OTC LICENSE AGREEMENT

Exhibit 10.1

Execution Copy

OTC LICENSE AGREEMENT

By and Between

SANTARUS, INC.

and

SCHERING-PLOUGH HEALTHCARE PRODUCTS, INC.

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

OTC LICENSE AGREEMENT

     This OTC License Agreement (the “Agreement”), dated the 17 ^th day of October, 2006, is by and between Santarus, Inc., a Delaware corporation having offices at 10590 West Ocean Air Drive, Suite 200, San Diego, CA 92130 (“Santarus”), and Schering-Plough Healthcare Products, Inc., a Delaware corporation having offices at 556 Morris Avenue, Summit, NJ 07901-1330 (“Schering”) (each a “Party” and collectively, the “Parties”).

RECITALS

      Whereas , Santarus has developed, manufactures, markets and sells a line of pharmaceutical products based on proton pump inhibitors in combination with one or more buffering agents under the Zegerid ^® brand and available by prescription;

      Whereas , Schering is interested in developing, marketing and selling a version of those products for the OTC market to provide consumers with easier access to therapeutic relief for certain health conditions; and

      Whereas , Schering has experience and expertise in developing, marketing and selling pharmaceutical products for the OTC market and in successfully establishing brand strength; and

      Whereas , Santarus is interested in licensing Schering to utilize its resources and capabilities, in coordination with Santarus and subject to the terms and conditions set forth herein, to develop and commercialize OTC versions of its Zegerid brand products for the OTC market in the Territory; and

      Whereas , Santarus and Schering are interested in establishing a relationship pursuant to which Santarus shall grant to Schering certain rights and licenses under the Santarus IP to develop, manufacture, market and sell Licensed Products for Licensed Indications in the Field and Territory; and

      Whereas , Schering and Santarus are interested in entering into an exclusive arrangement, as set forth more specifically in this Agreement, to benefit both the OTC products developed and commercialized by Schering hereunder and Zegerid brand prescription products developed and commercialized by Santarus, in each case using the Product Marks and/or Santarus Marks, and to help maximize brand value in the Territory; and

      Whereas , Santarus and Schering wish to establish a joint steering committee as set forth herein to monitor Schering’s development and commercialization of Licensed Products for the OTC market, and to facilitate communications between them regarding development and commercialization of the Licensed Products for the OTC market and Santarus’ Prescription Products, and to provide a venue for discussion and/or approval of certain activities of Schering under the Santarus IP and concerning the Licensed Products in the Territory in order to ensure that Schering is not exceeding the scope of its license grant by taking actions that are likely to reduce the market for Prescription Products bearing the Santarus Marks and would not otherwise be permitted under this Agreement.

      NOW THEREFORE , for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the Parties as follows.

ARTICLE 1
DEFINITIONS

     All references to Exhibits, Articles and Sections shall be references to Exhibits, Articles and Sections of this Agreement. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders. The term “including” as used herein shall mean including, without limiting the generality of any description preceding such term. In addition, except as otherwise expressly provided herein, the following terms in this Agreement shall have the following meanings:

     1.1 “ Adverse Event ” means any undesirable event or experience associated with the use of a medicinal product, including a biological product or medical device in humans, whether or not expected, and whether or not considered related to or caused by the product, including, but not limited to, an event or experience that occurs: in the course of the use of the product in professional practice; from overdose whether accidental or intentional; from abuse; from withdrawal; or from a failure of expected pharmacological or biological therapeutic action of the product.

     1.2 “ Affiliate ” means any corporate or other entity which, directly or indirectly, controls, is controlled by, or is under common control with such party where “control” means the ownership of more than 50% of the voting shares of a corporation, or ability to control the management decisions thereof, or decision-making authority as to an unincorporated entity.

     1.3 “ Business Day ” means a day other than a Saturday, Sunday, bank or other United States Government holiday.

     1.4 “ Combination Product(s) ” means any product containing both a Licensed Product and one or more other pharmaceutically active agents or active ingredients that do not constitute a Licensed Product. For purposes of this definition, the omeprazole and buffering agent(s) contained in a Product shall not be considered to be “pharmaceutically active agents or active ingredients that do not constitute a Licensed Product”.

     1.5 “ Confidential Information ” shall have the meaning ascribed to it in Section 8.1.

     1.6 “ Control ” or “ Controlled ” means, with respect to any Santarus IP or Schering Incorporated IP, possession (whether by ownership or license, other than pursuant to this Agreement) by a Party or its Affiliates of the ability to grant the licenses or sublicenses as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

     1.7 “ Effective Date ” means the date upon which the applicable waiting period under the HSR Act expires or is earlier terminated.

     1.8 “ FDA ” means the United States Food and Drug Administration.

     1.9 “ Field ” means all therapeutic uses and Indications in humans for which a physician’s prescription is not required. This may be used interchangeably with the phrase “OTC market”.

     1.10 “ First Commercial Sale ” means the date of the first, bona-fide, arms-length commercial sale (other than for purposes of clinical trials, regulatory approval, compassionate use or test marketing) of a Licensed Product after Marketing Approval in the Field in the Territory by or on behalf of Schering, an Affiliate or Sublicensee.

     1.11 “ Formulation ” means, with respect to a Product, a pharmaceutically acceptable composition differing from other forms of such Product by choice of excipients (e.g., added flavoring), route of administration (e.g., oral versus cutaneous), release rate of the active pharmaceutical ingredient and/or dosage form (e.g., liquid versus capsule). For clarity, “Formulations” of a Licensed Product shall exclude versions of such Licensed Product differing in strength or dosage amount of omeprazole.

     1.12 “ Hatch-Waxman Act ” means the U.S. Federal Drug Price Competition and Patent Term Restoration Act of 1984, as amended.

     1.13 “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     1.14 “ Indication ” means a medical condition for which a pharmaceutical product is intended to be used. With respect to Licensed Products, Indications are approved by a Regulatory Authority (whether by monograph or NDA) and stated on packaging materials, labels and/or labeling accompanying the Product.

     1.15 “ Initial Indication ” means the short term (rather than chronic) prevention, treatment and relief of heartburn and frequent heartburn in adults (18 years or older).

     1.16 “ Initial Product ” means Formulations of the Licensed Product containing a 20 mg dose of omeprazole formulated in combination with one or more buffering agents and that, as of the date of this Agreement, are being marketed or are in development by Santarus (which are the capsule, caplet, chewable tablet, or powder for oral suspension Formulations).

     1.17 “ Licensed Indications ” means (i) the Initial Indication, and (ii) any other Indications for Licensed Products that are approved in accordance with Section 2.6 and Section 2.6.4, as applicable.

     1.18 “ Licensed Product(s) ” means any of the following OTC Products: (i) Products containing a 20 mg dose of omeprazole and no other PPI, (ii) Products containing omeprazole (and no other PPI) at doses other than 20 mg, if any, that have been approved in accordance with Section 2.6 and Section 2.6.4, as applicable, and (iii) Combination Products that are approved in accordance with Section 2.6 and Section 2.6.4, as applicable.

     1.19 “ Managed Care Market ” means health maintenance organizations, private health insurers, pharmaceutical benefits managers, government payors (including Medicare Part D), long-term care providers, organized employer formularies and group purchasing organizations and other organized buyer groups, which group purchasing organizations and other organized buyer groups are not themselves retailers, wholesalers or other distributors of Licensed Products.

     1.20 “ Marketing Approval ” means any approval, product and/or establishment license, registration or authorization of any Regulatory Authority necessary for the commercial manufacture, use, storage, import, export, transport, distribution, marketing or sale of a Product.

