1
EXHIBIT 1.1
THE CONFIDENTIAL PORTION OF THIS CONTRACT HAS BEEN OMITTED PURSUANT TO
REGULATION 240.25B-2(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AND HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
RESEARCH, LICENSE, SUPPLY AND ROYALTY AGREEMENT
BETWEEN
SCHERING AKTIENGESELLSCHAFT
AND
RIBOZYME PHARMACEUTICALS INCORPORATED
APRIL 9, 1997
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TABLE OF CONTENTS
Page No.
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Section I DEFINITIONS 2
Section II RESEARCH DILIGENCE; DELIVERABLES 11
Section III COMMERCIALIZATION; OWNERSHIP OF
REGULATORY APPLICATIONS 11
Section IV JOINT RESEARCH COMMITTEE AND
RESEARCH PLAN 13
Section V DESIGNATION LISTING OF SCHERING
SEQUENCES 16
Section VI OWNERSHIP OF TECHNOLOGY; GRANT OF
LICENSES 17
Section VII RESEARCH PAYMENTS AND SECURED LOAN 21
Section VIII MILESTONE PAYMENTS 21
Section IX ROYALTY PAYMENTS; THIRD PARTY
ROYALTIES; CROSS-ROYALTIES 24
Section X MANUFACTURING AND SUPPLY 33
Section XI PAYMENTS 44
Section XII TAX MATTERS 44
Section XIII PATENTS 45
Section XIV CONFIDENTIALITY 52
Section XV REPRESENTATIONS AND WARRANTIES OF RPI 59
Section XVI REPRESENTATIONS AND WARRANTIES OF
SCHERING 60
Section XVII SURVIVAL AND INDEMNIFICATION 60
Section XVIII TERM, TERMINATION, AND EXPIRATION 64
Section XIX MISCELLANEOUS 68
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EXPANDED TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Affiliate
Bonus Royalty
Cech Patents
Change in Control
Clinical Transfer Price
COGS
Control or Controlled
CTI
Designation
Developed Technology
Disclosing Party
Drug Approval Application
Endogenous Ribozyme
Environmental Law
Exogenous Ribozyme
FDA
Field
First Commercial Sale
First Milestone Payment
Gene Target
GLP
Hazardous Materials
IND
Information
Laboratory Notebooks
Live Claim
Manufacturing Term
Milestone Payments
Net Sales
NDA
Non-Ribozyme Product
Phase II Clinical Trials
Pivotal Clinical Trials
Purchase Agreement
[ ] Product
[ ] Technology
Recipient
Regulatory Approval
Research Committee
4
Research Payment
Research Plan
Research Transfer Price
Ribozyme
Ribozyme Product
Ribozyme Technology
Royalty
Royalty Term
RPI Royalty Term
RPI Base Technology
Schering Base Technology
Schering Screens
Schering Sequences
Sublicensees
Term
Third Party
Transfer Price
Validation Period
Worldwide Target
5
ARTICLE II - RESEARCH DILIGENCE; DELIVERABLES
2.1 Diligence
2.2 Number of Scientists
2.3 Laboratory Notebooks
2.4 Deliverables
ARTICLE III - COMMERCIALIZATION; OWNERSHIP OF REGULATORY
APPLICATIONS
3.1 Commercialization
3.2 Ownership of IND and Drug Approval Applications
3.3 No Obligation to Develop Ribozyme Products or Non-Ribozyme Products
3.4 Commercialization Status
ARTICLE IV - JOINT RESEARCH COMMITTEE AND RESEARCH PLAN
4.1 Research Plan
4.2 Changes to the Research Plan
4.3 Establishment of Joint Research Committee
4.4 General Functions
4.5 Decisions
4.6 Visit to Facilities
4.7 Disclosure of Schering Sequences and Schering Screens
4.8 Reports
ARTICLE V - DESIGNATION AND LISTING OF SCHERING SEQUENCES
5.1 Designation and Listing of Schering Sequences
5.2 Rights of RPI
ARTICLE VI - OWNERSHIP OF TECHNOLOGY; GRANT OF LICENSES;
ASSIGNMENT OF RIGHTS TO [ ] AND ITS PATHWAY
6.1 Schering Base Technology
6.2 RPI Base Technology
6.3 Developed Technology
6.4 Ribozyme Products and Non-Ribozyme Products
6.5 Licenses to Schering
6.6 Schering Grant of Non-Exclusive License; Research
6.7 Schering Grant of a Exclusive License to Developed Technology
6.8 Additional RPI Reduction
6.9 Assignment of Contract Rights to [ ]
6.10 [ ] Product
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6.11 Schering Grant of Non-Exclusive License to [ ] Technology
6.12 RPI Payment to Schering for any [ ] Ribozyme Product
ARTICLE VII - RESEARCH PAYMENTS & SECURED LOAN
7.1 Research Payments
7.2 Convertible Loan Note
ARTICLE VIII - MILESTONE PAYMENTS
8.1 Milestone Payments; Ribozyme and Non-Ribozyme Products
8.2 First Milestone
8.3 Product Election
8.4 Milestone Payments; Ribozyme Products
8.5 Milestone Payments; Non-Ribozyme Products
8.6 No Double Milestone Payments
8.7 Milestone Credits
ARTICLE IX - ROYALTY PAYMENTS; THIRD PARTY ROYALTIES; CROSS-
ROYALTIES
9.1 Royalty Term
9.2 Royalties on Ribozyme Products
9.3 Royalties Non-Ribozyme Products
9.4 RPI Payment of Third Party Royalties
9.5 Schering's Right to Procure Third Party Licenses
9.6 Cross Royalties for Ribozyme Products
9.7 Payment of Royalties
9.8 Reports on Net Sales Exclusions
ARTICLE X - MANUFACTURING AND SUPPLY
10.1 RPI Right to Manufacture Exogenous Ribozymes
10.2 Schering Right to Manufacture Ribozymes
10.3 Non-Commercial Research and Clinical Supply
10.4 Commercial Supply
10.5 Condition of RPI Becoming Schering's Worldwide Supplier of Exogenous
Ribozymes Products
10.6 Worldwide Target Defined
10.7 Ordering Generally
10.8 Approval
10.9 Rolling Forecasts
10.10 Quarterly Orders
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10.11 Reports
10.12 Supply Shortfalls; Capacity Planning
10.13 Subcontractors
10.14 Manufacturing Procedures
10.15 Delivery
10.16 Inspection
10.17 Additional Testing
10.18 Right to Review Processes
10.19 Labelling
10.20 Investigation of Complaints
10.21 FDA Regulation of "Ownership"
ARTICLE XI - PAYMENTS
11.1 Payment on Delivery or Completion
11.2 Indigent and Rebate Vials
ARTICLE XII - TAX MATTERS
12.1 Tax Matters
ARTICLE XIII - PATENTS
13.1 Disclosure by Employees, Agents or Independent Contractors
13.2 Patent Prosecution and Related Activities
13.3 Cooperation
13.4 Permitted Disclosures
13.5 Third Party Infringement
13.6 Third Party Infringement; RPI Right
13.7 Infringement Claims by Third Parties
ARTICLE XIV - CONFIDENTIALITY
14.1 Confidentiality
14.2 Publications
ARTICLE XV - REPRESENTATIONS AND WARRANTIES OF RPI
15.1 RPI Represents and Warrants
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ARTICLE XVI - RESEARCH AND WARRANTIES OF SCHERING
16.1 Schering Represents and Warrants
16.2 Disclaimer
ARTICLE XVII - SURVIVAL AND INDEMNIFICATION
17.1 Survival of Representations, Warranties, Covenants, and Agreements
17.2 Indemnification By RPI
17.3 Indemnification By Schering
17.4 Notices, Etc.
17.5 Environmental Indemnification; Permits
17.6 "Environmental Matters"
ARTICLE XVIII - TERM, TERMINATION, AND EXPIRATION
18.1 Term
18.2 Termination
18.3 Effect of Breach or Termination
ARTICLE XIX - MISCELLANEOUS
19.1 Assignment
19.2 Retained Rights
19.3 Consents Not Unreasonably Withheld or Delayed
19.4 Force Majeure
19.5 Further Actions
19.6 No Trademark Rights
19.7 Notices
19.8 Waiver
19.9 Severability
19.10 Ambiguities
19.11 Governing Law
19.12 Headings
19.13 Counterparts
19.14 Entire Agreement: Amendments
19.15 Independent Contractors
19.16 Negation of Agency
19.17 Publicity
19.18 Registration and Filing of the Agreement
19.19 Beneficiaries
19.20 Affiliates of Parties
19.21 Compliance with Laws
19.22 Patent Marking
9
EXHIBITS
1. Purchase Agreement
2. Cost of Goods Sold
4.1 Research Plan
5.1 List of Designated Schering Sequences
15.1(h) List of Excluded Sequences
15.1(j) No Prior Grants
15.1(k) No Sublicense Royalties
15.1(m) List of Third Parties to whom RPI has granted broad pathway
licenses.
