Common use of Diligent Efforts Clause in Contracts

Diligent Efforts. Commencing upon the Closing Date and ending on the payment to Seller of Milestone Payments in an amount equal to the Milestone Payment Cap, Purchaser shall, shall cause each Affiliated Payment Obligor to, and shall use its commercially reasonable efforts to cause each other Payment Obligor to (i) subject to the last sentence of this Section 1.05, use Diligent Efforts to Exploit the Compound and the Products in order to achieve Net Sales and (ii) except in a manner that is consistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable, not act in a manner that intentionally reduces Net Sales, including by deferring or delaying the receipt or recognition of any sales of any Product in a manner that is inconsistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable; provided, however, that, subject in all cases to Purchaser’s compliance with its obligations under clause (i) of this Section 1.05, (A) Purchaser shall have the right to pursue the Exploitation of the Products in such a manner as Purchaser shall determine in good faith to be in its best interests, and (B) following (but not prior to) the First Commercial Sale, Purchaser shall have the right to discontinue or delay the Development of the Compound and Products in the event that that Purchaser reasonably determines in good faith that, notwithstanding Purchaser’s use of such Diligent Efforts, further investment in Development of Products would not be reasonably likely to generate a positive return on investment on a risk-adjusted basis. Notwithstanding the foregoing, prior to the First Commercial Sale, Purchaser shall not discontinue or delay the Development of the Compound and Products, including by failing to pay undisputed amounts due under the Transition Services Agreement (provided, that notwithstanding anything herein to the contrary, Purchaser may discontinue or delay such Development at any time if (x) directed to do so on the basis of human safety by any Governmental Entity or the data safety monitoring board for an Ongoing Trial, (y) the Company would not be able to distribute and sell in the United States the Product that is the subject of the Ongoing Trials without infringing any Third Party’s Intellectual Property in existence as of the time of such discontinuation or delay, or (z) [***].

Diligent Efforts. (a) Commencing upon the Closing Date and ending on the payment to Seller of Milestone Payments in an amount equal to the Milestone Payment CapClosing, Purchaser shall, Buyer shall cause each Affiliated Payment Obligor to, and shall use its commercially reasonable efforts to cause each other Payment Obligor to (i) subject to the last sentence of this Section 1.05, use Diligent Efforts to Exploit achieve the Compound Milestone Events. Buyer may satisfy such obligation in whole or in part through the activities of its Affiliates, and licensees, sublicensees, assignees and subsequent acquirers of Buyer or any of the Products Purchased Assets. If the Company in order good faith believes that Buyer is not using Diligent Efforts to achieve Net Sales and fulfill any of the Milestone Events, then the Company may provide Buyer with written notice thereof specifying in reasonable detail the reasons for such belief. If such notice is given, Buyer shall have [*] from receipt of such notice to cure such alleged deficiencies. If, after such cure period, the Company reasserts in writing substantially the same deficiencies (ii) except in a manner that is consistent “Diligence Notice”), then Buyer shall designate Representatives, including at least one officer with operating responsibility with respect to the Purchased Assets, to meet with the normal business practices Company’s Representatives within [*] from the date of Purchaser such Diligence Notice to address in good faith the Company’s belief that Buyer is not using Diligent Efforts and any steps that can be taken to cure any alleged breach of the other Payment Obligorsobligation to use Diligent Efforts. If the participating parties fail to resolve these issues within [*] after such Diligence Notice, as applicable, not act in a manner that intentionally reduces Net Sales, including by deferring or delaying then the receipt or recognition of any sales of any Product in a manner that is inconsistent with the normal business practices of Purchaser Company and the other Payment Obligors, as applicable; provided, however, that, subject in all cases to Purchaser’s compliance with its obligations under clause (i) of this Section 1.05, (A) Purchaser Buyer shall have the right to pursue initiate an alternative dispute resolution (“ADR”) proceeding in accordance with Section 9.8(b). (b) If Buyer (together with its Affiliates, licensees, sublicensees, assignees and subsequent acquirers) is no longer engaging in and does not have any plans to engage in the Exploitation activities required to achieve the Milestone Events (which activities may include pursuing potential licensees, sublicensees, assignees and subsequent acquirers), then Buyer shall send prompt written notice thereof to the Company. (c) Failure of Buyer to fulfill or perform its obligation to use Diligent Efforts shall not subject such party to any Liability to the extent such failure is caused or occasioned by acts of God, acts of terrorism, fire, explosion, flood, drought, war, riot, sabotage, embargo, strikes or other labor disputes (which strikes or disputes need not be settled), compliance with any order, regulation, or request of government, or by any other event or circumstance of like character to the foregoing beyond the reasonable control and without the fault or negligence of such party (a “Force Majeure Event”), provided such party uses commercially reasonable efforts to remove such Force Majeure Event, gives the Company prompt notice of the Products existence of such Force Majeure Event and as promptly as reasonably practicable resumes the Diligent Efforts after the Force Majeure Event is alleviated. (d) Notwithstanding anything to the contrary in such a manner as Purchaser shall determine in good faith this Agreement, Buyer may provide written notice to be in its best interests, and (B) following (but not prior to) the First Commercial Sale, Purchaser shall have the right Company of Buyer’s intent to discontinue or delay Development and/or commercialization of any Product including through its Affiliates, licensees, sublicensees, assignees and subsequent acquirers (a “Product Discontinuation”) in which case the Development obligations of the Compound Buyer under Sections 5.3(a) to 5.3(c) and Products in Sections 5.3(e) to 5.3(f) shall terminate immediately upon issuance of such notice. In the event that that Purchaser reasonably determines in good faith thatthere is a Product Discontinuation and Buyer intends to revert to SK (its Affiliates or their respective successors or assigns) all rights granted by SK to Buyer pursuant to the SK License, notwithstanding Purchaser’s use Buyer will promptly provide notice of such Diligent Efforts, further investment in Development intended reversion and the proposed timing of Products would not be reasonably likely to generate a positive return on investment on a risk-adjusted basis. Notwithstanding the foregoing, prior such reversion to the First Commercial SaleCompany and will, Purchaser shall not discontinue or delay at the Development subsequent written request of the Compound and ProductsCompany that is received by Buyer within the proposed timing of such reversion provided by Buyer, including by failing use commercially reasonable efforts to pay undisputed amounts due under assign the Transition Services Agreement (provided, that notwithstanding anything herein SK License to the contraryCompany or its nominee, Purchaser may discontinue or delay such Development at any time if (x) directed no additional expense to do so on Buyer. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the basis of human safety by any Governmental Entity or the data safety monitoring board for an Ongoing Trial, (y) the Company would not be able Securities and Exchange Commission pursuant to distribute and sell in the United States the Product that is the subject Rule 24b-2 of the Ongoing Trials without infringing any Third Party’s Intellectual Property in existence Securities Exchange Act of 1934, as of the time of such discontinuation or delay, or (z) [***]amended.

Diligent Efforts. Commencing upon Elan shall use its diligent efforts to market and sell the Closing Date Products within the Territory at its own expense, including but not limited to professional sales calls on target medical audiences (e.g. physicians, hospitals, pharmacists, etc.), advertising the Products in appropriate media and ending on participating in trade shows, conferences, expositions, and promotional seminars, all with due consideration for the payment to Seller local marketing environment in the Territory. Elan shall conduct its marketing activities in a lawful manner with appropriate or applicable standards of Milestone Payments in an amount equal to the Milestone Payment Cappharmaceutical product promotional practices, Purchaser shallfair trade, shall cause each Affiliated Payment Obligor tofair competition, and business ethics, and shall use cause its commercially reasonable efforts employees and Dealers to cause do the same. Elan shall also comply with the following diligence obligations: (a) following the Effective Date, Elan shall submit an application for marketing authorization approval in each other Payment Obligor country of the Territory for each Product within the time after the Effective Date set forth in the corresponding second column of the table below (subject to the receipt by Elan of the complete EMEA dossier for such Product no less than *** prior to the time set forth in the corresponding second column of the table below and subject to the timely provision by Ligand of such information as Elan may reasonably request for the purposed of obtaining such approval in the Non-EMEA Territories); and (b) after receipt of Pricing Approval for a Product in a country of the Territory and subject to an appropriate level of supply being available to Elan, Elan shall launch such Product in such country within the time after such receipt of Pricing Approval set forth in the corresponding third column of the table below. *** *** *** *** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. Failure to meet either diligence obligation for a Product in a country shall give Ligand the right, in its sole discretion, with *** prior written notice (if Elan has failed to cure either such diligence obligation within such *** period), to either (i) subject to the last sentence of this Section 1.05, use Diligent Efforts to Exploit the Compound and the Products *** in order to achieve Net Sales and which case *** *** or (ii) except *** In the event that Ligand determines to *** as set forth in a manner the immediately preceding sentence, any *** *** in that is consistent with the normal business practices country shall be on *** *** *** The right of Purchaser and the other Payment Obligors, as applicable, not act Ligand so to *** in a manner that intentionally reduces Net Sales, including by deferring or delaying the receipt or recognition respect of any sales failure of any Product in a manner that is inconsistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable; provided, however, that, subject in all cases Elan to Purchaser’s compliance comply with its obligations under clause (i) of this Section 1.05, (A) Purchaser shall have the right to pursue the Exploitation of the Products in such a manner as Purchaser shall determine in good faith to be in its best interests, and (B) following (but not prior to) the First Commercial Sale, Purchaser shall have the right to discontinue or delay the Development of the Compound and Products in the event that that Purchaser reasonably determines in good faith that, notwithstanding Purchaser’s use of such Diligent Efforts, further investment in Development of Products would not be reasonably likely to generate a positive return on investment on a risk-adjusted basis. Notwithstanding the foregoing, prior to the First Commercial Sale, Purchaser shall not discontinue or delay the Development of the Compound and Products, including by failing to pay undisputed amounts due under the Transition Services Agreement (provided, that notwithstanding anything herein to the contrary, Purchaser may discontinue or delay such Development at any time if (x) directed to do so on the basis of human safety by any Governmental Entity or the data safety monitoring board for an Ongoing Trial, (y) the Company would not be able to distribute and sell in the United States the Product that is the subject of the Ongoing Trials without infringing any Third Party’s Intellectual Property in existence as of the time of such discontinuation or delay, or (z) [***]Clause 8.1.