     1.21 “ Marketing Commitment ” means the out-of-pocket amount incurred by Schering to market the first Licensed Product (in each case, to the extent not deducted from gross sales in determination of Net Sales), including marketing programs, consumer promotions, consumer advertising, consumer events, product public relations (excluding general corporate public relations), product display and trade promotion, as well as Emerging Issues Task Force (EITF) trade and consumer allowances.

     1.22 “ Missouri Agreement ” means that certain license agreement between Santarus and the Curators of the University of Missouri dated January 26, 2001, as amended.

     1.23 “ NDA ” means a New Drug Application filed with the FDA, for approval by such agency for the sale of a pharmaceutical product in the United States pursuant to the Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder, as well as the equivalent in any other country in the Territory. This expressly includes so called “ANDAs” and “505(b)(2)” NDA forms.

     1.24 “ Net Sales ” means the gross amount charged by Schering and its Affiliates and Sublicensees to Third Parties for the sales of Licensed Products in the Territory, less the following deductions to the extent included within the gross sales amounts (determined in accordance with generally accepted accounting principles in the United States), if any:

     (a) [***];

     (b) [***];

     (c) [***]; and

     (d) [***].

Net Sales shall not include sales of Licensed Products between and among Schering and its Affiliates and Sublicensees; provided, however, that Net Sales shall include the amounts invoiced by Schering, its Affiliate or Sublicensee upon any resale of such Licensed Products to a Third Party.

     1.25 “ OTC Product ” means all Formulations, dosages, package sizes and configurations and types of Products for which a prescription from a health care practitioner is not required in order to dispense, purchase or use such Product in the Territory.

     1.26 “ PPI ” means proton pump inhibitor.

     1.27 “ PPI Pharmaceutical Product ” means [***].

     1.28 “ Prescription Product(s) ” means all Formulations, dosages, package sizes and types of Products for which a prescription from a health care practitioner is required in order to dispense, purchase or use such Product in the Territory.

     1.29 “ Product(s) ” means pharmaceutical compositions containing any one or more PPIs in combination with one or more buffering agents, which pharmaceutical compositions provide for immediate release of the PPI included in such product, including (i) any prodrugs and metabolites, and all esters, salts, hydrates, solvates, polymorphs and isomers of any of the above, (ii) chemical analogs, and (iii) Formulations (including tablets, chewable tablets, capsules, caplets, liquid forms and powders for oral suspensions) of any of the above.

     1.30 “ Product Marks ” means the US and non-US trademark registrations and trademark applications and common law rights, in the Territory, in (i) up to five (5) product names selected by Schering on or before November 30, 2006, on written notice to Santarus, from the list of product names set forth in Exhibit A (and corresponding domain names for such selected product names) and (ii) any additional names or marks for identifying the Licensed Products containing the name “Zegerid” in combination with other words or symbols (and/or corresponding domain names) as may be agreed to by the JSC from time to time.

     1.31 “ Product Quality Complaint ” means any written, electronic or oral communication that alleges deficiencies related to the identity, strength, quality or purity of a Product after it is released for commercial use.

     1.32 “ Regulatory Authority ” means a federal, national, multinational, or other regulatory agency or governmental entity involved in the granting of marketing approval for a pharmaceutical product in a country (e.g., the FDA).

     1.33 “ Regulatory Filing ” means any written application, submission, notice or other filing made to an applicable Regulatory Authority in a country in the Territory: (i) seeking Marketing Approval for the commercial manufacture, use, storage, import, export, transport, distribution, marketing or sale of a Product, as well as an Investigational New Drug Application (as defined in the Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder); or (2) that is required to be filed with the FDA before beginning clinical testing of a pharmaceutical product in human subjects; or (3) any successor application or procedure; or (4) non-U.S. equivalents to any of the foregoing; and (5) all supplements and amendments that may be filed with respect to any of the foregoing.

     1.34 “ Santarus Know-How ” means all proprietary materials, ideas, inventions, data, instructions, processes, formulas, expert opinions and information that in each case are disclosed hereunder and both: (a) owned or Controlled by Santarus; and (b) reasonably necessary for practice of the Santarus Patents as licensed to Schering herein and/or the development, testing, use, manufacture or sale of Licensed Products in the Field in the Territory in accordance with this Agreement. Santarus Know-How includes data generated in pre-clinical and clinical studies (including post-approval studies), information contained in Regulatory Filings, communications and correspondence with Regulatory Authorities, and product development and manufacturing data, in each case which relate to Licensed Products in the Field and are reasonably necessary for Schering’s practice of the rights and licenses granted to it hereunder. Santarus Know-How that is Controlled by Santarus through an in-license from a Third Party is included herein to the extent Santarus has rights to such Know-How, and subject to the applicable terms and conditions set forth in the applicable in-license.

     1.35 “ Santarus Marks ” means all US and non-US trademarks, and trademark applications and registrations, in the Territory consisting of the name “Zegerid” and any other trademark or domain name (other than the Product Marks) containing the name “Zegerid,” or a close variant or derivative thereof, alone or in combination with other words or symbols, whether registered or unregistered, and all common law rights, applications and registrations in the foregoing, in each case which are owned or Controlled by Santarus as of the date of this Agreement or during its term. “Santarus Marks” shall also mean such other name or mark as may be used by or under authority of Santarus for Products in the Zegerid line in the event that regulatory or legal action causes Santarus to cease use of the name “Zegerid”

     1.36 “ Santarus Patents ” means: (i) the patents and patent applications listed in Exhibit B , including those in-licensed by Santarus in the Missouri Agreement; and (ii) all additional patent applications and patents owned or Controlled by Santarus in the Territory which are directed to pharmaceutical products containing one or more PPIs with one or more buffering agents and which pharmaceutical products provide for immediate release of the PPI included in such product, except as otherwise provided in Section 6.3.2. With respect to the patents and patent applications described in each of (i) and (ii) above, the term “Santarus Patents” also includes any addition, continuation, continuation-in-part or division thereof or any substitute application therefor; any patent issued with respect to such patent application, any reissue, extension or patent term extension of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent; in each case that is in the Territory. Santarus Patents that are Controlled by Santarus through an in-license from a Third Party are included herein to the extent Santarus has rights to such Santarus Patents, and subject to the applicable terms and conditions set forth in the applicable in-license. With respect to patents and patent applications, if any, within the Santarus Patents that are owned by a Third Party and licensed to Santarus pursuant to a license agreement executed after the Effective Date of this Agreement, such patents and patent applications shall only be included within Santarus Patents, and sublicensed to Schering under this Agreement, if Schering agrees in writing to reimburse

Santarus for all royalties and other amounts that Santarus would be obligated to pay thereunder with respect to Schering’s activities hereunder on account of such sublicense. Notwithstanding the foregoing, “Santarus Patents” shall not include the patents and patent applications indicated as “Excluded Patents” on Exhibit B , or any addition, continuation, continuation-in-part or division thereof or substitute application therefor, or any patent issued with respect to such patent application(s), reissues, extensions or patent term extensions of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent.

     1.37 “ Santarus IP ” means the Santarus Patents, Santarus Know-How and Santarus Marks.

     1.38 “ Schering Incorporated IP ” means Schering Patents and Schering Know-How utilized during the term of this Agreement that are necessary for, or used in, the manufacture, use or sale of, and/or are incorporated into, Licensed Products as manufactured, used or sold by Schering or its Affiliates or Sublicensees, including without limitation clinical, stability and other data concerning such Licensed Products within the Schering Know-How.