10
THIS RESEARCH, LICENSE, SUPPLY AND ROYALTY AGREEMENT (the "Agreement") is made
and entered into as of April 9, 1997, (hereinafter "Effective Date") by and
between Schering Aktiengesellschaft, a German corporation ("Schering") and
Ribozyme Pharmaceuticals Incorporated, a Delaware corporation ("RPI"). Each of
Schering on the one hand and RPI on the other hand, is referred to as a "Party"
and collectively as the "Parties".
WHEREAS, RPI, is the exclusive sublicensee for all uses of technology, patents
and patent applications and improvements to such patents and patent
applications defined herein as the Cech Patents assigned to University of
Colorado Foundation, Inc.;
WHEREAS, RPI is the exclusive licensee from University of Colorado Foundation,
Inc. and from ▇▇▇▇▇▇ ▇▇▇▇, Ph.D. as a consultant to RPI, to all discoveries,
improvements, patent applications and patents arising out of such improvements
to the Cech Patents and has full rights to and wishes to license the Cech
Patents to Schering for certain therapeutic uses.
WHEREAS, RPI has further researched, developed, and has the capacity to
manufacture ribozymes to use in assays to screen for relevant gene sequences;
WHEREAS, Schering has the capacity to research, develop, manufacture and market
pharmaceuticals, including certain skills and experience with respect to
ribozymes;
WHEREAS, Schering and RPI wish to collaborate on the screening of gene
sequences chosen by Schering for the purpose of elucidating gene function;
WHEREAS, Schering Berlin Venture Corporation, a Delaware corporation, an
Affiliate of Schering ("SBVC"), and Schering entered into a Purchase Agreement
(attached as Exhibit 1) with RPI as of the Effective Date; and
NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth in this Agreement, the Parties hereby agree as follows:
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
11
DEFINITIONS
Defined Terms. The following terms when used herein shall have the following
meanings:
"Affiliate" means any company controlled by, controlling, or under common
control with Schering or RPI and shall include any company fifty percent (50%)
or more of whose voting stock or participating profit interest is owned or
controlled, directly or indirectly by Schering or RPI, and any company which
owns or controls, directly or indirectly fifty (50%) percent or more of the
voting stock of Schering or RPI, and any company which Schering or RPI or a
company owned or controlled by or owning or controlling Schering or RPI at the
maximum control or ownership right permitted in the country where the company
exists.
"Bonus Royalty" is defined in Section 9.2.
"Cech Patents" means any invention which is a work product of or relating to
Ribozyme Technology Controlled as of the Effective Date and during the Term by
▇▇▇▇▇▇ ▇▇▇▇, Ph.D., University of Colorado, or University of Colorado
Foundation and the work product of the various collaborations through the Term
of this Agreement among ▇▇▇▇▇▇ ▇▇▇▇, Ph.D., University of Colorado, or
University of Colorado Foundation, United States Biochemical Corporation, RPI
and ▇▇▇▇▇▇ ▇▇▇▇, Ph.D., and also means "RNA Ribozyme Polymerase
Dephosphorylases Restriction Endoribonucleases and Methods", U.S. ▇▇▇. No.
4,987,071; "RNA Polymerase Dephosphorylases Restriction Endoribonucleases and
Methods", U.S. ▇▇▇. No. 5,093,246 (Division of U.S. ▇▇▇. No. 4,987,071); "RNA
Ribozyme Polymerases and Methods", U.S. ▇▇▇. No. 5,037,746 (Continuation-in-
part of U.S. ▇▇▇. No. 4,987,071), and all foreign equivalents, counterparts,
patents and patent applications throughout the world that may issue thereon,
including any extensions, renewals, divisions, continuations, continuations-in-
part, patents of addition and reissues thereof.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), (as such terms are defined in the
Purchase Agreement), of shares representing more than 40% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of RPI; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of RPI by Persons who were neither (i) nominated by the
board of directors of RPI nor (ii) appointed by directors so nominated; or (c)
the acquisition of direct or indirect Control (as defined in the Purchase
Agreement) of RPI by any Person or group.
"Clinical Transfer Price" is defined in Section 10.3.
"COGS" means RPI's costs of supplying Exogenous Ribozymes and Exogenous
Ribozyme Products calculated in accordance with RPI's accounting methods
consistently applied which methodology shall be calculated in compliance with
U.S. generally accepted accounting principles.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
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Expenses include but are not limited to RPI's manufacturing costs as listed in
Exhibit 2. COGS includes idle capacity to the extent that the portion of
facility and equipment which is idle, completed and received Regulatory
Approval for such Exogenous Ribozyme Product.
"Control" or "Controlled" shall refer to possession of the ability to grant a
license or sublicense of patent rights, know-how or other intangible rights as
provided for herein without violating terms of any agreement or other
arrangement with any Third Party.
"CTI" means Competitive Technologies, Inc. with whom that certain exclusive
sublicense agreement effective as of November 20, 1996, was entered into by RPI
concerning the Cech Patents and the Ribozyme Technology.
"Designation" is defined in Section 5.1 and includes "Designated" where
appropriate.
"Developed Technology" means all technology and know-how, including, but not
limited to, patents, patent applications, continuations and continuations-in-
part, divisional and provisional patent applications, trade secrets, methods,
processes, techniques, materials, compositions, information, data, results of
tests or studies and expertise which are used or useful for the research,
development, manufacture, use or sale of products in the Field which are
conceived of and reduced to practice solely in performance of the Research Plan
during the Term either (i) solely by RPI, by a Third Party on RPI's behalf,
jointly by RPI and a Third Party as permitted by this Agreement, or jointly by
Schering and RPI or (ii) solely by Schering if conceived solely in connection
with Schering's performance of the Research Plan; provided however, Developed
Technology does not include any inventions or discoveries arising out of the
use by RPI or Schering of the Schering Screens.
"Disclosing Party" is defined in Section 14.1(a) and in the definition of
"Information".
"Drug Approval Application" means an application for Regulatory Approval
required to be approved before marketing and commercial sale of a Ribozyme
Product or Non-Ribozyme Product in humans as a biologic or a drug in a
regulatory jurisdiction and includes NDA and ELA/PLA for the United States.
"Endogenous Ribozyme" means a Ribozyme expressed inside a cell.
"Environmental Law" means any treaty, law, ordinance regulation or order of any
jurisdiction, relating to environmental matters, including, but not limited to,
matters governing air pollution; water pollution, the use, handling, reporting,
release, storage, transport, or disposal of Hazardous Materials; exposure to or
discharge of Hazardous Materials; occupational safety and health; and public
health.
"Exogenous Ribozyme" means a Ribozyme which has been chemically synthesized
outside a cell.
"FDA" means the United States Food and Drug Administration of the Department of
Health and Human Services, and any successor entities. References herein to
the FDA shall include to the
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
13
extent applicable any comparable foreign regulatory authority that has the
authority to grant full Regulatory Approval.
"Field" means any indication for the diagnosis, cure, mitigation, treatment or
prevention of disease in humans.
"First Commercial Sale" means the date Schering or an Affiliate or a
Sublicensee of Schering first sells commercially, pursuant to Regulatory
Approval, a Ribozyme Product or a Non-Ribozyme Product in the United States,
Japan or any country of the EU, provided that where such a First Commercial
Sale has occurred in a country for which pricing or reimbursement approval is
necessary for widespread sale, then such sale shall not be deemed a First
Commercial Sale until such pricing or reimbursement approval has been obtained.
"First Milestone Payment" is defined in Section 8.2.
"Gene Target" means the full length gene associated with the Designated
Schering Sequence or Ribozyme Product or Non-Ribozyme Product.
"GLP" means the current Good Laboratory Practices promulgated by the FDA,
published in 21 CFR Part 58, as amended from time to time, or equivalent
foreign laws or regulations.
