
but not limited to, any payments owed under the provisions of this AGREEMENT
for PRODUCTS delivered on or prior to the termination of this AGREEMENT. Any
such amount owed to a party shall be paid within thirty (30) days of the
termination of this AGREEMENT. The provisions Sections 1, 2.1(e),
3.2(i), 3.2(l), 8.4, 8.5, 10.1, 11, 14,
15 and the last sentence of Section 10.2 shall survive the
termination of this AGREEMENT for the longest period permitted by applicable
law or as otherwise set forth elsewhere in this AGREEMENT.

 

14.6                        Upon termination of this AGREEMENT and at the
request of MEDIMMUNE, to the extent permitted under local law and regulation of
the country in the TERRITORY, ABBOTT shall take all necessary or appropriate
actions, to transfer the REGULATORY APPROVALS and REGISTRATION FILINGS owned by
ABBOTT with respect to the relevant PRODUCT in such country to MEDIMMUNE or its
designee.   MEDIMMUNE shall reimburse
ABBOTT for all costs associated with such transfers of any REGULATORY APPROVALS
to MEDIMMUNE or its designee.   To the
extent permitted under local law and regulation in the TERRITORY, MEDIMMUNE
and/or its designee shall have the right to reference all REGULATORY APPROVALS
and REGISTRATION FILINGS (whether transferred or not) in such country following
termination of this AGREEMENT.

 

15.                               MISCELLANEOUS PROVISIONS

 

15.1                        GOVERNING LAW.  This
AGREEMENT shall be governed by and construed in accordance with the laws of
State of Maryland without giving effect to its conflict of law rules and
regulations. The United Nations Convention on the International Sale of Goods
shall not apply to this AGREEMENT, nor to any sale of PRODUCT made pursuant to
this AGREEMENT.

 

15.2                        ENTIRE AGREEMENT.  This
AGREEMENT sets forth the entire agreement and understanding between the PARTIES
as to the subject matter thereof and supersedes all prior agreements in this
respect, but does not affect the Mutual Confidentiality Agreement, effective as
of May 4, 2004, between the PARTIES or the Co-Promotion Agreement, dated as of November 26,
1997, by and between MEDIMMUNE and Abbott Laboratories, Inc., an AFFILIATE of
ABBOTT, as amended. There shall be no amendments or modifications to this
AGREEMENT, except by a written document which is signed by both PARTIES.

 

15.4                        HEADINGS.  The
headings in this AGREEMENT have been inserted for the convenience of reference
only and are not intended to limit or expand on the meaning of the language
contained in the particular article or section.

 

44

 

15.5                        NO WAIVER.  Any
delay in enforcing a PARTY’s rights under this AGREEMENT or any waiver as to a
particular default or other matter shall not constitute a waiver of a party’s
right to the future enforcement of its rights under this AGREEMENT, excepting
only as to an expressed written and signed waiver as to a particular matter for
a particular period of time.

 

15.6                        SEVERABILITY.  In
the event any provision of this AGREEMENT should be held invalid, illegal or
unenforceable, the remaining provisions shall not be affected or impaired and
the parties will use all reasonable efforts to replace the applicable provision
within a valid, legal and enforceable provision which insofar as practical
implements the purposes hereof.

 