Diligent Efforts. Commencing upon the Closing Date Phytera and ending on the payment Tsumura each represent that each shall ---------------- use its reasonable best efforts to Seller of Milestone Payments in an amount equal bring each Compound it elects to enter into product development (Stage 5) to the Milestone Payment Capmarketplace through a diligent and aggressive program of development, Purchaser shallproduction and distribution and each party acknowledges that the exclusive license granted by the other party pursuant to Section 4 above was granted based on such representation. However, in so doing and otherwise meeting its obligations hereunder with respect to the development, production and distribution of Products, Phytera and Tsumura shall cause each Affiliated Payment Obligor tobe entitled to exercise prudent and reasonable business judgement, and shall use its commercially reasonable efforts be considered to cause be meeting such obligations so long as each is reporting to the other Payment Obligor party and the Steering Committee as provided herein and is providing the necessary financial, personnel and other resources which are reasonably required to maintain progress in accomplishing the development, production and distribution of Products, and conducts the activities reasonably required to maintain scheduled progress in accomplishing the same. Neither Phytera nor Tsumura shall be responsible for any failure which arises as a direct result of (i) subject to unanticipated technical or scientific problems or other causes outside the last sentence direct control of this Section 1.05the parties and their Affiliates and Licensees, use Diligent Efforts to Exploit the Compound and the Products in order to achieve Net Sales and (ii) except in failure of the other party to meet its obligations hereunder, or (iii) action ______________ * This portion of the Exhibit has been omitted pursuant to a manner that is consistent request for Confidential Treatment under Rule 406 of the Securities Act of 1033, as amended. The complete Exhibit, including the portions for which confidential treatment has been requested, has been filed separately with the normal business practices of Purchaser Securities and the other Payment Obligors, as applicable, not act in a manner that intentionally reduces Net Sales, including by deferring Exchange Commission. or delaying the receipt or recognition inaction of any federal, state or other governmental agency whose approval is required for clinical investigation or commercial sales of any Product in a manner that is inconsistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable; provided, however, that, subject in all cases to Purchaser’s compliance with its obligations under clause (i) of this Section 1.05, (A) Purchaser shall have the right to pursue the Exploitation of the Products in where such a manner as Purchaser shall determine in good faith activity or inactivity does not arise from the intentional or negligent acts or failures to be in its best interests, and (B) following (but not prior to) the First Commercial Sale, Purchaser shall have the right to discontinue or delay the Development of the Compound and Products in the event that that Purchaser reasonably determines in good faith that, notwithstanding Purchaser’s use of such Diligent Efforts, further investment in Development of Products would not be reasonably likely to generate a positive return on investment on a risk-adjusted basis. Notwithstanding the foregoing, prior to the First Commercial Sale, Purchaser shall not discontinue or delay the Development of the Compound and Products, including by failing to pay undisputed amounts due under the Transition Services Agreement (provided, that notwithstanding anything herein to the contrary, Purchaser may discontinue or delay such Development at any time if (x) directed to do so act on the basis part of human safety by any Governmental Entity Phytera or the data safety monitoring board for an Ongoing TrialTsumura, (y) the Company would not be able to distribute and sell in the United States the Product that is the subject of the Ongoing Trials without infringing any Third Party’s Intellectual Property in existence as of the time of such discontinuation their Affiliates or delay, or (z) [***]Licensees.