"Hazardous Materials" includes, but is not limited to, any air contaminant,
water pollutant, hazardous material, hazardous waste, hazardous substance,
toxic medical waste, infectious waste, chemicals known to cause cancer or
reproductive toxicity, asbestos and PCB's, as such substances are defined under
any applicable federal, state or local statute, regulation, rule or ordinance.
"IND" means the document filed by Schering pursuant to 21 CFR 312, as such
regulations may be amended with the United States Federal Food and Drug
Administration to test Ribozyme Products and Non-Ribozyme Products in humans or
foreign equivalent.
"Information" means the non-public, proprietary or otherwise confidential
information, specifications, know-how, materials, data and other
communications, oral or written, disclosed or provided to either Party (the
"Recipient") by or on behalf of the other Party (the "Disclosing Party")
pursuant hereto or in connection herewith, together with all portions of
analyses, studies and other documents prepared by or for the benefit of the
Recipient which contain or otherwise reflect any of the foregoing.
"Laboratory Notebooks" means the laboratory notebooks of RPI or Schering
designated specifically and solely for the research conducted pursuant to the
Research Plan.
"Live Claim" means a claim of a pending patent application or of an unexpired
patent included within the RPI Base Technology or the Developed Technology
solely invented by RPI, which has not been held unenforceable, unpatentable or
invalid by a decision of a court, or a governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed to appeal,
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
14
and which has not been admitted to be invalid or unenforceable though re-issue,
re-examination, disclaimer or otherwise.
"Manufacturing Term" is defined in Section 10.1.
"Milestone Payments" is defined in Section 8.1.
"Net Sales" shall be defined as amounts invoiced by a Party, its Affiliates or
Sublicensees from worldwide sales of each Ribozyme Product and Non-Ribozyme
Product to Third Parties, less deductions for: (i) transportation charges,
charges, such as, insurance relating thereto; (ii) sales and excise taxes or
customs duties paid by the selling party and any other governmental charges
imposed upon the sale of the Ribozyme Products and Non-Ribozyme Products; (iii)
distributors fees, rebates or allowances actually granted, allowed or incurred;
(iv) quantity discounts, cash discounts or chargebacks actually granted,
allowed or incurred in the ordinary course of business in connection with the
sale of the Ribozyme Products and Non-Ribozyme Products; (v) allowances or
credits to customers, not in excess of the selling price of the Ribozyme
Products and Non-Ribozyme Products, on account of governmental requirements,
rejection, outdating, recalls or return of the Ribozyme Products and Non-
Ribozyme Products; (vi) costs of customer programs such as patient assistance
programs designed to aid in patient compliance to maintain medication schedules
and (vii) an estimate for bad debts based on historical data for each Royalty
period. For the purpose of calculating a Party's Net Sales, the Parties
recognize that (a) a Party's customer may include persons in the chain of
commerce who enter into agreements with a Party as to price even though title
to the Ribozyme Product and Non-Ribozyme Product does not pass directly from a
Party to such customers, and even though payment for such Ribozyme Product and
Non-Ribozyme Product is not made by such customers directly to a Party and (b)
in such cases charge backs paid by a Party to or through a Third Party (such as
a wholesaler) can be deducted by a Party from gross revenue in order to
calculate a Party's Net Sales. Any deductions listed above which involve a
payment by a Party shall be taken as a deduction against aggregate sales for
the Royalty period in which the payment is made. Sales of the Ribozyme
Products and Non-Ribozyme Products between a Party and its Affiliate solely for
the research or clinical testing purposes shall be excluded from the
computation of Net Sales.
"NDA" means a new drug application or foreign equivalent filed with the FDA
pursuant to 21 CFR 200, or foreign equivalent as such regulations may be
amended for approval by such agency for the sale of Ribozyme Product or Non-
Ribozyme Product in the United States. References herein to NDA shall include,
to the extent applicable, any ELA/PLA, and any Drug Approval Application.
"Non-Ribozyme Product" means any substance in the Field that (i) is sold
commercially, (ii) is not a Ribozyme Product, (iii) was researched pursuant to
the Research Plan, (iv) arose out of a Designated Schering Sequence Designated
pursuant to Section 5.1, and (v) for which a First Milestone Payment was made
pursuant to Section 8.2.
"Phase II Clinical Trials" means the second phase of human clinical trials of a
Ribozyme Product or a Non-Ribozyme product to gain evidence of effectiveness in
the target population as described in 21 CFR 211 et seq.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
15
"Pivotal Clinical Trials" means clinical trials which when completed will have
demonstrated that the Ribozyme Product(s) and Non-Ribozyme Product(s) (i) are
safe and efficacious, (ii) have an established dose, (iii) have an established
route of administration and (iv) have a treatment schedule in the target
population, all sufficient for the purpose of supporting a Drug Approval
Application.
"Purchase Agreement" means the Purchase Agreement dated as of the date hereof
between Schering, Schering Berlin Venture Corporation and RPI which shall be
substantially in the form attached as Exhibit 1 or in such other form as the
Parties thereto may agree, as such agreement from time to time may be amended,
supplemented or otherwise modified in accordance with its terms.
[ ] is defined in Section 6.10.
[ ] is defined in Section 6.9.
"Recipient" is defined in Section 14.1(a) and in the definition of
"Information".
"Regulatory Approval" means any approvals, product and/or establishment
licenses, registrations or authorizations of any federal, state or local
regulatory agency, department, bureau or other governmental entity, necessary
for the manufacture, use, storage, importation, export, transport, or sale of
Ribozyme Products and Non-Ribozyme Products in a regulatory jurisdiction.
"Research Committee" is defined in Section 4.3.
"Research Payments" is defined in Section 7.1.
"Research Plan" means a written plan agreed to by Schering and RPI which
outlines the joint effort of the Parties in conducting research for the
screening of Schering Sequences for the purpose of Designating Schering
Sequences and validating Ribozymes for targets. The initial Research Plan is
attached as Exhibit 4.1.
"Research Transfer Price" is defined in Section 10.3.
"Ribozyme" means a ribonucleic acid based molecule able to cause catalytic
cleavage of itself or another molecule independent of protein.
"Ribozyme Product" means any substances in the Field that (i) are sold
commercially, (ii) contain Exogenous or Endogenous Ribozyme, (iii) were
researched pursuant to the Research Plan, (iv) target a Schering Sequence
Designated pursuant to Section 5.1, and (v) for which a First Milestone Payment
was made pursuant to Section 8.2.
"Ribozyme Technology" means all inventions, improvements or other developments
relating to Ribozymes, including the identification, manufacture, synthesis,
delivery, use, enhancement and control of Ribozymes conceived or reduced to
practice by ▇▇▇▇▇▇ ▇▇▇▇, Ph.D., or others who are
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
16
employed at the University of Colorado or which is Controlled by the University
of Colorado or by RPI, University of Colorado Foundation, United States
Biochemical Corporation, and CTI.
"Royalty" is defined in Section 9.2.
"Royalty Term" is defined in Section 9.1(b) and (c).
"RPI Base Technology" means all technology and know-how, including, but not
limited to, patents, patent applications, continuations and continuations-in-
part, divisional and provisional patent applications, trade secrets, methods,
processes, techniques, materials, compositions, information, data, results of
tests or studies and expertise which are used or useful for the research,
development, manufacture, use or sale of products in the Field that may arise
from or are related to the Research Plan or in conducting research and
development pursuant to this Agreement which: (a) are under the Control of RPI
as of the Effective Date, including but not limited to the technology disclosed
in the Cech Patents and Ribozyme Technology; (b) are invented, developed,
acquired or otherwise comes within the Control of RPI after the Effective Date
within the Term which RPI can demonstrate does not constitute Developed
Technology.
"RPI Royalty Term" is defined in Section 9.6.
"Schering Base Technology" means (a) all technology and know-how, including but
not limited to patents, patent applications, continuations and continuations-
in-part, divisional and provisional applications, trade secrets, methods,
processes, techniques, products, materials, compositions, Schering Sequences,
Schering Screens, equipment, information, data, results of tests or studies and
expertise Controlled by Schering, which is used in conducting research pursuant
to the Research Plan, and (b) all technology and know-how, of the kind
described in (a) above, invented, developed or acquired without RPI's
intellectual contribution which is conceived and reduced to practice during the
Term and which is not Developed Technology which is controlled by Schering
during the Term and which is used in conducting research pursuant to the
Research Plan.