15.7                        PUBLICITY.  Each PARTY
shall have the right to disclose, in writing or orally, the transactions
contemplated by this AGREEMENT and the relationship of the PARTIES hereunder
with the prior written consent of the other PARTY.  All news releases must be agreed upon in
advance by both PARTIES and submitted by the disclosing PARTY for review
sufficiently in advance of the scheduled release, but in no event fewer than
ten (10) days prior to the scheduled release, to allow the other PARTY a
reasonable opportunity to review and comment upon the proposed text.  Releases used to support financial disclosure
by either PARTY with respect to any PRODUCT will be submitted for review and
approval by the disclosing PARTY as set forth above if the financial
information also discloses financial information specific to the other PARTY
(e.g., the non-disclosing PARTY’s sales revenues, projections, market share,
estimates or any other financial data with respect to the PRODUCT obtained by
the disclosing PARTY from the non-disclosing PARTY pursuant to the terms of
this AGREEMENT).  Notwithstanding the
foregoing, each PARTY shall have the right to disclose information about the
transactions contemplated by this AGREEMENT without the other PARTY’s consent
if such disclosure is legally required, compelled by court order, required in
regulatory filings or in filings or announcements pursuant to stock exchange
rules or requirements.  In the event that
a disclosure is required under such circumstances, the disclosing PARTY agrees
to provide the other PARTY with a draft of any proposed disclosure ten (10)
days prior to such disclosure for review and comment (or, if such a period is
not available to comply with the applicable requirement, as much advance notice
as is practicable under the circumstances), the reasons that such disclosure is
necessary, and the time and place that the disclosure will be made.  Notwithstanding the foregoing, nothing in
this AGREEMENT shall be construed as to require MEDIMMUNE to submit to ABBOTT
any disclosure related to development, sale and marketing of the PRODUCTS
outside of the TERRITORY.  If either
PARTY has not responded to the other PARTY within the applicable period set
forth in this Section 15.7, such PARTY shall be deemed to have
consented to the release of such information.

 

15.7                        ALTERNATE DISPUTE RESOLUTION  If a dispute or claim arising out of or in connection with this
AGREEMENT develops between the PARTIES, the respective appropriate officers of
the PARTIES shall negotiate in good faith in an effort to resolve the dispute
for a period of thirty (30) days; provided, however, nothing in this Section 15.8
shall prevent either PARTY from seeking equitable relief. The PARTIES may, but
are not obligated to, agree to use the alternate dispute resolution procedure
set forth in Exhibit C and may file a lawsuit in court to seek redress
with respect to any claimed breach or damage.

 

45

 

15.8                        FORCE MAJEURE. 
Neither PARTY shall be liable to the other for any default hereunder,
which is not a payment default, which is due to cause beyond the control of the
PARTY in default, including but not limited to the actions or inactions of any
REGULATORY AUTHORITY; breakdown of plant or machinery or shortages of labor,
fuel, transportation of materials, fires, floods, earthquakes, war, acts of
terrorism, riots or insurrections, unless such event is directly or indirectly
caused due to the negligence or intentional action or inaction of the
defaulting PARTY. If either PARTY shall seek to rely on Force Majeure, it shall
give written notice to the other indicating the details of the event which it
claims has put due performance of its obligations beyond its control. In
addition, the affected PARTY shall exert all reasonable efforts to eliminate or
cure any Force Majeure event and to resume performance with all possible
speed.  In the event that a default as a
result of Force Majeure cannot be resolved within six (6) months, the PARTIES
shall either resolve the matter by mutual agreement or terminate this
AGREEMENT.

 

15.9                        SUCCESSORS.  The
rights and obligations included in this AGREEMENT shall be binding upon the
parties hereto and their successors and assigns.

 

15.10                 ASSIGNMENT.  This
AGREEMENT may not be assigned by either party without the consent of the other
except that: (a) MEDIMMUNE may assign this AGREEMENT without consent in the
event of a merger, acquisition or transfer of all or substantially all of its
business or assets relating to this AGREEMENT, and (b) ABBOTT may assign this
AGREEMENT to an AFFILIATE, provided that, in either case, the assigning PARTY
shall provide notice of assignment to the other PARTY and that in the case of
any assignment by ABBOTT to an AFFILIATE, ABBOTT and Abbott Laboratories shall
remain obligated to fulfill the responsibilities of such AFFILIATE.

 

15.11                 NOTICES.  Any notice to be given under this AGREEMENT shall be deemed to have
been sufficiently given and delivered upon the earlier of: (a) when received at
the address set forth below; (b) five (5) business days after being mailed by
registered or certified mail, postage prepaid with return receipt requested,
addressed to the party to be notified at its address stated below or at such
other address as may hereafter be furnished in writing to the notifying party;
or (c) on the day when sent by facsimile as confirmed by registered or
certified mail. Notices shall be delivered to the respective parties at the
addresses set forth below:

 

	
  To MEDIMMUNE:

  	
   

  	
  MedImmune, Inc.

