Common use of Preferred Partner Clause in Contracts

Preferred Partner. In consideration for Technical Support to be provided by Schering under Section 3.3, Migenix hereby agrees that Schering shall be its “Preferred Partner” for the further development and commercialization of Celgosivir for the treatment of HCV on the terms set out in this Section 4.5. (a) Upon the first occurrence of a given Results Event, Migenix shall provide Schering with a copy of the corresponding summary or executive summary of results (the “Results”) promptly after such Results become available to Migenix. All Results provided to Schering pursuant to this Section 4.5(a) will be provided in electronic format reasonably acceptable to both Schering and Migenix, provided that such format is available to Migenix without additional expense. (b) Migenix agrees that, in consideration of Schering’s status as a Preferred Partner, during each [****] (each an “Option Period”): (i) Schering shall have the right (exercisable in its sole discretion) to notify Migenix that it is interested in obtaining rights to rights to distribute, market, promote, offer for sale, sell or otherwise commercialize Celgosivir or the Combination Therapy in the Territory for the treatment of HCV (the “Rights”); and (ii) if the Option Period is in respect of either the interim or final Results of the Clinical Trial, Migenix shall provide third parties with access to only those elements of the corresponding Results which have been publicly disclosed pursuant to Section 6. If Schering does not provide notice to Migenix in accordance with Section 4.5(b)(i) during the applicable Option Period, then upon expiration of such Option Period, Schering’s right to exercise the Rights as they relate to such Option Period shall expire. (c) If, during any Option Period, Schering notifies Migenix pursuant to Section 4.5(b)(i) that it is interested in obtaining Rights, then for a period [****] (the “Negotiation Period”), then during the Negotiation Period, Schering shall have the right (upon request and at Schering’s sole expense) to conduct a reasonable due diligence review of Celgosivir (including without limitation any products or therapies being developed by Migenix containing or utilizing Celgosivir and pegylated alpha-interferon and/or ribavirin). Migenix shall upon request provide Schering with reasonable access to Migenix’s facilities, records and/or personnel (during normal business hours) to enable Schering to complete its due diligence review. In addition, the following provisions shall apply during the Negotiation Period: (i) if the Negotiation Period is in respect of the Results of the Monotherapy Trial: A. the parties may enter into good faith negotiations respecting an agreement granting such requested Rights to Schering (and/or its designated Affiliates); and B. during the Negotiation Period [****]; and (ii) if the Negotiation Period is in respect of either the interim or final Results of the Clinical Trial: A. the parties shall use good faith efforts to negotiate a definitive agreement granting such requested Rights to Schering (and/or its designated Affiliates); and B. during the Negotiation Period [****]. (d) After the expiry of any Negotiation Period, Migenix may enter into and conclude negotiations with any third parties respecting the requested Rights or any other rights related to Celgosivir, but if Migenix has not entered into a definitive agreement granting a third party some or all of such Rights prior to the occurrence of a subsequent Results Event, then such Rights will again be subject to Schering’s option rights under Sections 4.5(a)-(c) upon the occurrence of such subsequent Results Event. Alternatively, if Migenix has entered into a definitive agreement granting to a third party some or all of the requested Rights to a third party after the expiry of a Negotiation Period but prior to the occurrence of a subsequent Results Event, then, after the entering into of such agreement, Schering shall have no further rights under this Section 4.5 with respect to the Rights which are the subject of such agreement. Once all of the Rights are the subject of such an agreement, Migenix shall thereafter have no obligation to disclose Results to Schering. (e) If, during any Option Period or Negotiation Period, Migenix (to the extent permitted under this Agreement) enters into any license agreement, or any other form of agreement or transaction, that would have the effect of granting, transferring or conveying to any third party any rights to distribute, market, promote, offer for sale, sell or otherwise commercialize Celgosivir or the Combination Therapy in the Territory for the treatment of HCV (a “Celgosivir Agreement”), it shall immediately notify Schering. Upon such notice, Schering shall have the right to immediately discontinue all Technical Support being provided to Migenix pursuant to Section 3.3. Such termination of Technical Support shall not affect Schering’s other obligations under this Agreement, but Schering shall thereafter have no rights under Section 4.5.