"Schering Screens" means the technology Controlled by Schering concerning the
use of Endogenous and Exogenous Ribozymes, retrovirus vectors, human carcinoma
cells and any other Schering assay systems for use to determine the function of
Schering Sequences.
"Schering Sequences" means nucleotide sequences selected by Schering for
conducting research pursuant to the Research Plan.
"Sublicensees" means, with respect to Ribozyme Products and Non-Ribozyme
Products, a Third Party to whom Schering or RPI has granted a sublicense under
this Agreement to make, have made, use or sell, import or offer to import such
Ribozyme and Non-Ribozyme Products.
"Term" is defined in Section 18.1.
"Third Party" means an entity other than Schering, RPI or any of their
respective Affiliates.
"Transfer Price" is defined in Section 10.4.
"Worldwide Target" is defined in Section 10.6.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
17
II
RESEARCH DILIGENCE; DELIVERABLES
2.1 Diligence. The Parties hereto agree to diligently conduct research
pursuant to the Research Plan.
2.2 Number of Scientists. Schering is making the payments described in
Section VII based on the requirement that RPI shall provide an average
of eight (8) full-time research positions, to conduct research pursuant
to the Research Plan in each year of the Term, and RPI agrees to provide
eight (8) full-time research positions for this purpose. These eight
individual positions shall include only scientists performing research
at the laboratory bench.
2.3 Laboratory Notebooks. Upon the request of a Party, the other Party will
provide copies of its Laboratory Notebooks.
2.4 Deliverables. Schering will provide Schering Sequences, and RPI will
construct Exogenous Ribozymes and assay Ribozymes. RPI will provide
Exogenous Ribozymes to Schering and all assay results. Schering and RPI
will use Ribozymes for high capacity screening to find targets. The
number of Exogenous Ribozymes to be manufactured by RPI and the specific
duties with respect to assays shall be stated in the Research Plan.
III
COMMERCIALIZATION; OWNERSHIP OF
REGULATORY APPLICATIONS
3.1 Commercialization. Schering is solely responsible for the preparation
and filing of all Drug Approval Applications and all activities
necessary for such Drug Approval Applications relating to the
manufacture, marketing and sale of the Ribozyme Products and Non-
Ribozyme Products. Such Drug Approval Applications will be filed in the
name of Schering. With respect to such activities, Schering will use
due diligence in product development in accordance with international
pharmaceutical industry standards using commercially reasonable efforts
in an attempt to commercialize Ribozyme Products and Non-Ribozyme
Products.
3.2 Ownership of IND and Drug Approval Applications. Schering owns the
regulatory submissions including all IND's and Drug Approval
Applications for all Ribozyme Products and Non-Ribozyme Products.
3.3 No Obligation to Develop Ribozyme Products or Non-Ribozyme Products.
With respect to any Ribozyme Products or Non-Ribozyme Products, and
except as provided in Section 3.4, RPI agrees that Schering (i) is not
under any obligation to obtain an approval or consents to market, or any
other consent or approval from any Regulatory Authority, or to reach
particular Net Sales thresholds, (ii) shall not be prohibited from
withdrawing any such
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
18
Ribozyme Products or Non-Ribozyme Products from the market for any
reason, and (iii) shall not have any liability to RPI if any such
consents or approvals are not obtained or are withdrawn, or if obtaining
or reaching the same may be delayed.
3.4 Commercialization Status. If Schering is developing a Ribozyme Product
or Non-Ribozyme Product, for the period from the end of the Term to the
First Commercial Sale of a Ribozyme Product or Non-Ribozyme Product, or
at such time Schering makes the decision to stop development of such
Ribozyme Product or Non-Ribozyme Product, Schering shall keep RPI
informed of its development activities with respect to Ribozyme Product
or Non-Ribozyme Product, including without limitation, the
commercialization of Ribozyme Product or Non-Ribozyme Product, by semi-
annually providing RPI with a written report stating the status of
development of each such Ribozyme Product or Non-Ribozyme Product.
Schering shall notify RPI of the achievement of Milestones within thirty
(30) days thereof and shall promptly inform RPI when Schering terminates
development or commercialization of a Ribozyme Product or Non-Ribozyme
Product.
IV
JOINT RESEARCH COMMITTEE AND RESEARCH PLAN
4.1 Research Plan. The Research Plan shall detail the research activities
to be undertaken by the Parties, shall set forth the personnel
commitments of RPI and shall account for how the payments made by
Schering pursuant to Section VII shall be spent. The Research Plan
shall require that both Parties will provide the Research Committee with
quarterly written reports describing and reporting the research done
pursuant to the Research Plan and RPI will account for the funds spent
on the research. The initial Research Plan, attached as Exhibit 4.1,
has been finalized by the Parties and adopted on the Effective Date.
The Parties recognize that initially the number of Schering Sequences
screened may be limited by RPI's capacity to manufacture and deliver
Exogenous Ribozymes and by the Parties' capacity to conduct assays.
4.2 Changes to the Research Plan. The Parties may change the Research Plan
at any time by mutual written agreement by the Parties.
4.3 Establishment of Joint Research Committee. The Parties will form a
joint research committee (the "Research Committee") to be in existence
during the Term to coordinate certain activities under this Agreement as
set forth below. The Research Committee shall have an equal number of
members from each Party. Regardless of the number of individuals on the
Research Committee, each Party shall have only one vote.
4.4 General Functions. The functions of the Research Committee shall be to:
(a) oversee the scope of work done by RPI pursuant to the
Research Plan;
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
19
(b) prepare for and coordinate research and manpower
commitments of RPI pursuant to the Research Plan;
(c) engage in exchanges of information and joint planning
activities and review quarterly written reports on the status of
the research performed by RPI pursuant to the Research Plan;
(d) set criteria for defining successful results of screening
of Schering Sequences including whether the First Milestone has
been met;
(e) notify the Parties of inventions arising out of research
conducted pursuant to the Research Plan; and
(f) set time and place for meetings of the Research Committee
which shall be at least quarterly or as agreed and alternate such
meetings between Richmond, California and Boulder, Colorado.
4.5 Decisions. (a) All changes to the Research Plan must be in writing and
signed by the Parties. All non-material administrative matters of the
Research Plan are the prerogative of the Research Committee. All
administrative decisions to be made under the Research Plan or decisions
referred to the Research Committee in writing by the mutual agreement of
the Parties will be made by unanimous agreement of the Research
Committee, and, if the Research Committee cannot reach agreement on any
matter, it shall be referred to (i) the Vice President, Head of
Discovery Research for Berlex Biosciences, a division of Berlex
Laboratories, Inc., an Affiliate of Schering and Vice President of
Research for RPI to attempt to reach an agreement, and if they cannot
agree, (ii) then to the President of Berlex Biosciences, a division of
Berlex Laboratories, Inc., an Affiliate of Schering and the President of
RPI, (iii) if the President of Berlex Biosciences and the President of
RPI cannot resolve the matter, then to the Chairman of Berlex
Laboratories, Inc. an Affiliate of Schering and the Chairman of RPI,
(iv) if the Chairman of Berlex and the Chairman of RPI cannot resolve
the matter either Party may terminate this Agreement pursuant to Section
18.2 (c). (b) A non-unanimous vote of the Research Committee concerning
whether the First Milestone has been met is considered a non-decision by
the Research Committee until the earliest of (i) a unanimous agreement
by the Research Committee, (ii) Schering's notification to RPI that it
will pay the First Milestone Payment on such Ribozyme or Non-Ribozyme
Product or (iii) ninety (90) days after RPI provides Schering and the
Research Committee with a written notice which states reasons and data
why RPI believes the First Milestone has been met if Schering then
agrees to make such First Milestone Payment. If Schering does not agree
to make such First Milestone Payment pursuant to Section 4.5(b)(iii),
then RPI and Schering may refer such matter through the steps provided
in Section 4.5(a)(i) through (iv).
4.6 Visit to Facilities. Representatives of each Party may, upon reasonable
notice and at times reasonably acceptable to the other Party, (i) visit
the facilities where the Research Plan is
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
20
being conducted, and (ii) consult informally, during such visits and by
telephone, with personnel of the other Party performing work on the
Research Plan. If requested by the other Party, Schering and RPI shall
cause appropriate individuals working on the Research Plan to be
available for meetings at the facilities where such individuals are
employed at times reasonably convenient to the Party responding to such
request.
4.7 Disclosure of Schering Sequences and Schering Screens. During the Term,
Schering may disclose Schering Sequences and Schering Screens to RPI,
solely for the purpose of conducting research pursuant to the Research
Plan.