  	
   

  	
  Copy to:

  	
   

  	
  MedImmune, Inc.

  
	
   

  	
   

  	
  One MedImmune Way

  	
   

  	
   

  	
   

  	
  One MedImmune Way

  
	
   

  	
   

  	
  Gaithersburg, MD 20878

  	
   

  	
   

  	
   

  	
  Gaithersburg, MD 20878

  
	
   

  	
   

  	
  Phone: (301) 398-4041

  	
   

  	
   

  	
   

  	
  Phone: (301) 398-4625

  
	
   

  	
   

  	
  Fax: (301) 398-9041

  	
   

  	
   

  	
   

  	
  Fax: (301) 398-9625

  
	
   

  	
   

  	
  ATTN:

  	
  Chief Executive

  	
   

  	
   

  	
   

  	
  ATTN: General Counsel

  
	
   

  	
   

  	
   

  	
  Officer

  	
   

  	
   

  	
   

  	
   

  

 

46

 

	
  To ABBOTT:

  	
   

  	
  Abbott International LLC

  	
   

  	
  Copy to:  

  	
   

  	
  Abbott Laboratories

  
	
   

  	
   

  	
  Licensing and Business

  	
   

  	
   

  	
   

  	
  D-364, AP6D

  
	
   

  	
   

  	
  Development, AP-34

  	
   

  	
   

  	
   

  	
  100 Abbott Park Road

  
	
   

  	
   

  	
  100 Abbott Park Road

  	
   

  	
   

  	
   

  	
  Abbott Park, IL 60064

  
	
   

  	
   

  	
  Abbott Park, IL 60064

  	
   

  	
   

  	
   

  	
  Phone: (947) 937-5211

  
	
   

  	
   

  	
  Phone: (847) 938-7598

  	
   

  	
   

  	
   

  	
  Fax: (847) 938-1342

  
	
   

  	
   

  	
  Fax: (847) 938-6807

  	
   

  	
   

  	
   

  	
  ATTN: DVP, International Legal

  
	
   

  	
   

  	
  ATTN: DVP, Licensing and

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Business Development

  	
   

  	
   

  	
   

  	
   

  

 

15.13.              PAYMENTS TO BE PAID IN FULL. 
Where any sum due to be paid to MEDIMMUNE hereunder is subject to any
withholding or similar tax, the PARTIES shall use their best efforts to do all
such acts and things and to sign all such documents as will enable them to take
advantage of any applicable double taxation agreement or treaty.  In the event there is no applicable double
taxation agreement or treaty, or if an applicable double taxation agreement or
treaty reduces but does not eliminate such withholding or similar tax, ABBOTT
shall pay such withholding or similar tax to the appropriate government
authority, deduct the amount paid from the amount due MEDIMMUNE and secure and
send to MEDIMMUNE the best available evidence of such payment.  To the extent that MEDIMMUNE is unable to
recover VAT or a similar tax accrued in a country in connection with its supply
of PRODUCT to ABBOTT hereunder, ABBOTT shall exert COMMERCIALLY REASONABLE
EFFORTS to assist MEDIMMUNE in recovering such tax.

 

15.12                 CURRENCY CALCULATION.  In
all cases where calculations or amounts are made or stated in U.S. Dollars,
conversion from local currency to U.S. Dollars shall be made as set forth in Section 3.2(f).

 

[Remainder
of this page intentionally left blank.]

 

47

 

The parties have caused this AGREEMENT to be
executed by their respective duly authorized representatives as of the date set
forth in the preamble above.