     1.39 “ Schering Know-How ” means all proprietary materials, ideas, inventions, data, instructions, processes, formulas, expert opinions and information that in each case are disclosed hereunder and are both: (a) owned or Controlled by Schering or any of its Affiliates; and (b) used in or for Licensed Products in the Territory and are useful for practice of the Schering Patents or for the development, testing, use, manufacture or sale of Prescription Products in the Territory. Schering Know-How includes data generated in pre-clinical and clinical studies (including post-approval studies), information contained in Regulatory Filings, communications and correspondence with Regulatory Authorities, and product development and manufacturing data.

     1.40 “ Schering Marks ” means all US and non-US trademarks, and trademark applications and registrations, other than the Product Marks, in the Territory used in connection with the Licensed Products and any other trademark, trade dress or domain name, other than the Product Marks, used in connection with the Licensed Products including logos, designs, slogans, and graphics, packaging design and trade dress, whether registered or unregistered, and all common law rights, applications and registrations therefore, in each case which are owned or Controlled by Schering as of the date of this Agreement or during its term.

     1.41 “ Schering Patents ” means all patent applications and patents owned or Controlled by Schering or any of its Affiliates as of the date of this Agreement or during its term and claiming compositions of matter, methods of use or methods of manufacture of Licensed Products as developed, manufactured or sold by Schering or its Affiliates or Sublicensees. The term “Schering Patents” also includes any addition, continuation, continuation-in-part or division thereof or any substitute application therefore; any patent issued with respect to such patent application, any reissue, extension or patent term extension of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent. With respect to patents and patent applications, if any, within the Schering Patents that are owned by a Third Party and licensed to Schering pursuant to a license agreement executed after the Effective Date of this Agreement, such patents and patent applications shall only be included within Schering Patents, and sublicensed to Santarus under this Agreement, if Santarus agrees in writing to reimburse Schering for all royalties and other amounts that Schering would be obligated to pay with respect to Santarus’ activities hereunder on account of such sublicense.

     1.42 “ Sublicensee ” means a Third Party to which Schering or its Affiliates have granted a sublicense under the licenses conveyed to Schering under the Santarus IP as set forth in Article 4 to make, have made, use, sell, offer for sale, or import a Licensed Product in the Field in the Territory. As used in this Agreement, Sublicensee shall also include a Third Party to

whom Schering or its Affiliates have granted, directly or indirectly, the right to distribute a Licensed Product, provided that such Third Party has the responsibility for marketing and/or promotion of a Licensed Product within the markets/territory(ies) for which such distribution rights are granted. For the avoidance of doubt, wholesalers, sales brokers and retailers who do not have such responsibilities shall not be deemed to be Sublicensees. Contract manufacturers shall not be deemed to be Sublicensees.

     1.43 “ Territory ” means the United States (including its territories and possessions) and Canada.

     1.44 “ Third Party ” means any entity other than Santarus or Schering or any of their respective Affiliates.

     1.45 “ Valid Claim ” means any claim in an issued and unexpired Santarus Patent that has not been revoked or held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, with such decision being unappealable or unappealed within the time allowed for appeal.

ARTICLE 2
RELATIONSHIP MANAGEMENT

     2.1 Joint Steering Committee . Promptly after the Effective Date, Santarus and Schering shall establish a joint steering committee (“Joint Steering Committee” or “JSC”) with the functions and powers set forth in Section 2.6, below, and such other functions and powers as are expressly set forth in this Agreement or agreed in writing by the Parties. The JSC shall be comprised of three (3) representatives from each of Santarus and Schering, selected by such Party, with each Party designating at least one (1) representative who shall be at the Vice President level or above. Subject to the foregoing provisions of this Section, Santarus and Schering may each replace their JSC representatives at any time, with prior written notice to the other Party. JSC members may be employees of a Party’s Affiliate. Each Party’s initial representatives on the JSC are indicated on Exhibit C .

     2.2 Meetings . Until the later of the third (3 ^rd ) anniversary of the Effective Date and the date of Schering’s first Marketing Approval in the Territory for the first Licensed Product, the JSC shall meet quarterly, and thereafter semi-annually, or at other times agreed to by the Parties, to review and discuss Schering’s manufacturing, development, marketing and other commercialization activities in connection with Licensed Products in the Field (including, without limitation, the planning and performance of clinical trials and planning and preparation of Regulatory Filings), as well as to coordinate manufacturing, development and marketing plans for Licensed Products and Prescription Products bearing the Santarus Marks. The JSC shall meet in person, or in such other manner (e.g., by telephone or videoconference) and at such times as the Parties may mutually agree, provided that at least half the meetings per calendar year take place in person, and such in-person meetings shall alternate between the facilities of the Parties unless the JSC agrees otherwise. Each Party shall inform the other of its proposed agenda items, to the extent reasonably practicable, at least one (1) week in advance of each meeting of the JSC. Each Party shall bear its own personnel, travel, and lodging expenses relating to JSC meetings. Members of the JSC may be represented at any meeting by a designated substitute; provided at least one (1) representative of each Party at each meeting shall be at the Vice President level or above. Either Party may permit additional employees and consultants to attend and participate (on a non-voting basis) in JSC meetings, subject to the confidentiality provisions of Article 8. Any approval, determination or other action agreed to by all of the members of the JSC present at the relevant JSC meeting shall be the approval,

determination or other action of the JSC, provided that at least two representatives of each Party are present at such meeting. Schering and Santarus shall each name a representative on the JSC as its “Co-Chair,” and such persons shall serve as the primary contact for such Party with respect to JSC matters. The meetings of the JSC shall be chaired by the Schering and Santarus Co-Chairs in an alternating manner, beginning with Santarus.

     2.3 Minutes and Reports . The JSC shall be responsible for keeping accurate minutes of its deliberations which record all proposed decisions and all actions recommended or taken. Within ten (10) Business Days of each meeting, the Alliance Coordinator from the same Party that provided the Chair for that JSC meeting shall prepare and distribute to the Parties draft minutes of such meeting, which shall describe in reasonable detail, any issues requiring resolution and any proposed decisions and actions taken, and the Parties shall provide comments to such drafts within ten (10) Business Days after receipt. The minutes and written report shall not be final until agreed to by the Parties’ Co-Chairs. All records of the JSC shall be available to both Parties.

     2.4 Subcommittees .

          2.4.1 General . From time to time, the JSC may establish one or more subcommittees to oversee particular projects or activities related to Licensed Products, and such subcommittees will be constituted as the JSC agrees. The subcommittees shall be responsible to oversee activities and developments within areas delegated to them by the JSC and to make decisions regarding matters within the purview of such subcommittee. The subcommittees shall have no binding decision-making authority unless the JSC expressly delegates decision-making authority regarding specified matters to such subcommittee in writing, in which event decisions of such subcommittee shall be ratified or overruled promptly by the full JSC. The Parties may replace their respective subcommittee representatives at any time, upon prior written notice to the other Party. The subcommittee chairs shall be responsible for preparing the meeting agendas and minutes. Such minutes shall be distributed to the Parties for comment in draft form within ten (10) Business Days following each meeting, which shall describe in reasonable detail any issues requiring resolution and any proposed decisions and actions, and the Parties shall provide comments to such drafts within ten (10) Business Days after receipt thereof. The minutes shall not be final until agreed by both Parties’ representatives on the subcommittee. Final minutes shall be promptly distributed to the Parties. Each Party shall bear its own personnel and travel costs and expenses relating to subcommittee meetings. With the consent of the Parties, other representatives of Santarus or Schering may attend subcommittee meetings as non-voting observers. Any issue within the purview of such a subcommittee that is not settled or determined by the applicable subcommittee shall be submitted to the JSC for resolution. The Chair of each subcommittee shall report on subcommittee efforts at each JSC meeting, and either Party may invite its own representatives on such subcommittee to also report on such efforts.