4.8 Reports. Each Party shall maintain records in sufficient detail and in
good scientific manner appropriate for patent and Regulatory Authority
purposes and so as to properly reflect all work done and results
achieved in the performance of this Agreement. Such records shall
include books, records, reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs, computer
programs and documentation thereof, samples of materials and other
graphic or written data generated by RPI in connection with the Research
Plan, including any data required to be maintained pursuant to
applicable governmental regulations. During the Term each Party shall
respond to reasonable requests from the other Party for information
based on data generated by RPI pursuant to the Research Plan.
V
DESIGNATION AND LISTING OF SCHERING SEQUENCES
5.1 Designation and Listing of Schering Sequences. From time-to-time during
the Term, Schering will propose Schering Sequences by written notice to
the Research Committee, which specifically describes the Schering
Sequence being proposed ("Designation"). If RPI has not previously
granted a license to a Third Party that would prohibit RPI from granting
Schering the licenses contemplated by Section 6.5(b) and 6.5(c) for such
Schering Sequence or, unless within fifteen (15) business days from the
receipt of such notification by Schering, RPI notifies Schering in
writing that it has undertaken a substantial internal program with
respect to such Schering Sequence as clearly and convincingly
demonstrated in RPI's prior existing written records, such Schering
Sequence will become a Designated Schering Sequence and will be listed
on Exhibit 5.1. Such Designated Schering Sequence will be added to
Exhibit 5.1 hereto provided that there may be no more than [ ]
Designated Schering Sequences at any one time. Until Schering notifies
RPI it wishes to replace a particular Designated Schering Sequence with
another Schering Sequence, RPI shall not grant any licenses to Third
Parties, or take any action itself or with or on behalf of Third Parties
that would conflict with or be inconsistent with the exclusive licenses
granted in Section 6.5(b) and (c) with respect to such Designated
Schering Sequences. Schering may Designate no more than [ ] different
Designated Schering Sequences during the Term. At any time, pursuant to
this Section 5.1, Schering may change the Designated Schering Sequences
listed in Exhibit 5.1 by replacing a particular Designated Schering
Sequence with another Designated Schering Sequence or by removing and
abandoning a Designated
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
21
Schering Sequence upon written notice to RPI. In addition, a Designated
Schering Sequence shall be removed from Exhibit 5.1 after Schering has
made the product election provided for in Section 8.3 unless Schering
elects to maintain such Designated Schering Sequence for a possible
future Ribozyme Product against such Designated Schering Sequence as
provided in Section 8.3.
5.2 Rights of RPI. Subject to Section 6.8, RPI shall have the right to
research, develop, make, have made, and sell products, and to license
Third Parties to research, develop, make, have made and sell products,
directed against Schering Sequences unless such Schering Sequence is at
that time a Designated Schering Sequence or there is a Ribozyme Product
then being developed, or sold by Schering directed against such Schering
Sequence.
VI
OWNERSHIP OF TECHNOLOGY; GRANT OF LICENSES; ASSIGNMENT
OF RIGHTS TO [ ] FOR [ ]
6.1 Schering Base Technology. Schering owns all rights in Schering Base
Technology.
6.2 RPI Base Technology. RPI owns all rights in RPI Base Technology.
6.3 Developed Technology. Schering owns all of Schering solely invented
Developed Technology and an undivided one-half interest In jointly
invented Developed Technology, and RPI owns all RPI solely invented
Developed Technology and an undivided one-half interest in jointly
invented Developed Technology. Inventorship is determined by United
States patent law.
6.4 Ribozyme Products and Non-Ribozyme Products. Subject to this Agreement,
specifically Section 6.6, Schering owns all Ribozyme Products and Non-
Ribozyme Products.
6.5 Licenses to Schering. RPI hereby agrees to grant and hereby grants, the
following licenses to Schering:
(a) [ ] the RPI Base Technology and Developed Technology owned
by RPI, to make and use Ribozymes during the Term;
(b) [ ] under the RPI Base Technology and by RPI, to make, have
made (except as provided in Section 6.5 (d) below), and use
Endogenous, and Exogenous Ribozymes with respect to Designated
Schering Sequences pursuant to the Research Plan;
(c) [ ] under the RPI Base Technology and Developed Technology
owned by RPI to make, have made, (except as provided in Section
6.5(d) below), use, sell, offer to sell and import Ribozyme
Products and Non-Ribozyme Products;
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
22
(d) subject to Section X "Manufacturing", RPI reserves the
right to make, and to have made Exogenous Ribozymes for use
pursuant to the Research Plan and Exogenous Ribozyme Products
solely for Schering, its Affiliates, or its Sublicensees.
6.6 Schering Grant of [ ]; Research. Subject to this Agreement, and solely
for purposes of conducting research pursuant to the Research Plan,
during the Term, Schering grants RPI a [ ], in the United States, [ ],
to all its rights in Developed Technology and Schering Base Technology
necessary for the conduct of such research; provided however, RPI may
request that it be able to use certain Developed Technology, whether
owned by RPI or Schering, as positive controls in research RPI is
conducting with Third Parties. It shall be in Schering's sole
discretion whether and to what extent to grant such permissions which
shall not be unreasonably withheld.
6.7 Schering Grant of an [ ] to Developed Technology. Schering grants to
RPI [ ] on a country-by-country basis to Developed Technology to make,
have made, use, sell, offer to sell, and import any Ribozyme or Non-
Ribozyme Product upon which Schering terminates development or
commercialization as provided in Section 3.3, 3.4 or 9.6 and products
against former Designated Schering Sequences which have been removed
from Exhibit 5.1 pursuant to Section 5.1 hereof and a nonexclusive right
to refer to data in Schering's regulatory filings for such Ribozyme or
Non-Ribozyme Product.
6.8 Additional RPI Restrictions. RPI understands that an important basis
for Schering to enter into this Agreement and a Purchase Agreement is
the right to exploit Developed Technology and not be blocked by licenses
granted now or in the future by RPI to Third Parties; therefore, (a) as
of the Effective Date, RPI intends not to enter into any agreement or
arrangements with Third Parties or grant any licenses to any Third Party
with respect to the RPI Base Technology at a time that would provide
rights to Third Parties in the making, using, selling, offering to sell
or importing Ribozymes for broad use in pathways that could be common
intermediary biochemical pathways which are common to present or future
Designated Schering Sequences listed on Exhibit 5.1 at that time; (b)
RPI has granted licenses to a Third Party with respect to RPI Base
Technology that provides such Third Party broad pathway rights or
physically contiguous rights that could be or are in common intermediary
biochemical pathways which are common to or the same as present to
future Designated Schering Sequences or Ribozyme Products. RPI
represents that it is attempting to renegotiate such broad pathway
license with such Third Party. (c) If RPI does grant such license
referred to in Section 6.8 (a), it will notify such Third Parties that
it has granted certain licenses to Schering with respect to Designated
Schering Sequences and Ribozyme and Non-Ribozyme Products that will be
excluded from such licenses to such Third Parties.
6.9 Assignment of Contract Rights to [ ]. RPI hereby hires Schering to
conduct research, development and clinical trials of a [ ] for [ ] at
Schering's sole cost and sole discretion. If Schering does proceed to
conduct clinical trials on a [ ] its duties and rights are governed by
RPI's rights in the agreement between RPI and [ ] dated [ ]. RPI agrees
that any technology
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
23
created, invented or developed by Schering pursuant to such research,
development and clinical trials [ ] shall be owned by Schering subject to
the license grant in Section 6.11.
6.10 [ ] means the Endogenous Ribozyme Product mutually agreed to by the
Parties which Schering develops through Phase II clinical trials.
6.11 Schering Grant of [ ]. Subject to this Agreement, Schering grants RPI a
[ ] to all its rights in the [ ] to make, have made, use, sell, offer to
sell and import any [ ] and any Endogenous Ribozyme product directed to
any gene found in the [ ] either solely or in conjunction with [ ]
pursuant to the [ ] or any RPI agreements with [ ]
6.12 RPI Payments to Schering for any [ ] Ribozyme Product. If Schering
researches, develops and conducts clinical testing through Phase II
clinical trials of the [ ] then RPI will pay Schering [ ] of all profits
it receives on the [ ] for [ ] and [ ] of all profits on all present and
future Endogenous Ribozyme products directed towards the [ ] that are
sold pursuant to the [ ] or any RPI agreements with [ ] Provided
however, if RPI does not receive payments and in lieu receives other
value RPI shall provide [ ] of the profits related to such value to
Schering.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
24
VII
RESEARCH PAYMENTS AND SECURED LOAN
7.1 Research Payments.
(a) Subject to the terms and conditions of this Agreement, and
due diligence and good faith efforts of RPI in meeting the goals
of the Research Plan, Schering shall pay RPI US$2,000,000
("Research Payments") per year of the Term at the rate of
US$500,000 at the beginning of each quarter.