 

	
  ABBOTT INTERNATIONAL LLC

  	
   

  	
  MEDIMMUNE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Holger Liepmann

  	
   

  	
   

  	
  Name:

  	
  David M. Mott

  
	
   

  	
  Title:

  	
  Senior Vice President,

  	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
  International Operations

  	
   

  	
   

  
									

 

JOINDER:

The undersigned, Abbott Laboratories, an Illinois
corporation, hereby joins in the execution of this Amended and Restated
Distribution Agreement for the purpose of obligating itself to the obligations
and undertakings of Abbott International LLC, as set forth in the AGREEMENT.

 

	
  ABBOTT LABORATORIES

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Holger Liepmann

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President,

  	
   

  
	
   

  	
   

  	
  International Operations

  	
   

  
					

 

 

EXHIBIT 3.2

PRODUCT
PRICE DEFINITIONS

 

For the purposes of Section 3.2 and this
Exhibit 3.2, the following capitalized terms have the following meanings
(all capitalized terms used but not defined in this Exhibit 3.2, have
the meanings set forth in the AGREEMENT and all section references are to
sections of the AGREEMENT):

 

1.                                       “BASE PRICE” of a UNIT of PRODUCT shall mean
the sum of:  (a) [***] of COST of
GOODS for each UNIT of such PRODUCT plus (b) royalties to be paid by
MEDIMMUNE to THIRD PARTIES on each UNIT of such PRODUCT.  For purposes of calculating the BASE PRICE
solely with respect to NUMAX, the royalty percentage rate allocable to each
UNIT of NUMAX shall not exceed the greater of the royalty percentage rates
allocable to each UNIT of NUMAX: (i) payable by MEDIMMUNE to its licensors in
connection with the sale of NUMAX outside the TERRITORY, or (ii) payable by
MEDIMMUNE to its licensors in connection with the sale of the NUMAX to ABBOTT
for sale within the TERRITORY.  As of the
EFFECTIVE DATE, MEDIMMUNE represents and warrants that it has not entered into
any license agreement with respect to NUMAX which disproportionately allocates
a higher royalty rate based on its sales of NUMAX in the TERRITORY as compared
to the royalty rate based on its U.S. sales of NUMAX.  MEDIMMUNE agrees that during the TERM, it
will use COMMERCIALLY REASONABLE EFFORTS to not enter into any such license
agreements; provided, however, that restriction shall not apply
to the extent any such license agreement relates to intellectual property in
the TERRITORY but not outside of the TERRITORY and the economic terms of such
license reasonably relate to the value of such intellectual property.

 

2.                                       “CONTRACT PRICE” of a UNIT of any PRODUCT
shall mean: (a) the sum of (i) the LOWER PERCENTAGE of that portion of
NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR that is less than
or equal to the THRESHOLD plus (ii) the HIGHER PERCENTAGE of that
portion of NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR that
is in excess of the THRESHOLD, divided by (b) the total number of UNITS
of PRODUCTS included in NET SALES of all PRODUCTS (net of any UNITS which
triggered a deduction in the applicable NET SALES calculation for returns,
recalls, free goods or samples).  For clarity, the CONTRACT PRICE shall be
calculated separately for NUMAX and SYNAGIS.

 

3.                                       “ESTIMATED SALE PRICE” of a UNIT of PRODUCT
shall mean the greater of:  (a) the BASE
PRICE of such UNIT or (b) either:

 

(i)                                     with respect to PRODUCT ordered by ABBOTT and
delivered by MEDIMMUNE prior to the LAUNCH of such PRODUCT in the TERRITORY, an
amount equal to: (A) the sum of the LOWER PERCENTAGE of that portion of
ESTIMATED NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT YEAR that is
less than or equal to the THRESHOLD plus the HIGHER PERCENTAGE of that
portion of ESTIMATED NET SALES of all PRODUCTS in the TERRITORY in a CONTRACT
YEAR that is in excess of the THRESHOLD divided by (B) the number of
UNITS of PRODUCT estimated to be sold in the TERRITORY (net of any UNITS
which triggered a deduction in the applicable NET SALES calculation for
returns, recalls, free goods or samples) in
the CONTRACT YEAR upon which ESTIMATED NET SALES PRICE is calculated;

 