Diligent Efforts. Commencing upon the Closing Date Closing, Parent and ending on the payment to Seller Surviving Corporation (and any subsequent acquirer of Milestone Payments in an amount equal to the Milestone Payment Cap, Purchaser shall, either Parent or Surviving Corporation) shall cause each Affiliated Payment Obligor to, and shall use its commercially reasonable efforts to cause each other Payment Obligor to (i) subject to the last sentence of this Section 1.05, use Diligent Efforts to Exploit achieve the Compound and Milestone Events. If the Products in order to achieve Net Sales and (ii) except in a manner that is consistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable, not act in a manner that intentionally reduces Net Sales, including by deferring or delaying the receipt or recognition of any sales of any Product in a manner that is inconsistent with the normal business practices of Purchaser and the other Payment Obligors, as applicable; provided, however, that, subject in all cases to Purchaser’s compliance with its obligations under clause (i) of this Section 1.05, (A) Purchaser shall have the right to pursue the Exploitation of the Products in such a manner as Purchaser shall determine Stockholders’ Representative in good faith believes that Parent is not using the Diligent Efforts required hereby to be fulfill any of the Milestone Events , then the Stockholders’ Representative may provide Parent with written notice thereof specifying in its best interestsreasonable detail the reasons for such belief. If such notice is given, and (B) following (but not prior to) the First Commercial Sale, Purchaser Parent shall have [***] days from receipt of notice to cure such alleged deficiencies. If, after such cure period, the right to discontinue or delay Stockholders’ Representative reasserts in writing substantially the Development of the Compound and Products in the event that that Purchaser reasonably determines in good faith thatsame deficiencies (a “Diligence Notice”), notwithstanding Purchaser’s use of such Diligent Efforts, further investment in Development of Products would not be reasonably likely to generate a positive return on investment on a risk-adjusted basis. Notwithstanding the foregoing, prior to the First Commercial Sale, Purchaser shall not discontinue or delay the Development of the Compound and Products, including by failing to pay undisputed amounts due under the Transition Services Agreement (provided, that notwithstanding anything herein to the contrary, Purchaser may discontinue or delay such Development at any time if (x) directed to do so on the basis of human safety by any Governmental Entity or the data safety monitoring board for an Ongoing Trial, (y) the Company would not be able to distribute and sell in the United States the Product that is the subject of the Ongoing Trials without infringing any Third Party’s Intellectual Property in existence as of the time of such discontinuation or delay, or (z) then [***]. If Parent and Surviving Corporation or any of their respective Affiliates are no longer engaging in the activities required to achieve the Milestone Events, then Parent shall send written notice thereof to the Stockholders’ Representative within 60 calendar days of the date on which Parent and Surviving Corporation or any of their respective Affiliates first cease engaging in the Certain portions of this Exhibit have been omitted pursuant to a request for confidentiality. Such omitted portions, which are marked with brackets [ ] and an asterisk*, have been separately filed with the Commission. required activities. Following a Successor’s acquisition of Parent or the Surviving Corporation, as applicable; such Successor shall, for a period of at least [***] following such acquisition, exercise Diligent Efforts at least equal to those that Parent devoted to the DZNS Product in the year preceding the acquisition. Failure of Parent or Surviving Corporation to fulfill or perform its obligation to use Diligent Efforts under this Agreement shall not subject such party to any liability to the extent such failure is caused or occasioned by acts of God, acts of terrorism, fire, explosion, flood, drought, war, riot, sabotage, embargo, strikes or other labor disputes (which strikes or disputes need not be settled), compliance with any order, regulation, or request of government, or by any other event or circumstance of like character to the foregoing beyond the reasonable control and without the fault or negligence of such party, (a “Force Majeure Event”), provided such party uses reasonable efforts to remove such Force Majeure Event, gives the Stockholders’ Representative prompt notice of the existence of such Force Majeure Event and as promptly as reasonably practicable resumes Diligent Efforts after the Force Majeure Event is alleviated. Notwithstanding anything to the contrary in this Agreement, at any time after the Effective Time Parent may provide written notice to the Stockholders’ Representative of Parent’s intent to discontinue development and commercialization of the DZNS Products, in which case the obligations of Parent and its Affiliates under this Agreement, including this Section 1.7, shall terminate immediately upon issuance of such notice (except (i) Section 4.3 shall survive for three (3) years after the Closing and (ii) Parent’s obligation to pay any unpaid amounts under this Agreement which were earned prior to the issuance of such notice shall survive). Following the Stockholder’s Representative’s receipt of such written notice from Parent, then, at the subsequent written request of the Stockholders’ Representative, Parent shall, subject to the terms and conditions of the SK License and to the extent permitted by the SK License and SK Bio, assign to the Stockholders’ Representative or its nominee, on behalf of the Former Holders, all assets of Parent and its Affiliates (including intellectual property rights and contracts) solely related to the DZNS Product (specifically including, to the extent permitted under the SK License or otherwise approved in writing by SK Bio, all rights under the SK License, all Neuronex Patents, all data solely related to the DZNS Product developed by or on behalf of the Company prior to Closing, all regulatory filings and approvals solely related to the DZNS Product, and all inventory of DZNS Product (with the Stockholders’ Representative promptly reimbursing Parent’s actual costs for such inventory)), with the Parent and the Stockholders’ Representative working together in good faith to facilitate and effectuate such assignment.