(b) Except for the last quarter of the Term, Research Payments
shall be made quarterly at the beginning of each quarter. The
last quarterly Research Payment shall be made thirty (30) days
after receipt by Schering of the final written research report
from RPI.
7.2 Convertible Loan Note. As of the Effective Date Schering will loan
funds to RPI pursuant to Exhibit 1 attached to this Agreement.
VIII
MILESTONE PAYMENTS
8.1 Milestone Payments; Ribozyme and Non-Ribozyme Products. Subject to this
Agreement, Schering shall make milestone payments on each Ribozyme and
Non-Ribozyme Product as stated below ("Milestone Payments"). No
Milestone Payments shall be made on any [ ] Milestone Payments are met
and paid only once for each Ribozyme and Non-Ribozyme Product regardless
(i) if the Milestone is met more than once in different countries, and
(ii) if the same Ribozyme or Non-Ribozyme Product is used for different
indications which requires separate regulatory filings and separate and
distinct Regulatory Approvals. Except for the First Milestone Payment,
if Milestone Payments are made on a Ribozyme or Non-Ribozyme Product and
such Ribozyme or Non-Ribozyme Product does not reach the point of First
Commercial Sale, then Schering shall have a credit for the total of
Milestone Payments applied to any subsequent Milestone Payments due on
any Ribozyme or Non-Ribozyme Product directed to the same Gene Target as
the Ribozyme or Non-Ribozyme Product that did not reach First Commercial
Sale. Furthermore, pursuant to the Purchase Agreement as of the
Effective Date, Schering may offset any Milestone Payment except for the
First Milestone Payment as provided in the Purchase Agreement.
8.2 First Milestone. Schering shall pay RPI US [ ] upon completion of a
relevant animal efficacy model, as discussed by the Research Committee,
that in the unanimous opinion of the Research Committee demonstrates
that a particular Ribozyme (i) will most likely be a Ribozyme Product
with efficacy in man with an acceptable, appropriate therapeutic ratio
or (ii) provides sufficient information to enable Schering to design and
conduct the research
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
25
and development of a Non-Ribozyme Product with efficacy in man with an
acceptable, appropriate therapeutic ratio ("First Milestone Payment").
8.3 Product Election. Prior to the initiation of GLP toxicity studies for
an IND, Schering will send RPI written notice stating whether it will
proceed with a Ribozyme Product or Non-Ribozyme Product. If Schering
elects a Non-Ribozyme Product, RPI will have the right to research and
develop a Ribozyme Product directed at the same sequence as the Schering
Non-Ribozyme Product subject to negotiating licenses from Schering to
Schering Base Technology unless Schering agrees to pay for such Non-
Ribozyme Products the amount of Milestones provided for in Section 8.4
rather than Section 8.5 notwithstanding that it is a Non-Ribozyme
Product and maintains the Schering Sequence. In such event, RPI shall
not develop a Ribozyme Product directed against such Schering Sequence
as long as such Schering Sequence is a Designated Schering Sequence. If
Schering elects to proceed with a Ribozyme Product, RPI may not research
or develop a Non-Ribozyme Product directed at the same Schering Sequence
as the Schering Ribozyme Product.
8.4 Milestone Payments for Ribozyme Products. Subject to this Agreement,
Schering shall make additional Milestone Payments on each Ribozyme
Product as stated below:
(a) [ ] upon initiation of GLP toxicity studies for an IND;
(b) [ ] upon IND or equivalent acceptance by a Regulatory
Authority;
(c) [ ] upon initiation of Phase II Clinical Trials;
(d) [ ] upon successful completion of Pivotal Clinical Trials;
(e) [ ] upon Regulatory Approval; and
(f) [ ] upon First Commercial Sale.
8.5 Milestone Payments; Non-Ribozyme Products. Subject to this Agreement,
Schering shall make additional Milestone Payments on each Non-Ribozyme
Product as stated below:
(a) [ ] upon initiation of GLP toxicity studies for an IND;
(b) [ ] upon IND or equivalent acceptance by a Regulatory
Authority;
(c) [ ] upon initiation of Phase II Clinical Trials;
(d) [ ] upon successful completion of Pivotal Clinical Trials;
(e) [ ] upon Regulatory Approval; and
(f) [ ] upon First Commercial Sale.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
26
8.6 No Double Milestone Payments. Schering shall pay Milestone Payments once
per final Ribozyme or Non-Ribozyme Product. If Schering pays Milestone
Payments for a Ribozyme Product or a Non-Ribozyme Product and then
develops and sells a Non-Ribozyme Product or a Ribozyme Product for the
same clinical indications as the Ribozyme Product, or Non-Ribozyme
Product, Schering is not obligated to pay a second set of Milestone
Payments.
8.7 Milestone Credits. If a Non-Ribozyme Product is developed first
followed by a Ribozyme Product against the same Gene Target, Schering
will pay RPI the difference between the Milestones paid for the Non-
Ribozyme Product and the Ribozyme Product as such Milestones are
achieved. Conversely, if a Ribozyme Product is developed first followed
by a Non-Ribozyme Product against the same Gene Target, RPI will provide
credit to Schering against future Milestones for such Ribozyme Product,
an amount equal to the difference between the Milestones paid for the
Ribozyme Product and Milestone payments owed on the Non-Ribozyme
Product.
IX
ROYALTY PAYMENT; THIRD PARTY ROYALTIES; CROSS-ROYALTIES
9.1 Royalty Term. (a) Schering shall pay RPI royalties on Net Sales of
Ribozyme Products and Non-Ribozyme Products, on a country-by-country
basis.
(b) The "Royalty Term" for each Non-Ribozyme Product shall be
fifteen (15) years from the date of the First Commercial Sale of
each such Non- Ribozyme Product.
(c) The "Royalty Term" for each Ribozyme Product shall be from
the date of the First Commercial Sale of each such Ribozyme
Product, until the later of [ ] from First Commercial Sales of
each such Ribozyme Product. Upon the expiration of the patents in
RPI Base Technology or Developed Technology owned by RPI which
specifically claim such Ribozyme Product on a country-by-country
basis, the Royalty shall drop from [ ] as follows:
(i) If Annual Net Sales are [ ]
(ii) If Annual Net Sales are greater than;]
(iii) If Annual Net Sales are greater than [ ]
(iv) If Annual Net Sales are greater than [.]
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
27
(b) Paid-Up License. At the end of the Royalty Term for each
Ribozyme or Non-Ribozyme Product Schering shall have a [ ] by RPI
to make, have made, use, sell, offer to sell or import Ribozyme
Products and Non- Ribozyme Products.
