Common use of Exercise of Opt-Out Right Clause in Contracts

Exercise of Opt-Out Right. To the extent that ARCHEMIX exercises its Opt-Out Right with respect to a Co-Developed Development Candidate in accordance with Section 4.10.6(d), any Product Derived from such Co-Developed Development Candidate shall be deemed to be a Royalty-Bearing Product and MERCK shall pay ARCHEMIX a royalty based on Annual Net Sales of such Royalty-Bearing Product for purposes of this Agreement at the rates set forth in Section 6.6.1(a); provided, that, (A) except as set forth in Section 3.9.3 with respect to the [***] Target, to the extent that such Royalty-Bearing Product was Developed from an ARCHEMIX Internal Research Project, the royalty rates applicable to the two top tiers of Annual Net Sales set forth in Section 6.6.1(a) shall be [***] by [***] percentage points (i.e., the [***]% rate shall be [***] to [***]% and the [***]% rate shall be [***] to [***]%); and (B) the royalty rates applicable to sales of such Royalty-Bearing Product in [***] shall be [***] (1) in the case of an ARCHEMIX 50% Co-Development Percentage by (x) [***] percent ([***]%) if the Opt-Out Right is exercised on the [***] Opt-Out Date (but not before) and (y) [***] percent ([***]%) if the Opt-Out Right is exercised after the [***] Opt-Out Date but on or before the [***] Opt-Out Date, and (2) in the case of an ARCHEMIX [***]% Co-Development Percentage by (y) [***] percent ([***]%) if the Opt-Out Right is exercised on the [***] Opt-Out Date (but not before) and (z) [***] percent ([***]%) if the Opt-Out Right is exercised after the [***] Opt-Out Date but on or before the [***] Opt-Out Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. Date. For purposes of clarity, the adjustment in the royalty rates described in this Section 6.6.1(b)(iii) shall be determined by first determining the adjustment pursuant to subsection (B) above and then determining the increase pursuant to subsection (A) above. By way of example, if ARCHEMIX exercises its Opt-Out Right with respect to a Co-Developed Development Candidate on the [***] Opt-Out Date, the royalty rates applicable to the two highest tiers of Annual Net Sales shall be [***] from [***]% and [***]% respectively, to [***]% and [***]%.

Exercise of Opt-Out Right. To (i) Within [**] days after any of the extent following stages of Development or Commercialization of a Licensed Product under the Program (each such stage, an “Opt-Out Point”), each Party shall have the right, in its sole discretion, to opt-out of further Development and Commercialization of the Licensed Product(s) under the Program, in its entirety or on a Licensed Product-by-Licensed Product basis (each such Licensed Product, an “Opt-Out Product”), by providing written notice to the other Party citing this Section 4.9(a): (A) [**]; (B) [**]; (C) [**]; (D) [**]; and (E) Thereafter on [**] months prior written notice [**] annually during the [**] quarter of the other Party’s fiscal year. (ii) If a Party exercise its Opt-Out Right, then the other Party may (A) assume the unilateral Development and Commercialization of the Opt-Out Product(s), in which case such Party shall become the Continuing Party with respect to such Opt-Out Product(s); or (B) decide not to elect to assume such Development and Commercialization of the Opt-Out Product(s), in which case such Party shall be deemed to have terminated this Agreement at will pursuant to Section 14.4 solely with respect to such Opt-Out Product(s) (it being understood that ARCHEMIX the Parties shall have the right to continue to Collaborate on the Development and Commercialization of the remaining Licensed Product(s) under the Program subject to the terms and conditions of this Agreement). (iii) Notwithstanding anything in this Agreement to the contrary, in no event shall either Party have the right to unilaterally Develop and Commercialize a Licensed Product beyond Phase I Completion at the same time that the Parties are also Collaborating on the Development and Commercialization of a Licensed Product in a Phase II Study or beyond hereunder. (iv) For purposes of clarity, (A) no exercise by a Party of its Opt-Out Right shall constitute a breach of such Party’s obligations under this Agreement, and (B) if a Party exercises its Opt-Out Right with respect to a Co-Developed Development Candidate in accordance with under this Section 4.10.6(d)4.9, any Product Derived from then such Co-Developed Development Candidate Party shall be deemed to be a Royaltyhave opted-Bearing Product and MERCK shall pay ARCHEMIX a royalty based on Annual Net Sales out of such Royalty-Bearing Product for purposes of this Agreement at the rates set forth Program, in Section 6.6.1(a); provided, that, (A) except as set forth in Section 3.9.3 its entirety or with respect to the [***] Target, to the extent that such Royalty-Bearing Product was Developed from an ARCHEMIX Internal Research Project, the royalty rates applicable to the two top tiers of Annual Net Sales set forth in Section 6.6.1(a) shall be [***] by [***] percentage points (i.e., the [***]% rate shall be [***] to [***]% and the [***]% rate shall be [***] to [***]%); and (B) the royalty rates applicable to sales of such Royalty-Bearing Product in [***] shall be [***] (1) in the case of an ARCHEMIX 50% Co-Development Percentage by (x) [***] percent ([***]%) if the Opt-Out Right is exercised on Product(s), as applicable, for the [***] Opt-Out Date (but not before) and (y) [***] percent ([***]%) if entire Territory, regardless of whether any Licensed Product was being Developed under the Opt-Out Right is exercised after the [***] Opt-Out Date but on Program for sale, or before the [***] Opt-Out Datewas being sold, and (2) in the case of an ARCHEMIX [***]% Co-Development Percentage by (y) [***] percent ([***]%) if the Opt-Out Right is exercised on the [***] Opt-Out Date (but not before) and (z) [***] percent ([***]%) if the Opt-Out Right is exercised after the [***] Opt-Out Date but on or before the [***] Opt-Out Portions of this Exhibit were omitted and have been filed separately with the Secretary a particular part of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. Date. For purposes of clarity, the adjustment in the royalty rates described in this Section 6.6.1(b)(iii) shall be determined by first determining the adjustment pursuant to subsection (B) above and then determining the increase pursuant to subsection (A) above. By way of example, if ARCHEMIX exercises its Opt-Out Right with respect to a Co-Developed Development Candidate on the [***] Opt-Out Date, the royalty rates applicable to the two highest tiers of Annual Net Sales shall be [***] from [***]% and [***]% respectively, to [***]% and [***]%Territory.