          2.4.2 Initial Subcommittees . The Parties agree that they initially shall form a Development Subcommittee and a Marketing Subcommittee, each comprised of two (2) members from each Party with expertise and experience in the applicable area. Schering shall chair each of the subcommittees unless the JSC agrees otherwise. Each Party’s initial representatives on the Development Subcommittee and the Marketing Subcommittee are indicated on Exhibit C . The Development Subcommittee shall facilitate communication, coordination and review between the Parties of matters relating to development of Licensed Products and regulatory affairs. Unless the JSC delegates such matters to another subcommittee, the Development Subcommittee shall be responsible to facilitate communication, coordination and review between the Parties of matters relating to manufacture of Licensed Products. The Marketing Subcommittee shall facilitate communication, coordination and review

between the Parties of matters relating to commercialization and marketing of Licensed Products. The subcommittees shall meet no less frequently than the JSC, in advance of each JSC meeting.

     2.5 Decision-Making . Decisions of the JSC shall be made by unanimous vote of the members present in person or by other means (e.g., teleconference) at any meeting. At least two JSC representatives from each Party must participate in a meeting of the JSC in order for there to be a quorum for such meeting. The Parties shall use good faith efforts to reach consensus on all issues requiring a JSC decision. In the event that the members of the JSC cannot reach unanimous agreement on a particular issue requiring their decision within thirty (30) days (or such shorter time as may be reasonably required by the Party whose actions are subject to that decision) after the meeting at which agreement was requested, then the issue shall be referred to Schering’s Chairman (or the acting head) of its Consumer Division and the Chief Executive Officer of Santarus, who shall meet in person or by teleconference in a good faith effort to resolve the dispute within thirty (30) days thereafter (or such shorter time as may be reasonably required by the Party whose actions are subject to that decision). In the event such individuals cannot agree on a resolution of the dispute within such period, the matters described in Section 2.6.3 below shall be finally determined by Schering’s decision, the matters described in Section 2.6.4 below shall be finally determined by Santarus’ decision, and all other matters shall not be subject to a deciding vote by either Party. Notwithstanding the foregoing, in no event shall a Party have the power to exercise its deciding vote pursuant to this Section 2.5 to: (i) obligate the other Party to incur costs in excess of those agreed by such other Party; (ii) obligate the other Party to undertake activities (including without limitation clinical trials) other than those activities agreed to by such other Party; or (iii) to approve matters other than those expressly subject to its deciding vote as set forth in Sections 2.6.3 and 2.6.4.

     2.6 JSC Functions and Powers . The JSC shall be the primary vehicle for interaction and information sharing between the Parties regarding the subject matter of this Agreement, and shall have as its overall purpose the oversight, review and coordination of the various development, commercialization, manufacturing and marketing activities for Licensed Products in the Field by Schering and its Affiliates and Sublicensees, and for consultation and coordination over regulatory matters concerning Licensed Products, and to ensure that such activities permitted under the license to Santarus IP are complementary to, and not in direct conflict with, Santarus’ plans and activities with respect to Prescription Products bearing the Santarus Marks. The JSC also shall function as a forum for the Parties to inform and consult with each other regarding maximizing value of the Product Marks and Santarus Marks for Schering and Santarus, and facilitating communication and cooperation between the Parties regarding Licensed Products, Prescription Products bearing the Santarus Marks, and the rights licensed to each other. The JSC or a subcommittee thereof may also serve as a conduit to discuss coordination of (and if agreed by the Parties facilitate coordination of) supply arrangements of the Parties for active pharmaceutical ingredient, bulk form and/or finished form Licensed Products and Prescription Products bearing the Santarus Marks. Without limiting the foregoing, the JSC shall have the specific responsibilities and decision-making authority as set forth in Sections 2.6.1 through 2.6.4 below, and such other duties and powers as the Parties may agree in writing. The Parties acknowledge that it is their intent not to take or approve (or have the JSC approve) Schering’s exercise of rights under the licensed Santarus IP that could be reasonably likely to reduce the market outside the Field for Prescription Products bearing the Santarus Marks. The Parties acknowledge that it is their intent to act in a manner that benefits both Licensed Products in the Field and Prescription Products, in each case in the Territory and using the Product Marks and/or Santarus Marks, and that lawfully maximizes brand value in the Territory for Product Marks and Santarus Marks licensed hereunder. In the event that the

issues relating to expansion of rights to Schering are no longer a concern for Santarus, the role of the JSC may be reduced by written agreement of the Parties.

          2.6.1 Matters for JSC Approval. The following shall be subject to JSC review and approval:

          (a) Annual written development plans submitted by Schering to the JSC as described in Section 3.1.1 (and material amendments or revisions to the development plans, as may be needed from time to time), which plans shall govern the product, clinical and regulatory development activities for Licensed Products under this Agreement, and related manufacturing activities, and shall include the following matters:

               (i) high-level plans and strategies for clinical development of Licensed Products;

               (ii) high-level regulatory plans and strategies related to Licensed Products;

               (iii) new Formulations of Licensed Products to be developed;

               (iv) Combination Products (if any) to be developed

               (v) applicable manufacturing plans for Licensed Products; and

               (vi) such other matters as the JSC may agree to include regarding product development, clinical development and/or regulatory activities for Licensed Products;

          (b) Annual written marketing plans submitted to the JSC as set forth in Section 3.3.2 (and material amendments or revisions to the marketing plans, as needed from time to time), which plans shall govern the marketing and commercialization of Licensed Products under this Agreement, and related manufacturing activities, and shall include the following matters:

               (i) high-level messaging and brand positioning for Licensed Products;

               (ii) high-level trade dress and packaging concepts, including any use of, and coordination with, Santarus’ copyrighted materials;

               (iii) new Formulations of Licensed Products to be developed;

               (iv) Combination Products (if any) to be developed;

               (v) selection of Product Marks for Licensed Products;

               (vi) to the extent not covered in the development plans, manufacturing plans for commercial supply of Licensed Products; and

               (vii) such other matters as the JSC may agree to include regarding commercialization and marketing of Licensed Products under this Agreement;

          (c) [***];

          (d) Expansion of the rights conveyed to Schering hereunder to include any of the following:

               (i) [***];

               (ii) [***];

               (iii) [***];

               (iv) [***]; and

               (v) [***].

          2.6.2 Oversight and Review. In addition, at each meeting of the JSC, as reasonably requested by either Party’s representatives on the JSC, the JSC will review and monitor Schering’s and its Affiliates’ and Sublicensees’ activities and progress to develop, commercialize, manufacture and market Licensed Products in the Field and Territory and, at a higher level, Santarus’ activities to develop, commercialize, manufacture and market Prescription Products bearing the Santarus Marks outside the Field and in the Territory. The following matters may be reviewed by the JSC, but are not subject to JSC approval so long as they are consistent with the JSC-approved development plan and/or marketing plan, or other JSC approvals as provided by Section 2.6.1 above:

               (a) clinical study protocols for Licensed Products;

               (b) Formulation changes (including without limitation flavors, formats and additional ingredients) for Licensed Products;

               (c) changed or additional Schering Marks to be used with Licensed Products;

               (d) significant packaging and trade dress modifications for the Licensed Products; and

               (e) advertising campaign changes or other marketing adjustments for Licensed Products.