(ii)                                  with respect to PRODUCT ordered by ABBOTT and
delivered by MEDIMMUNE on or after LAUNCH of such PRODUCT in the TERRITORY and
until the end of the first CONTRACT YEAR thereafter, the lesser of:  (A) the ESTIMATED SALE PRICE

 

 

calculated in accordance
with subsection (i) or (B) the ESTIMATED SALE PRICE for SYNAGIS calculated
in accordance with subsection (iii) for the CONTRACT YEAR immediately
preceding the CONTRACT YEAR in which such PRODUCT was delivered; or

 

(iii)                               with respect to PRODUCT ordered by ABBOTT and
delivered by MEDIMMUNE after the first full CONTRACT YEAR following LAUNCH of
such PRODUCT in the TERRITORY, an amount equal to: (A) the sum of the LOWER PERCENTAGE of that
portion of NET SALES of all PRODUCTS in the TERRITORY in the first three
CALENDAR QUARTERS of the preceding CONTRACT YEAR that is less than or equal to
the THRESHOLD plus the HIGHER PERCENTAGE of that portion of NET SALES of
all PRODUCTS in the TERRITORY in the first three CALENDAR QUARTERS of the
preceding CONTRACT YEAR that is in excess of the THRESHOLD divided by
(B) the number of UNITS of PRODUCT included in NET SALES (net of any
UNITS which triggered a deduction in the applicable NET SALES calculation for
returns, recalls, free goods or samples) for
the first three CALENDAR QUARTERS of the preceding CONTRACT YEAR.

 

Solely for the purposes of
this paragraph 3, the LAUNCH of the liquid formulation of SYNAGIS shall not be
considered a LAUNCH (i.e., the ESTIMATED SALE PRICE for the liquid formulation
of SYNAGIS shall be calculated based on subsection (iii) above based on
the NET SALES of the lyophilized formulation of SYNAGIS in the preceding
CONTRACT YEAR).

 

For clarity, the ESTIMATED
SALE PRICE shall be calculated separately for NUMAX and SYNAGIS.

 

4.                                       “ESTIMATED NET SALES” shall mean the
estimated NET SALES of all PRODUCTS by ABBOTT during the first CONTRACT YEAR
including the LAUNCH of PRODUCT by ABBOTT. 
With respect to NUMAX, to the extent providing such an estimate would be
contrary to the applicable laws and regulations of one or more countries in the
TERRITORY the NET SALES of SYNAGIS in the previous CONTRACT YEAR in such countries
shall be deemed to be the “ESTIMATED NET SALES” for such countries.

 

5.                                       “FINAL PRICE” of a UNIT of PRODUCT shall mean
the greater of the BASE PRICE of such UNIT or the CONTRACT PRICE of such UNIT.

 

6.                                       “FIRST SEASON PRE-APPROVAL PRODUCT” shall mean
UNITS of NUMAX or the liquid formulation of SYNAGIS ordered by ABBOTT before
the respective first commercial sale of each such PRODUCT in any country in the
MAJOR MARKETS in anticipation of receiving REGULATORY APPROVAL for each such
PRODUCT, in each case, intended for sale in the [***] period after the
respective first commercial sale of each such PRODUCT in any country in the
MAJOR MARKETS.  Upon receipt of
REGULATORY APPROVAL for the applicable PRODUCT and thereafter such PRODUCT
shall no longer be deemed to be FIRST SEASON PRE-APPROVAL PRODUCT (except to
the extent of ABBOTT’s payment obligation set forth in Section 3.2(e)).

 

7.                                       “HIGHER PERCENTAGE” shall mean (a) [***] with
respect to all PRODUCT in all circumstances, except in the case of sales of SYNAGIS
on or (b) after a REVERSION DATE in countries as to which ABBOTT’s rights to
NUMAX have terminated pursuant to Section 14.3(a) and for such
sales the HIGHER PERCENTAGE shall be [***].

 

 

8.                                       “INVOICE PRICE” shall have the meaning set
forth in Section 3.2(b).