Exercise of Opt-Out Right. To (i) Within [**] days after any of the extent following stages of Development or Commercialization of a Licensed Product under the Program (each such stage, an “Opt-Out Point”), each Party shall have the right, in its sole discretion, to opt-out of further Development and Commercialization of the Licensed Product(s) under the Program, in its entirety or on a Licensed Product-by-Licensed Product basis (each such Licensed Product, an “Opt-Out Product”), by providing written notice to the other Party citing this Section 4.9(a): (A) [**]; [**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. (B) [**]; (C) [**]; (D) [**]; and (E) Thereafter on [**] months prior written notice [**] annually during the [**] quarter of the other Party’s fiscal year. (ii) If a Party exercise its Opt-Out Right, then the other Party may (A) assume the unilateral Development and Commercialization of the Opt-Out Product(s), in which case such Party shall become the Continuing Party with respect to such Opt-Out Product(s); or (B) decide not to elect to assume such Development and Commercialization of the Opt-Out Product(s), in which case such Party shall be deemed to have terminated this Agreement at will pursuant to Section 14.4 solely with respect to such Opt-Out Product(s) (it being understood that ARCHEMIX the Parties shall have the right to continue to Collaborate on the Development and Commercialization of the remaining Licensed Product(s) under the Program subject to the terms and conditions of this Agreement). (iii) Notwithstanding anything in this Agreement to the contrary, in no event shall either Party have the right to unilaterally Develop and Commercialize a Licensed Product beyond Phase I Completion at the same time that the Parties are also Collaborating on the Development and Commercialization of a Licensed Product in a Phase II Study or beyond hereunder. (iv) For purposes of clarity, (A) no exercise by a Party of its Opt-Out Right shall constitute a breach of such Party’s obligations under this Agreement, and (B) if a Party exercises its Opt-Out Right with respect to a Co-Developed Development Candidate in accordance with under this Section 4.10.6(d)4.9, any Product Derived from then such Co-Developed Development Candidate Party shall be deemed to be a Royaltyhave opted-Bearing Product and MERCK shall pay ARCHEMIX a royalty based on Annual Net Sales out of such Royalty-Bearing Product for purposes of this Agreement at the rates set forth Program, in Section 6.6.1(a); provided, that, (A) except as set forth in Section 3.9.3 its entirety or with respect to the [***] Target, to the extent that such Royalty-Bearing Product was Developed from an ARCHEMIX Internal Research Project, the royalty rates applicable to the two top tiers of Annual Net Sales set forth in Section 6.6.1(a) shall be [***] by [***] percentage points (i.e., the [***]% rate shall be [***] to [***]% and the [***]% rate shall be [***] to [***]%); and (B) the royalty rates applicable to sales of such Royalty-Bearing Product in [***] shall be [***] (1) in the case of an ARCHEMIX 50% Co-Development Percentage by (x) [***] percent ([***]%) if the Opt-Out Right is exercised on Product(s), as applicable, for the [***] Opt-Out Date (but not before) and (y) [***] percent ([***]%) if entire Territory, regardless of whether any Licensed Product was being Developed under the Opt-Out Right is exercised after the [***] Opt-Out Date but on Program for sale, or before the [***] Opt-Out Datewas being sold, and (2) in the case of an ARCHEMIX [***]% Co-Development Percentage by (y) [***] percent ([***]%) if the Opt-Out Right is exercised on the [***] Opt-Out Date (but not before) and (z) [***] percent ([***]%) if the Opt-Out Right is exercised after the [***] Opt-Out Date but on or before the [***] Opt-Out Portions of this Exhibit were omitted and have been filed separately with the Secretary a particular part of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act. Date. For purposes of clarity, the adjustment in the royalty rates described in this Section 6.6.1(b)(iii) shall be determined by first determining the adjustment pursuant to subsection (B) above and then determining the increase pursuant to subsection (A) above. By way of example, if ARCHEMIX exercises its Opt-Out Right with respect to a Co-Developed Development Candidate on the [***] Opt-Out Date, the royalty rates applicable to the two highest tiers of Annual Net Sales shall be [***] from [***]% and [***]% respectively, to [***]% and [***]%Territory.