          2.6.3 Schering Day-to-Day Control and Deciding Vote. Schering shall have decision making authority, in its discretion, with respect to [***], provided that such decisions are consistent with the JSC-approved development plan and/or marketing plan, and other decisions of the JSC or applicable subcommittees (within the scope of their authority), and the terms and conditions of this Agreement. In addition, if the JSC does not unanimously agree upon the following matters specified in this Section 2.6.3, and the Parties do not resolve such matters through discussion of senior management as provided in Section 2.5, then Schering shall have the final decision on:

               (a) [***]; and

               (b) [***].

          2.6.4 Santarus Deciding Vote. In the event the JSC does not unanimously agree upon matters specified in this Section 2.6.4, and the Parties do not resolve such matters through discussion of senior management as provided in Section 2.5, then Santarus shall have the final decision with respect to the following matters:

               (a) [***];

               (b) [***];

               (c) [***];

               (d) [***];

               (e) [***];

               (f) [***]; and

               (g) [***].

          2.6.5 JSC Information. Schering shall keep the JSC and relevant subcommittees informed regarding the development, manufacturing, marketing and

commercialization activities pertaining to Licensed Products in the Field in the Territory by Schering and its Affiliates and Sublicensees, through quarterly written reports to the JSC or relevant subcommittees which describe such activities and are of the same scope and same level of detail as that provided to Schering’s consumer health care division executive management (and of comparable scope and level of detail with respect to Affiliates and Sublicensees). In the event that, and at such time as, the JSC does not meet on a quarterly basis, then such reports shall continue to be provided to the Co-Chairs of the JSC with the same frequency and shall contain a similar level of detail as previous presentations to the JSC and shall include such information as Schering presents to its consumer health care division executive management regarding such matters. Each Party shall use commercially reasonable efforts to promptly inform the JSC of information, circumstances or developments of which such Party becomes aware (other than news stories, press releases and other widely available public information) which would reasonably be expected to have, or pose a reasonable likelihood to have, a material adverse impact on the development, manufacturing, regulatory approval, or commercialization of the other Party’s Licensed Products in the Field or Prescription Products in the Territory, as the case may be.

     2.7 Limitation on JSC Authority . Notwithstanding the creation and role of the JSC, each Party shall retain the rights, powers and discretions granted to it hereunder. The JSC shall not be delegated or vested with any such rights, powers or discretion unless expressly provided for herein, and the JSC shall not have the power to make any decisions other than those expressly set forth in Section 2.6 or elsewhere in this Agreement, except as the Parties may otherwise agree in writing. Without limiting the generality of the foregoing, the JSC may not amend or modify this Agreement, which may be amended or modified only as provided in Section 11.6.

     2.8 Alliance Coordinator . The Parties shall each appoint an individual (an “Alliance Coordinator”) to facilitate the operations of the JSC and subcommittees thereof, and to facilitate communications between the Parties with respect to the activities under this Agreement. Each Party’s Alliance Coordinator may attend meetings of the JSC and of subcommittees as a non-voting representative of such Party (unless the individual serving as Alliance Coordinator is also named as a member of the JSC or such subcommittee). Each Party may replace its Alliance Coordinator upon written notice to the other Party. Each Party’s initial Alliance Coordinator is indicated on Exhibit C .

     2.9 Suspension of Santarus Information-Sharing Obligations. In the event that (i) Schering or its Affiliate is actively engaged in developing, seeking Marketing Approval for or marketing a PPI Pharmaceutical Product in or out of the Field in the Territory, (ii) Schering or its Affiliate enters into a definitive agreement to have its OTC business acquired by an entity which is (or whose Affiliate is) actively engaged in developing, seeking Marketing Approval for or marketing a PPI Pharmaceutical Product in or out of the Field in the Territory, and/or (iii) Schering or its Affiliate enters into a definitive agreement to acquire assets or rights related to a PPI Pharmaceutical Product that is under active development, or for which Marketing Approval is being sought, or which is marketed, in or out of the Field in the Territory, then in such event (whether or not such activity or transaction violates Schering’s obligations under Section 4.6) Santarus’ obligations under this Agreement to disclose information through the JSC relating to its Prescription Products bearing the Santarus Marks shall cease; provided, however, that if such circumstance ceases (including without limitation by Schering’s divestiture of either the Licensed Products or the other PPI Pharmaceutical Product(s) pursuant to Section 10.3), then Santarus’ obligations to disclose such information shall thereafter resume. It is understood that the provisions of this Section 2.9 shall not be construed as limiting Schering’s obligations

under Section 4.6 or as a limitation or election of remedies by Santarus in connection with any breach by Schering of Section 4.6.

ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION

     3.1 Product Development .

          3.1.1 Schering Responsibilities . Except as expressly stated otherwise in this Agreement, Schering shall be responsible for conducting all development of Licensed Products in the Field and Territory in accordance with the JSC-approved development plan, and shall bear all costs incurred in conducting such development. Within [***] after the initial meeting with the FDA, Schering will provide to the JSC, for review and approval, a development plan as described in Section 2.6.1(a) (a typical outline is provided at Exhibit E ) and intended to be sufficient to support Regulatory Filing for Marketing Approval of a Licensed Product in the United States in accordance with the schedule in Section 3.7.2. Schering will regularly update (but in no event less frequently than quarterly) the JSC with details of its progress and deviations from plan. Development plans to support Marketing Approval of a Licensed Product in countries in the Territory other than the United States and for subsequent Licensed Products will be similarly presented to the JSC for approval pursuant to Section 2.6.1. Schering agrees to promptly make available to Santarus, at Santarus’ request and expense, copies of all data and Regulatory Filings generated by or for Schering or its Affiliates or Sublicensees in conducting clinical trials and related development and manufacturing of Licensed Products, together with copies of such related reports, analyses, summaries and other information and documents in Schering’s possession or Control that are reasonably necessary for obtaining Marketing Approval of, or otherwise for the commercialization and marketing of, the Prescription Products bearing the Santarus Marks in the Territory. Schering and its Affiliates and Sublicensees shall neither conduct clinical trials of Licensed Products intended to demonstrate efficacy of Licensed Products for, nor submit Regulatory Filings seeking Marketing Approval of Licensed Products for, any Indication other than Licensed Indications.

          3.1.2 Santarus Responsibilities . Santarus, acting through the JSC, agrees to use commercially reasonable efforts to cooperate with Schering through information sharing regarding clinical trials and related development activities for Licensed Products in the Field. Santarus acknowledges that it remains solely responsible for satisfying its own obligations and commitments to Regulatory Authorities in the Territory regarding Prescription Products. Promptly upon Schering’s request, Santarus agrees to make available to Schering, at Schering’s expense, copies of all data and Regulatory Filings generated by or for Santarus in conducting clinical trials and related development and manufacturing of Prescription Products bearing the Santarus Marks for the Territory, together with copies of such reports, analyses, summaries and other information and documents in Santarus’ possession or Control, in each case that are reasonably necessary for obtaining Marketing Approval in the Territory of the Licensed Product hereunder.

          3.1.3 Coordination of Products in Clinical Trials . On the request of either Party, the Parties shall discuss in good faith the possibility of including Schering’s Licensed Products in the clinical trials conducted by Santarus or Santarus’ Prescription Products in the clinical trials conducted by Schering; provided, however, that nothing in this Section 3.1.3 shall be construed to obligate either Party to include the Products of the other Party in its clinical trials.