 

9.                                       “LOWER PERCENTAGE” shall mean (a) [***] with
respect to all PRODUCT in all circumstances, except in the case of sales of
SYNAGIS on or (b) after a REVERSION DATE in countries as to which ABBOTT’s
rights to NUMAX have terminated pursuant to Section 14.3(a) and for
such sales the LOWER PERCENTAGE shall be [***].

 

10.                                 “MINIMUM PRICE” of a UNIT of PRODUCT shall
mean:

 

(a)                                  in the case of SAMPLES or FIRST SEASON
PRE-APPROVAL PRODUCT, the COST OF GOODS of such UNIT (plus royalties, if any,
due by MEDIMMUNE to any THIRD PARTIES on such COST OF GOODS);

 

(b)                                 in the case of NUMAX delivered to ABBOTT
(other than SAMPLES or FIRST SEASON PRE-APPROVAL PRODUCT), in the first year of
first commercial sale of NUMAX in any country in the MAJOR MARKETS, the first
CONTRACT YEAR thereafter and any extended period described below (if any),
[***] of the ESTIMATED SALE PRICE of such UNIT; or

 

(c)                                  in the case of all other PRODUCT, [***] of
the ESTIMATED SALE PRICE of such UNIT.

 

In the case of (b) above, at
least ninety (90) days before the end of the first full CONTRACT YEAR after the
LAUNCH of NUMAX in the TERRITORY, the PARTIES shall discuss whether a [***]
rate applied during the first year of LAUNCH of NUMAX and the first CONTRACT
YEAR thereafter would have been to ABBOTT’s financial detriment during that
time period.  If ABBOTT provides
reasonable evidence that the [***] rate would have been to ABBOTT’s detriment,
the PARTIES shall discuss in good faith extending the [***] rate for an
extended period to be mutually agreed upon by the PARTIES.

 

In the case of (c) above,
for any given CALENDAR QUARTER, in the event that (i) the change in the
weighted-average exchange rate for all the MAJOR MARKETS for that CALENDAR
QUARTER (calculated as total NET SALES in local currency for the MAJOR MARKETS
divided by total NET SALES in U.S. dollars for the MAJOR MARKETS (calculated in
accordance with Section 3.2(f)) from the weighted-average exchange
rate for all the MAJOR MARKETS for the first three CALENDAR QUARTERS of the
preceding CONTRACT YEAR exceeds [***], or (ii) any change in economic
conditions, market competition or governmental price regulation in any MAJOR
MARKET causes a reduction of greater than [***] in the amount of NET SALES or
selling price of the PRODUCT in such MAJOR MARKET, the PARTIES will renegotiate
in good faith the MINIMUM PRICE for PRODUCT delivered to the carrier for the
remaining CALENDAR QUARTERS of the TERM of this AGREEMENT.

 

11.                                 “SAMPLES” shall mean PRODUCT used by ABBOTT
or its AFFILIATES for:  (a) clinical
trials conducted by ABBOTT in accordance with Section 6.9, (b)
sampling of NUMAX in accordance with a program which is reviewed and approved
by the DEVELOPMENT COMMITTEE, including but limited to, sampling in connection
with any expanded access program or in the first year of LAUNCH of NUMAX in any
country in the TERRITORY or (c) delivery of PRODUCT to REGULATORY AUTHORITIES
in connection with REGULATORY FILINGS. 
SAMPLES must be designated as such by ABBOTT at the time of order.

 

 

12.                                 “THRESHOLD” shall mean [***], except that on
or after a REVERSION in which ABBOTT’s rights to NUMAX are terminated in all
countries of the TERRITORY pursuant to Section 14.3(a), the
THRESHOLD shall be [***].  In the
event that a REVERSION DATE occurs in the middle of a CONTRACT YEAR or ABBOTT’s
rights to NUMAX are not terminated in all countries of the TERRITORY pursuant
to Section 14.3(a) so that the THRESHOLD is not determinable, the
PARTIES shall meet and agree in good faith to revise the definition of CONTRACT
PRICE, consistent to the extent possible, with the terms of this AGREEMENT.

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