9.2 Royalties on Ribozyme Products. Subject to the limitation of payments
to be made by Schering pursuant to Section 10.4(b) and (c) during the
Royalty Term, Schering shall pay to RPI a royalty of (i) [ ] on Net
Sales of each Ribozyme Product ("Royalty"), provided however, if,
pursuant to Sections 9.4 and 9.5, Schering is required to pay any Third
Party a royalty on a Ribozyme Product or for the use of Ribozyme
pursuant to this Agreement and such royalty is paid for a license
because of such use or because the Ribozyme Product contains a Ribozyme
or because the Ribozyme Product was made using a Ribozyme then one
hundred (100%) percent of such royalty shall be deducted from the
percentage Royalty paid to RPI; (ii) plus for Exogenous Ribozyme
Products manufactured by RPI ("Bonus Royalty"):
(a) [ ] if:
(i) Annual Net Sales are less than [ ] and RPI's
Transfer Price to Schering as a percentage of Net Sales
is [ ]
(ii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net is Sales greater than [ ]
(b) [ ] if:
(i) Annual Net Sales are [ ] and RPI's Transfer
Price to Schering as a percentage of Net Sales is greater
than [ ] but less or equal to [ ]
(ii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering is
greater than [ ] but less than, or equal to [ ]
(iii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is greater than [ ] but less than
[ ] or
(c) [ ] if:
(i) Annual Net Sales are less than [ ] and RPI's
Transfer Price as a percentage of Net Sales is less than or
equal to [ ]
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
28
(ii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is greater than [ ] but less than
or equal to [ ]
(iii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales are greater than [ ] but less than
or equal to [ ]
(iv) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is greater than [ ], but less than
[ ]
(d) [ ] if:
(i) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is less than or equal to [ ]
(ii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is greater than [ ] but less than
or equal to [ ]
(iii) Annual Net Sales are greater than [ ] but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales are greater than [ ] but less than
or equal to [ ]
(iv) Annual Net Sales are greater than [ ] and
RPI's Transfer Price to Schering as a percentage of Net
Sales is greater than [ ], but less than [ ]
(e) [ ] if Annual Net Sales are greater than [ ] and RPI's
Transfer Price to Schering as a percentage of Net Sales is greater
than [ ] but less than or equal to [ ]
(f) [ ] if:
(i) Annual Net Sales greater than [ ] but less
than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is less than or equal to [ ]
(ii) Annual Net Sales are greater than [ ], but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is greater than [ ], but less than
or equal to [ ]
(g) [ ] if:
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
29
(i) Annual Net Sales are greater than [ ], but
less than [ ] and RPI's Transfer Price to Schering as a
percentage of Net Sales is less than or equal to [ ]
(ii) Annual Net Sales are greater than [ ] and
RPI's Transfer Price to Schering as a percentage of Net
Sales is greater than [ ] but less than or equal to [ ]
(h) [ ] if Annual Net Sales are greater than [ ] and RPI's
Transfer Price to Schering as a percentage of Net Sales is less
than or equal to [.]
Each Product shall meet its own Net Sales threshold for purposes
of calculating the royalties due under this Section 9.2. The Bonus
Royalty is applied to the increment of Net Sales to which it
applies and not the entire Net Sales amount. The Bonus Royalty
referred to in Sections 9.2 (a) through (h) shall not be paid on
Net Sales of Exogenous Ribozyme Products during any period there
are no issued patents in RPI Base Technology or Developed
Technology owned by RPI which specifically claim such Exogenous
Ribozyme Product.
(i) This chart is intended to be read in conjunction with
Section 9.2 (a) through (i). If there is any ambiguity between
Section 9.2 (i) and Sections 9.2 (a) through (h), Section 9.2 (a)
through (h) controls.
[ ]
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9.3 Royalties on Non-Ribozyme Products. During the Royalty Term according
to Section 9.1(b), Schering shall pay to RPI a royalty of [ ] on Net
Sales of each Non-Ribozyme Product.
9.4 RPI Payment of Third Party Royalties. RPI is solely responsible for all
fees, payments, royalties, up-front payments concerning the Cech Patents
and Ribozyme Technology including but not limited to any royalties to
the University of Colorado, University of Colorado Foundation, Inc.,
CTI, ▇▇▇▇▇▇ ▇▇▇▇, Ph.D., and CTI. If such royalties become due and
payable, and RPI has failed to make such payments in a timely manner,
Schering
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
30
may pay such royalties to Third Parties to which a royalty from RPI is
due and credit such payments against any royalties due RPI pursuant to
this Agreement.
9.5 Schering's Right to Procure Third Party Licenses. Except as provided in
Section 9.4, Schering shall be responsible for procuring such licenses
as it deems, in its sole discretion, appropriate for the manufacture,
use, marketing, sale or distribution of Ribozyme Products or Non-
Ribozyme Products by Schering and its Sublicensees.
9.6 Cross Royalties. In the event Schering pays the First Milestone Payment
and then terminates the development of a Ribozyme Product or Non-
Ribozyme Product or terminates this Agreement pursuant to Section
18.2(c) or (f), and RPI proceeds with the development and marketing of
such Ribozyme or Non-Ribozyme Product, RPI shall pay Schering a royalty
of [ ] with respect to Ribozyme Products or [ ] with respect to Non-
Ribozyme Products on Net Sales by RPI or any RPI assignee, Sublicensee
or any successor in interest of RPI of such Ribozyme or Non-Ribozyme
Product that are claimed by one or more issued patents or patent
applications in Developed Technology jointly or solely owned by
Schering. In all circumstances, RPI shall pay all royalties due
pursuant to any Third Party. Royalties will be paid on the Net Sales of
each such Ribozyme or Non-Ribozyme Product for a period from the date of
the first commercial sale by RPI of such Ribozyme or Non-Ribozyme
Product on a country-by-country basis until the last to expire issued
Live Claim in the Developed Technology which claims such Ribozyme or
Non-Ribozyme Product, or in the case of a Live Claim in a pending patent
application in Developed Technology until the earlier of (i)
abandonment, cancellation, withdrawal or disclaiming of such Live Claim
or (ii) the ten (10) year anniversary of filing such patent application
or (iii) if parent of such patent application exists the ten (10) year
anniversary of the filing of the earliest such patent application;
provided however, if such pending Live Claim should subsequently issue,
RPI's royalty obligation shall revive, and RPI shall pay Schering a
royalty pursuant to this Section 9.6 ("RPI Royalty Term").
9.7 Payment of Royalties.
(a) Royalty Report. Each Party owing Royalties or royalties
to the other Party under this Agreement shall provide a royalty
report and, if applicable, a royalty payment to the other Party
on a quarterly calendar basis. The report relating to Net Sales
within the U.S. shall be provided within ninety (90) days after
the end of the calendar quarter to which such report and payment
apply and the report relating to Net Sales for countries other
than the U.S. shall be provided within one-hundred and twenty
(120) days after the end of the calendar quarter to which such
report and payment apply.
(b) Records Retention. Each Party shall keep, and require any
Sublicensee to keep, for a period of not less than seven (7)
years, complete and accurate records of all Net Sales of Ribozyme
Products and Non-Ribozyme Products. Each Party shall have the
right, at its respective sole expense, through a certified public
accountant reasonably acceptable to the other Party, and
following reasonable notice, to
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
31
examine records of Net Sales and COGS during regular business
hours during the Royalty Term or RPI Royalty Term; provided
however, that such examination shall not (i) be of records for
more than the prior three (3) years, (ii) take place more often
than once a year, and (iii) cover any records which date prior to
the date of the last examination, and provided further that, such
accountants shall report to the auditing Party only as to the
accuracy of the royalty statements and payments and the amount of
any underpayment or the accuracy of COGS statements. Copies of
such reports shall be supplied to the non-auditing Party. In the
event the report demonstrates that Schering or RPI has underpaid
Royalties or royalties or RPI overstated COGS then Schering or
RPI shall promptly pay such Royalties or royalties as the case
may be or credit differences caused by overstatement of COGS. In
addition, if the amount of underpayment of Royalty or royalties
due pursuant to this Agreement or over statement of COGS by [ ]
or more than the paying or crediting Party shall also pay
interest at the prime rate as stated in the Wall Street Journal
under "Money Rates" ("Prime") applied to the amount unpaid from
the date due to the date paid. If Schering or RPI has overpaid
Royalties or royalties or RPI has overstated COGS, Schering or
RPI may credit such overpayments against future Royalties or
royalties owed the other Party. If RPI has understated COGS,
except as provided in Section 10.4, Schering shall pay the amount
of such underpayment.
(c) Tax on Royalties. Any tax paid or required to be withheld
by a Party for the benefit of the other Party on account of
royalties payable to the other Party under this Agreement shall
be deducted from the amount of royalties otherwise due. The
paying Party shall secure and send to the other Party proof of
any such taxes withheld and paid by the paying Party for the
benefit of the other Party and shall, at the other Party's
request, provide reasonable assistance in recovering said taxes,
if possible.
(d) Form of Payment. All payments to a Party hereunder shall
be made in United States Dollars, for such Party's account, by
wire transfer to a bank in the United States designated in
writing by such Party; provided that where payments in respect of
Net Sales are based on Net Sales in non-U.S. currencies, the
amount of Net Sales and any deductions used to calculate Net
Sales, if any, shall be converted monthly to United States
Dollars at the average of the average daily "bid" and "asked"
exchange rates as provided by Reuters (or a different independent
wire service providing international spot exchange rates agreed
to by the Parties) for the applicable month.
