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Agreement Structure
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Price TermsNon-Price Terms
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HazardsUpfrontContingentOngoingAsset DefinitionPerformance RulesPerformance StandardsControl RightsTermination Rights[Redacted][Redacted][Redacted]
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Deal Party EffectsExogenousCustomer Behavior Changes
("Demand Shocks")		Section 8.05: Royalty reduction if Lilly faces stiff competition
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Input Availability Changes
("Supply Shocks")
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Is That a Death Star Up in the Sky?
("Force Majeure" Events)		Section 12.02: Force majeure provision
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Regulatory ApprovalsSection 7.01: Lilly's efforts obligations for pursuing regulatory approvalsSection 8.12: Genentech termination rights if insulin sold without royalties
Section 11.00: Bilateral termination for cause
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Endogenous (Bilateral)Syncing the Dance Partners
("Coordination Problems")		Section 4:01-4.02: Genentech and Lilly Know-How Disclosure Obligations
Section 6:01: Genentech license grant to Lilly
Section 9.00: Foreground IP ownership
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You Aren't Who You Said You Were
("Adverse Selection")		Section 3.00: Upfront payment to Genentech sinks Lilly's investment
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You're Taking Risks, and I Bear the Costs
("Moral Hazard")		Section 3.00: Upfront payment to Genentech sinks Lilly's investmentSection 3.01-3.05: Milestone payments incentivize Genentech's performance
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You're Not Carrying Your Weight
("Shading Performance")		Section 3.01-3.05: Milestone payments incentivize Genentech's performanceSection 8.01: 8% royalty of Lilly net sales paid to GenentechSection 2.00-2.001: Genentech efforts obligations during development
Section 2.01-2.02: Lilly efforts obligations during development
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You're Holding Me Up for a Bigger Slice of the Pie
("Relationship Specific Investment")		Section 3.00: Upfront payment to Genentech sinks Lilly's investmentSection 3.01-3.05: Milestone payments incentivize Genentech's performance
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[Other]
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Social EffectsPositive ExternalitiesOthers Are Riding My Coattails
("Reputational Spillovers")
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Others Are Taking My Ideas
("IP Spillovers")		Section 4:01-4.02: Genentech and Lilly Know-How Disclosure Obligations
Section 6:01: Genentech license grant to Lilly
Section 9.00: Foreground IP ownership		Section 2.03: Bilateral confidentiality commitmentsSection 2.03: Bilateral confidentiality commitments
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Others Are Poaching My Employees
("Agglomeration Effects")
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[Other]
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Negative ExternalitiesYour Balance Sheet Infected
My Balance Sheet
("Financial Contagion")
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Yes the planet got destroyed. But for a
brief moment in time we created a lot of value for shareholders.
("Environmental Harm")
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Employee Welfare
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[Other]
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