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3.2 Post Exercise Development Plan and Budget and Activities...................................... 41
3.3 Additional Licensor Development Activities ............................................................. 42
3.4 Development and Regulatory Diligence ..................................................................... 43
3.5 Pre-Clinical and Clinical Supply of Licensed Products; Subcontracting ................... 44
3.6 Supply of Technology for Development Purposes ..................................................... 46
3.7 Development Costs ..................................................................................................... 47
3.8 Regulatory Matters...................................................................................................... 52
3.9 Compliance ................................................................................................................. 55
3.10 Records ....................................................................................................................... 55
3.11 Human Samples .......................................................................................................... 56
ARTICLE 4 COMMERCIALIZATION ......................................................................................... 56
4.1 In General.................................................................................................................... 56
4.2 Commercialization Plan .............................................................................................. 56
4.3 Diligence ..................................................................................................................... 57
4.4 Compliance with Applicable Law .............................................................................. 58
4.5 Booking of Sales; Distribution ................................................................................... 58
4.6 Product Trademarks .................................................................................................... 58
4.7 Markings ..................................................................................................................... 58
4.8 Commercial Supply of Licensed Antibodies or Licensed Products ........................... 59
ARTICLE 5 GRANT OF RIGHTS ................................................................................................. 59
5.1 Option Grants to AbbVie ........................................................................................... 59
5.2 License Grants to AbbVie ........................................................................................... 59
5.3 Grants to Licensor ....................................................................................................... 60
5.4 Sublicenses .................................................................................................................. 60
5.5 Distributorships ........................................................................................................... 60
5.6 Co-Promotion Rights .................................................................................................. 60
5.7 Third Party Intellectual Property ................................................................................ 61
5.8 Retention of Rights ..................................................................................................... 62
5.9 Confirmatory Patent License ...................................................................................... 63
5.10 Exclusivity .................................................................................................................. 63
ARTICLE 6 PAYMENTS AND RECORDS .................................................................................. 64
6.1 Upfront Payment ......................................................................................................... 64
6.2 Development Milestones ............................................................................................ 64
6.3 Profit and Loss ............................................................................................................ 66
6.4 Calculation and Payment of US Net Profit, US Net Loss, or ROW Profit Share ...... 68
6.5 Royalties ..................................................................................................................... 70
6.6 Payments and Reports ................................................................................................. 74
6.7 Mode of Payment; Offsets .......................................................................................... 74
6.8 Accounting Procedures ............................................................................................... 75
6.9 Withholding Taxes ...................................................................................................... 75
6.10 Indirect Taxes.............................................................................................................. 76
6.11 Interest on Late Payments ........................................................................................... 76
6.12 Financial Records........................................................................................................ 76
6.13 Audit ........................................................................................................................... 77
6.14 Audit Dispute .............................................................................................................. 77
6.15 Confidentiality ............................................................................................................ 77
6.16 Diagnostic ................................................................................................................... 78
6.17 No Other Compensation ............................................................................................. 78
ARTICLE 7 INTELLECTUAL PROPERTY ................................................................................. 78
7.1 Ownership of Intellectual Property ............................................................................. 78
7.2 Maintenance and Prosecution of Patents .................................................................... 79
7.3 Enforcement of Patents ............................................................................................... 83
7.4 Infringement Claims by Third Parties ......................................................................... 84
7.5 Invalidity or Unenforceability Defenses or Actions ................................................... 85
7.7 Product Trademarks .................................................................................................... 86
7.7 Licensor's Costs .......................................................................................................... 87
7.8 Inventor's Remuneration ............................................................................................ 87
ARTICLE 8 PHARMACOVIGILANCE AND SAFETY .............................................................. 87
8.1 Pharmacovigilance ...................................................................................................... 87
8.2 Global Safety Database ............................................................................................... 88
ARTICLE 9 CONFIDENTIALITY AND NON-DISCLOSURE ................................................... 88
9.1 Product Information .................................................................................................... 88
9.2 Confidentiality Obligations ......................................................................................... 88
9.3 Permitted Disclosures ................................................................................................. 90
9.4 Use of Name ............................................................................................................... 91
9.5 Public Announcements ............................................................................................... 92
9.6 Publications ................................................................................................................. 92
9.7 Return of Confidential Information ............................................................................ 94
9.8 Prior Confidentiality ................................................................................................... 94
9.9 Survival ....................................................................................................................... 94
ARTICLE 10 REPRESENTATIONS AND WARRANTIES....................................................... 94
10.1 Mutual Representations and Warranties ..................................................................... 94
10.2 Additional Representations and Warranties of Licensor ............................................ 95
10.3 Additional Covenants of Licensor ............................................................................ 101
10.4 DISCLAIMER OF WARRANTIES ......................................................................... 101
ARTICLE 11 INDEMNITY ........................................................................................................ 101
11.1 Indemnification of Licensor ...................................................................................... 101
11.2 Indemnification of AbbVie ....................................................................................... 102
11.3 Certain Losses ........................................................................................................... 102
11.4 Notice of Claim ......................................................................................................... 103
11.5 Control of Defense .................................................................................................... 103
11.6 Special, Indirect, and Other Losses........................................................................... 105
11.7 Insurance ................................................................................................................... 105
ARTICLE 12 TERM AND TERMINATION ............................................................................. 106
12.1 Term .......................................................................................................................... 106
12.2 Termination for Material Breach .............................................................................. 107
12.3 Material Breach Related to Diligence in Major Markets .......................................... 108
12.4 Invocation of Termination for Material Breach ........................................................ 108
12.5 For Convenience ....................................................................................................... 108
12.6 Termination for Insolvency ....................................................................................... 108
12.7 Rights in Bankruptcy ................................................................................................ 108
12.8 Effects of Termination and Option Expiration ......................................................... 109
12.9 Transition .................................................................................................................. 112
12.10 Reverse Royalty ........................................................................................................ 115
12.11 Remedies ................................................................................................................... 115
12.12 Accrued Rights; Surviving Obligations .................................................................... 115
ARTICLE 13 MISCELLANEOUS ............................................................................................. 116
13.1 Force Majeure ........................................................................................................... 116
13.2 Change in Control of Licensor .................................................................................. 116
13.3 Export Control .......................................................................................................... 118