          3.1.4 Licensed Product Family Expansion . Schering may expand the range of Licensed Products it develops and commercializes in the Field in the Territory to include new

Formulations of Licensed Products, as approved by the JSC (and subject to the applicable deciding votes of Schering or Santarus).

          3.1.5 Reimbursement for Voluntary Assistance . The Parties acknowledge that each Party may, from time to time on the request of the other Party, elect in its discretion to take actions or undertake obligations that such Party is not otherwise obligated to undertake under this Agreement in order to assist the requesting Party in connection with the development, manufacture, regulatory approval, marketing or commercialization of Licensed Products in the Territory and/or corresponding Prescription Products (which may include, by way of example and not limitation, if one Party, at the request of the other, arranges for stability testing of Licensed Products (or similar or identical Prescription Products) for use by the other Party). It is understood and agreed that in such event, the Party requesting such action or undertaking shall reimburse the other Party for out-of-pocket and other reasonable amounts (other than de minimus amounts) incurred in connection therewith, within thirty (30) days of receipt of an invoice therefor. Each Party shall use good faith efforts to apprise the other Party of the existence and estimated magnitude of such expenses to be reimbursed by the other Party reasonably in advance of incurring them.

     3.2 Regulatory Matters .

          3.2.1 Schering Obligations . Subject to applicable JSC approvals and oversight as set forth in Section 2.6 above, Schering shall have the sole responsibility, at its sole expense, and shall satisfy its obligations and commitments to Regulatory Authorities for all regulatory matters concerning Marketing Approvals for Licensed Products in the Field and Territory, including Regulatory Filings, maintenance of Marketing Approvals in the Territory, and all regulatory-related decisions concerning Licensed Products in the Field and Territory, consistent with the provisions of this Agreement. Schering shall provide Santarus at least thirty (30) days advance notice (or, if thirty (30) days advance notice is not possible, such advance notice as is possible under the circumstances) of any meetings between Schering and the FDA relating to Schering’s manufacturing, development, commercialization and/or marketing of Licensed Products, and allow up to two (2) representatives of Santarus to attend any such meetings as observers. Schering shall provide to Santarus copies of material correspondence received by Schering from Regulatory Authorities that relates to the Licensed Products promptly (within ten (10) Business Days following Schering’s receipt thereof), and Schering shall provide Santarus an opportunity to review and comment on the Regulatory Filings and material correspondence with Regulatory Authorities in the Territory prior to submission, and shall consider in good faith and incorporate the comments of Santarus in such Regulatory Filings and correspondence to the extent reasonably acceptable to Schering. Unless the Parties agree otherwise, any Regulatory Filings for Licensed Product in the Field and Territory shall be in the name of Schering, and any resulting Marketing Approvals obtained by Schering shall be owned by Schering.

          3.2.2 Inquiry Regarding Indication at First FDA Meeting . In its first substantive meeting with FDA personnel regarding Licensed Products, and in its communications in advance of such meeting, Schering (or its Affiliate or Sublicensee, as the case may be) shall inquire regarding the approval of the Initial Product for not only the Initial Indication in the Field, but also shall specifically inquire about approval of a label for [***] (the “Milestone Indication”), and shall request a written response (in the form of meeting minutes or otherwise) regarding such matter. [***]. For clarity, nothing in this Section 3.2.2 shall preclude Schering, in its discretion, from raising and addressing in such meeting other matters regarding Licensed Products in the Field, including without limitation, the possibility and likelihood of obtaining approval for any Licensed Indication(s). It is understood and agreed that Schering intends to, and shall diligently endeavor to, prepare and submit draft meeting minutes to the FDA promptly

following such meeting and take such action as may be reasonable to facilitate or encourage FDA’s prompt issuance of the meeting minutes.

          3.2.3 Mutual Obligations . Each Party shall provide the other Party with all available data that is generated by or on behalf of such Party during the term of this Agreement that may facilitate the other Party’s Regulatory Filings and Marketing Approvals concerning Licensed Products under this Agreement or Prescription Products bearing the Santarus Marks in the Territory, as the case may be, which data may include but is not limited to pre-clinical data, including laboratory test data and animal test data, product development and manufacturing data and quality records, including formulation and packaging development data and stability information and clinical data, including clinical studies and protocols, regardless of whether such data are submitted to a Regulatory Authority.

          3.2.4 Reference Rights . Each Party (the “Sponsoring Party”) hereby grants the other Party (the “Referencing Party”) a right of reference to all data and information contained or referenced in those sections of Regulatory Filings for the Sponsoring Party’s (and in the case of Schering, its Affiliates’) Products in the Territory (Licensed Products in the case of Schering, and Prescription Products bearing the Santarus Marks in the case of Santarus) that would be reasonably necessary for the Referencing Party’s Regulatory Filings concerning Licensed Products for Licensed Indications in the Field in the Territory (in the case of Schering as the Referencing Party) or Prescription Products bearing the Santarus Marks in the Territory (in the case of Santarus as the Referencing Party). The Sponsoring Party shall provide the applicable Regulatory Authority a letter confirming this right of reference at any time within fifteen (15) days of the Referencing Party’s request and shall take such other actions and execute such other documents as the Referencing Party may reasonably request to further confirm and give effect to this right of reference. Additionally, the Sponsoring Party agrees that the Referencing Party shall have the right, subject to JSC approval, to add to the Sponsoring Party’s applicable Regulatory Filing in the Territory protocols for clinical trials that may be required for Marketing Approval of (a) a Licensed Product for Licensed Indications in the Field by a Regulatory Authority in the Territory, in the case of Schering as the Referencing Party or (ii) a Prescription Product in the Territory, in the case of Santarus as the Referencing Party.

          3.2.5 Information to JSC; Consultation. Schering shall keep the JSC informed on a quarterly basis regarding regulatory matters relating to Licensed Products, including strategies and progress. Through the JSC, the Parties shall consult with each other regarding regulatory matters that could impact both Licensed Products in the Field and Prescription Products in the Territory, and shall use commercially reasonable efforts to cooperate to resolve such matters, consistent with the terms of this Agreement.

     3.3 Marketing and Sales .

          3.3.1 Marketing Obligations . Subject to the license restrictions in Sections 4.1 and 4.5.1, Schering shall have the exclusive right, and sole responsibility, for marketing, distributing and selling Licensed Products in the Field and Territory, at its sole expense, in accordance with the marketing plan(s) approved by the JSC. Schering will seek to maximize market demand for Licensed Products in the Field and Territory and to fulfill such demand, using efforts consistent with Section 3.7 and other terms of this Agreement, including without limitation the marketing commitment set forth in Section 3.3.3.

          3.3.2 Marketing Plans . Schering will prepare for the JSC’s review and approval an annual marketing plan as set forth in Section 2.6.1(b) (a typical table of contents is provided at Exhibit D), which shall include: (a) a description of strategy and positioning implementation, high level message strategies, and key marketing issues for Licensed Products; (b) a reasonably detailed budget and description of Schering’s planned promotion, marketing, product

positioning and messaging, sales and other key commercialization activities for Licensed Products; (c) Licensed Product distribution strategy in the Field and Territory; and (d) the goals and objectives for Licensed Product market share and sales (including a good faith forecast of its projected sales of Licensed Products for the upcoming three (3) years) in the Field and Territory (the “Schering Marketing Plan”). Schering will provide regular updates (but in no event less frequently than quarterly) to the JSC detailing its progress and deviations from plan. Santarus will prepare its Prescription Product plan providing a high-level overview of its marketing, sales and other commercialization plans with respect to its Prescription Products bearing the Santarus Marks, and which shall address promotion of such Prescription Products to professionals, overall brand positioning, and description of strategy and positioning implementation and key marketing issues with respect to such Prescription Products in the Territory (the “Santarus Marketing Plan”), which will be provided by Santarus to the JSC for informational purposes only and will not be subject to the JSC’s review and approval. No later than November 30th of each calendar year after the Effective Date, each Party shall have submitted its respective Marketing Plan to the JSC, and the JSC will have met to discuss them and to resolve any conflicts or inconsistencies between the two Marketing Plans. It is understood that the responsibility of the JSC with respect to Marketing Plans is intended to provide a coordinating role between the two Marketing Plans and seeking to reach consensus between the Parties, with the objective of maximizing brand value for the Zegerid family of products, while ensuring that such activities are complementary to, and consistent with, Santarus’ activities with respect to Prescription Products in the Territory bearing the Santarus Marks. However, the JSC shall not have authority to require either Party to conduct activities not agreed by such Party or to expend money in excess of the amount stated in its respective Marketing Plan.

          3.3.3 Marketing Commitment . During the twelve (12) month period commencing upon receipt of Marketing Approval in the U.S. for the first Licensed Product, Schering’s Marketing Commitment in the U.S. shall be no less than [***]. In addition, Schering’s Marketing Commitment in the Territory during the subsequent twelve (12) month period shall be no less than an amount equal to [***].

     3.4 Product Supply . Schering intends to source its supply of omeprazole and of Licensed Products in finished form from the same sources as referenced by Santarus in its NDA for the applicable Prescription Product. [***] will take place through the JSC; provided, however, that the JSC shall have no authority to make decisions regarding a Party’s manufacture of Products. In the event that Schering and Santarus use the same manufacturer or supplier with respect to Licensed Products and Prescription Products, [***]. Nothing in this Agreement shall be construed as conveying rights for one Party to use tooling or equipment purchased by the other Party for a manufacturer or as requiring Santarus to share the cost of additional equipment or tooling necessary for a manufacturer to meet increased capacity due to Schering’s use of the same manufacturer as Santarus. In the event that Schering and Santarus use the same manufacturer(s) for Licensed Products and Prescription Products (active pharmaceutical ingredient, bulk form and/or finished product form), [***].

     3.5 Complaints . Schering shall be responsible for all processing of information related to any complaint, including Adverse Events and Product Quality Complaints, related to Licensed Product sold in the Field and Territory under the licenses granted in this Agreement. Schering shall assume all Regulatory Authority reporting obligations under Marketing Approvals for its Licensed Products associated with this Agreement, as required by applicable regulations. Santarus shall remain responsible for all Regulatory Authority reporting obligations for Marketing Approvals associated with its Prescription Products. Prior to the launch of the first Licensed Product in the United States, Santarus and Schering shall prepare and enter into a separate

written pharmacovigilance agreement specifying reasonable and customary terms and conditions for exchange of safety and complaint information. Through that agreement, each Party will agree to share with the other Party relevant information it receives (either directly or indirectly) in a timely manner so as to allow each Party to comply with its responsibility to process and report complaint information under this Section 3.5 (including reporting obligations to Regulatory Authorities). Each Party agrees to cooperate in the investigation and resolution of alleged safety or Product Quality Complaints relevant to Licensed Products and Prescription Products in the Territory. Each Party shall allow reasonable access to its facilities, systems, personnel, and records, in whatever form and in any location (including locations owned and operated by a Third Party), as reasonably necessary to enable each Party to evaluate and ensure compliance with the Adverse Event reporting policies and procedures for the Licensed Products and Prescription Products, as well as compliance with any applicable legal or regulatory requirements applicable or relevant to the Licensed Products or Prescription Products.

     3.6 Recalls . If either Party intends to undertake a recall, correction, removal, field alert, market withdrawal, or other similar notification to users of a Product in any country in the Territory, that Party shall notify the other of its intention prior to taking action, so that such other Party has sufficient opportunity, to the extent reasonably practicable under the circumstances, to discuss and comment on such decisions. Each Party shall notify the other of taking such action within twenty four (24) hours of commencement and shall provide the other Party with a copy of all material related documents. It is understood that each Party shall be responsible, in its discretion, for making decisions about recalls of such Party’s own products.

     3.7 Diligence .

          3.7.1 General Level of Effort. Schering shall use active, sustained, diligent efforts to conduct and complete in a timely manner all activities required to: (i) develop Licensed Products; (ii) receive Marketing Approval in the Territory for Licensed Products; and (iii) market, sell and generate and meet market demand for Licensed Products in the Territory; which efforts all shall be at least the same as its efforts for products with a similar maturity, market potential and potential profitability (determined without taking into account payments under this Agreement).

          3.7.2 Diligence Milestones. Without limiting the generality of the foregoing, Schering shall achieve each of the following milestones (each, a “Diligence Milestone”) on or before the applicable date specified below (subject to any applicable extensions set forth in (a) or (b), below):

               (a)  Extension of Diligence Milestone 3. In the event that Schering does not achieve Diligence Milestone 3 on or before the date indicated above for such Diligence

Milestone (or an extended deadline therefor as set forth in this Section 3.7.2(a)), the time period for achieving such Diligence Milestone shall be extended by [***] if (i) a JSC-approved development plan sets forth a budget for development activities directed to obtaining Marketing Approval in the Territory for Licensed Products for Licensed Indications in the Field (which activities may without limitation include [***] and other clinical studies, if any, as may be required by the FDA), for at least the [***] preceding such deadline and (ii) Schering demonstrates to Santarus that it has spent such amounts for such purposes during such period (the “Milestone 3 Diligence Amount”). The time period for achieving Diligence Milestone 3 may be extended for successive [***] periods if Schering has expended the applicable Milestone 3 Diligence Amount directed to obtaining Marketing Approval in the Territory for Licensed Products for Licensed Indications in the Field within the [***] immediately preceding the expiration of the applicable deadline; provided, however, that the deadline for Milestone 3 shall not be extended hereunder beyond [***].

               (b)  Extension of Diligence Milestone 4. In the event [***], the deadline for achieving Diligence Milestone 4 shall be extended by [***].

          3.7.3 Lack of Diligence.

               (a)  Failure to Fulfill Obligation. In the event that Schering does not fulfill its diligence obligations under this Section 3.7, Santarus shall have the right to terminate this Agreement pursuant to Section 9.2; provided, however, that the thirty (30) day cure period described in Section 9.2 shall not apply with respect to failure to meet the timeframes set forth in Section 3.7.2 above by the applicable deadline (including any applicable extension thereof under Section 3.7.2(a) or (b)). Additionally, Schering shall have a thirty (30) day cure period with respect to failure to achieve Diligence Milestone 4 set forth above by the applicable deadline if such failure is caused by circumstances out of Schering’s reasonable control, provided that, and for so long as, Schering is using diligent, sustained and active efforts to cure such failure throughout such cure period.

               (b)  Decision Not to Pursue. In the event that Schering decides to not obtain Marketing Approval for, or to not launch and commercialize, Licensed Products for Licensed Indications in the Field in the Territory, Schering shall promptly notify Santarus of such decision in writing. Nothing in this Section 3.7.3(b) shall be construed to prejudice Schering’s right to terminate this Agreement pursuant to Section 9.3.

          3.7.4 Reporting. Without limiting the reporting and information-sharing obligations set forth in this Agreement, the Parties acknowledge and agree that the various reports and information to be provided by Schering to Santarus and/or the JSC under this Agreement shall be provided in reasonable detail, sufficient to permit Santarus to determine Schering’s and its Affiliates’ and Sublicenses’ compliance with the diligence requirements under this Section 3.7. Schering shall use reasonable efforts to promptly provide additional information, as Santarus may from time to time reasonably request, to permit Santarus to make such determination.

ARTICLE 4
LICENSES

     4.1 Patent and Know-How License to Schering.

          4.1.1 Patents and Know-How. Subject to the terms and conditions of this Agreement, Santarus agrees to grant and hereby grants to Schering the following licenses, with the right to sublicense (subject to the restrictions of Section 4.2), under the Santarus Patents and Santarus Know-How: (i) an exclusive (even as to Santarus) license in the Territory to develop, import, use, sell and offer for sale Licensed Products for Licensed Indications in the

Field; and (ii) subject to Section 4.1.3, a non-exclusive worldwide license to develop, import, make and have made Licensed Products solely for sale in the Territory in the Field, which license shall be exclusive, even as to Santarus, regarding import and sale of Licensed Products in the Field in the Territory. Unless otherwise approved by the JSC pursuant to Section 2.6 (and in accordance with Santarus’ deciding vote as set forth in Section 2.6.4), it is understood that the scope of this license does not extend to [***].

          4.1.2 Exclusivity for PPI Products. Santarus agrees that, during the term of the Agreement, Santarus shall not, and shall not grant any license under the Santarus Patents, Santarus Know-How or Product Marks to a Third Party to: (i) sell or offer for sale Products in the Field in the Territory, or (ii) develop, make, have made, or import Products for sale in the Field in the Territory.

          4.1.3 Retained Manufacturing Rights. For clarity, it is understood and agreed that, notwithstanding the license to Schering set forth in Section 4.1.1 above and the provision of Section 4.1.2, Santarus shall retain the right under the Santarus Patents and Know-How (but not the Product Marks) to make and have made Licensed Products in the Territory for sale outside the Territory, and to authorize others to do the same.

     4.2 Sublicenses .

          4.2.1 Affiliates. Schering shall have the right to exercise the licenses granted in Sections 4.1 and 4.5 through any one or more of its Affiliates, for as long as such entity remains an Affiliate of Schering.

          4.2.2 Third Parties. Schering may sublicense the rights granted in Sections 4.1 and 4.5 to Third Parties with Santarus’ prior written consent, such consent to be given in Santarus’ discretion. Each sublicense granted by Schering hereunder shall be consistent with the terms and conditions of this Agreement. Schering shall promptly provide Santarus with a copy of the final executed version of each such sublicense agreement, redacted as to financial terms between Schering and such Sublicensee.

          4.2.3 Schering Responsibility. Schering hereby warrants and guarantees the performance of, and compliance with, the obligations set forth in this Agreement by its Affiliates and Sublicensees. Schering shall remain responsible for all other payments and other obligations under this Agreement arising from activities of its Affiliates and Sublicensees.

          4.2.4 Survival. Upon termination of this Agreement: (i) sublicenses granted by Schering to its Affiliates shall concurrently terminate; and (ii) each sublicense granted to Sublicensees shall survive (unless otherwise provided in the applicable sublicense agreement between Schering and such Sublicensee), provided that the applicable Sublicensee agrees in writing to be bound by the payment and other obligations of Schering pursuant to this Agreement.

     4.3 License to Santarus. Subject to the terms and conditions of this Agreement, Schering agrees to grant and hereby grants to Santarus and its Affiliates a [***] (as described below in this Section 4.3) license under the Schering Incorporated IP solely to: [***]. Nothing in this Section 4.3 shall be construed to require Santarus to obtain Schering’s consent to enter into agreements for co-promoting and/or co-marketing Prescription Products, or for the contract development, contract manufacture or contract sales of Prescription Products on behalf of Santarus. [***].

     4.4 Similarity of Products. The Parties acknowledge that the Formulations of one or more Licensed Products may be similar or identical to corresponding Prescription Products in the Territory and/or Products outside the Territory, and agree that: (i) the exclusive license

granted by Santarus pursuant to Section 4.1 shall not be construed to preclude Santarus (or its Affiliates or licensees) from manufacturing, developing and/or commercializing Prescription Products in the Territory or Products outside the Territory (including without limitation the manufacture of non-Prescription Products in the Territory for use or sale outside the Territory) as long as such Products and Prescription Products do not bear the Product Marks; and (ii) the exclusive license granted by Schering pursuant to Section 4.3 shall not be construed to preclude Schering (or its Affiliates or licensees) from manufacturing, developing and/or commercializing Licensed Products pursuant to the license set forth in Section 4.1 (including without limitation the manufacture of Licensed Products outside the Territory for use or sale in the Territory as licensed herein) or, subject to Section 4.6, for exploiting the Schering Incorporated IP worldwide on products outside the Field.

     4.5 Santarus Trademarks .

          4.5.1 License . Subject to the terms and conditions of this Agreement, Santarus hereby grants Schering an exclusive license under the Product Marks (with the right to sublicense, subject to the restrictions of Section 4.2, in conjunction with a permitted sublicense by Schering for Licensed Products under this Agreement), during the term of this Agreement, to use the Product Marks for the development, importation, marketing and promotion of Licensed Products for use and sale within the Field in the Territory. For so long as Schering retains the exclusive license to the Product Marks as set forth herein, Santarus shall not use, and shall not grant any Third Party a license to use, the Product Marks worldwide; provided, however, the foregoing shall not be construed to restrict or limit Santarus’ rights under, and right to license others under, the Santarus Marks with respect to trademarks and other designations (and corresponding domain names) other than the Product Marks. Schering shall not use the Product Marks in connection with the development, importation, marketing or promotion of any pharmaceutical product other than Licensed Products in the Field in the Territory. Unless otherwise approved by the JSC pursuant to Section 2.6 (and in accordance with [***]), it is understood that the scope of this license does not extend to targeted promotion or sale of Products in the Field to healthcare practitioners licensed to prescribe or the Managed Care Market.

          4.5.2 Ownership . Santarus shall own all rights in and to the Santarus Marks and Product Marks worldwide. Schering hereby acknowledges Santarus’ exclusive ownership rights in the Santarus Marks and the Product Marks, and accordingly agrees that at no time during the term of this Agreement will it challenge or assist others to challenge the Santarus Marks or the Product Marks, or the registration thereof, or attempt to register any trademarks, servicemarks or trade names confusingly similar to the Santarus Marks or the Product Marks, or domain names based thereon. All goodwill associated with the Santarus Marks and the Product Marks, and domain names based thereon, shall accrue to Santarus.

          4.5.3 Display . Subject to Regulatory Authority approval, all packaging materials, labels and promotional materials for Licensed Products sold in the Territory shall display one or more Product Marks, and may display such Schering Marks as Schering may choose at its sole discretion; provided, however, that the Product Mark shall be of at least equal size and prominence as the most prominent textual Schering Mark. All Schering Marks shall be owned solely by Schering.

          4.5.4 Standards of Use . All representations of Product Marks that Schering intends to use shall first be submitted to Santarus (through the JSC) for approval (which shall be provided on a timely basis and shall not be unreasonably withheld) of design, color, and other details that comply with Santarus’ applicable usage guidelines as established from time to time and communicated to Schering. Schering shall submit representative packaging materials,