9.8 Reports on Net Sales Exclusions. In the event that Schering or its
Sublicensees distributes Ribozyme Products or Non-Ribozyme Products to
any entity for research or clinical testing purposes, or indigent or
other public support programs, and determines that such distributions
shall be excluded from the computation of Net Sales, then Schering shall
provide RPI an annual written report on February 15 of each calendar
year describing such distribution of all such Ribozyme Products or Non-
Ribozyme Products, the purpose for which such Ribozyme Products or Non-
Ribozyme Products were distributed, and the
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
32
quantities of Ribozyme Products or Non-Ribozyme Products so distributed
in the preceding calendar year.
X
Manufacturing and Supply
10.1 RPI Right to Manufacture Exogenous Ribozymes. Pursuant to Section 10.5,
RPI has the right to manufacture Exogenous Ribozyme Products and shall
manufacture Exogenous Ribozymes for research pursuant to the Research
Plan. The manufacturing term is the same as the Royalty Term according
to Section 9.1(c) on a country-by-country basis (hereinafter referred to
as "Manufacturing Term").
10.2 Schering Right to Manufacture Ribozymes. (i) Schering shall manufacture
Endogenous Ribozyme Products, and shall manufacture Endogenous Ribozyme
for research pursuant to the Research Plan and, (ii) pursuant to Section
10.5, the backup right to manufacture Exogenous Ribozyme Products.
10.3 Non-Commercial Research and Clinical Supply. Prior to the First
Commercial Sale, RPI will manufacture Exogenous Ribozymes for the
requirements of Schering for (i) research purposes as ordered by
Schering at a price equal to [ ] ("Research Transfer Price") [ ] (ii)
clinical purposes as ordered by Schering at a price equal to [ ] per
vial ("Clinical Transfer Price"). The Clinical Transfer Price shall be
deemed to include the final form of the product and final packaging as
described in the IND.
10.4 Commercial Supply. (a) Subject to the terms and conditions of this
Agreement, and except to the extent and amounts that it is necessary for
Schering or its Sublicensees to maintain levels of production to be a
viable backup manufacturer for Exogenous Ribozyme Products, RPI shall
supply to Schering, and Schering shall purchase from RPI, all of the
worldwide requirements for Exogenous Ribozyme Products of Schering and
its Affiliates and Sublicensees at a price equal to [ ] ("Transfer
Price"). Such Exogenous Ribozyme Products shall be in final package and
final labeling form, and such Transfer Price shall include all raw
material, direct labor, overhead, quality control, testing, stability
testing, labels, package inserts, cartons, labeling which accompanies
the vials, and primary and secondary packaging all as described in the
NDA. (b) Provided however, under no circumstances shall such Transfer
Price plus Royalty plus Bonus Royalty on Net Sales exceed [ ] (c) The
Transfer Price will not exceed [ ] of Schering's Net Sales. If this
creates a problem for RPI, the Parties agree to meet to discuss
opportunities to further reduce COGS; however, in no event will the
Transfer Price exceed [ ] of Schering's Net Sales. (d) If at any time
RPI is unable or otherwise fails to provide Exogenous Ribozyme Product
in the quantities ordered pursuant to Section 10.10, Schering shall be
entitled to obtain that shortfall amount of Exogenous Ribozyme Products
from any other supplier or manufacturer as set forth in Section 10.12,
and in such case RPI shall just receive the applicable [ ] Royalty on
Net Sales.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
33
10.5 Condition of RPI Becoming Schering's Worldwide Supplier of Exogenous
Ribozymes Products. If the conditions set forth in this Section 10.5
have been satisfied, RPI will be Schering's worldwide supplier of
Exogenous Ribozyme Products. The conditions precedent to RPI becoming
Schering's worldwide supplier of final Exogenous Ribozyme Products are
as follows:
(a) As of the initiation of Pivotal Clinical Trials for a
putative Exogenous Ribozyme Product: RPI shall not be in breach
of this Agreement in any material respect (or if it is in breach
it shall cure such breach within sixty (60) days of notice
thereof); (x) RPI shall have established production facilities
which: (i) in the aggregate shall be capable of meeting the
supplies for Pivotal Clinical Trials; (ii) shall comprise at
least one RPI facility whose capacity is planned to provide
Worldwide Target supplies at the time of first Regulatory
Approval of each Ribozyme and Non-Ribozyme Product. (y) RPI shall
have, (i) during the previous four calendar quarters, timely
delivered substantially all amounts of Exogenous Ribozyme
Products for testing as to which orders timely placed pursuant
hereto were accepted, and (ii) substantially achieved the
delivery targets recited in Schering purchase orders.
(b) If any of the foregoing conditions have not been
satisfied, then, upon written notice from Schering, (i) RPI and
Schering will meet at least once to discuss what steps RPI should
take to assure Schering that RPI has taken and will take all
steps necessary to assure Schering that RPI has the capacity and
capability to become Schering's worldwide supplier of Exogenous
Ribozyme Products; (ii) the Parties will in good faith discuss
such steps and assurances; (iii) if after such discussions,
Schering in good faith believes RPI does not have the capacity
and capability to become Schering's worldwide supplier of
Exogenous Ribozymes, RPI has an additional six (6) months from
the meeting referred to in Section (i) of this paragraph to cure
the matters set forth in such meeting. If RPI has not cured to
Schering's good faith judgment then RPI at Schering's cost will
train Schering personnel and shall transfer all manufacturing
trade secrets to Schering to ensure that Schering can manufacture
Exogenous Ribozyme Products and RPI shall be the backup supplier
of Exogenous Ribozyme Products. Schering will thereafter be
entitled to have all of its other requirements for Exogenous
Ribozyme Products supplied by any other supplier or manufacturer,
including Schering, and notwithstanding any other term of this
Agreement RPI shall receive as sole compensation on account of
Net Sales of Exogenous Ribozyme Products an amount as provided in
Section 9.2 of this Agreement.
(c) RPI shall advise Schering as soon as practicable if it is
unable or does not elect to supply Exogenous Ribozyme Products
outside the United States.
10.6 Worldwide Target Defined. The Worldwide Target shall be agreed to
between the Parties annually at the date set by Schering (the "Fixing
Date"). The "Worldwide Target" shall
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
34
represent a reasonable estimate, based on information available to the
Parties as of the Fixing Date, of the total expected worldwide demand
for Exogenous Ribozyme Products. Such estimate shall be based upon
prior sales history, market demand in excess of current capacity, the
size of the potential patient population for approved indications (or
indications which are in the final stages of receiving approval) and
expected rates of use by such patients, prior and current forecasts
(which shall be considered in light of the accuracy of prior forecasts),
and such other factors as are reasonably considered in forecasting
demand on a long-range basis. The establishment of a Worldwide Target
shall not relieve RPI of any best efforts obligation to meet demand in
excess of that amount. The calculation of the Worldwide Target shall not
include potential sales arising from as-yet unapproved indications, nor
shall it be reduced by the mere possibility of restricted sales due to
factors such as the actions of a competitor not yet in the market or
contemplated governmental actions.
10.7 Ordering Generally. As set forth specifically below, the Parties shall
cooperate in the forecasting of demand for Exogenous Ribozyme Product
and in providing for worldwide capacity for the manufacture thereof.
10.8 Approval. Upon notification of FDA approval, Schering shall confirm its
then-current rolling forecast, and the Parties shall confer as to the
possibility of increasing Schering's order in accordance with RPI's
manufacturing capacity. The Parties recognize that during the first
year after First Commercial Sale there may exist some uncertainties
concerning demand for Exogenous Ribozyme Product and agree to meet to
confer about these uncertainties on a regular basis, but any
modification to the terms hereof shall be only as agreed in writing by
the Parties.
10.9 Rolling Forecasts. Upon the initial order for First Commercial Sale of
final Exogenous Ribozyme Product, and thereafter on the first business
day of each calendar quarter during the term that RPI is manufacturing
Exogenous Ribozyme Products for Schering, Schering shall deliver to RPI
a non-binding written forecast of the quantities of vials that Schering
expects in good faith to order in each of the three consecutive calendar
quarters following the quarter for which the most recent order has been
placed. Such forecasts shall represent Schering's best estimate of its
anticipated orders. At RPI's request Schering shall confer with RPI as
to the basis for such forecasts and shall disclose to RPI any underlying
data for such forecasts.
10.10 Quarterly Orders. Beginning with the purchase order for the first
calendar quarter prior to the First Commercial Sale, Schering shall
place written purchase orders for vials or what ever form of the final
container for such Exogenous Ribozyme Product (hereinafter referred to
as "vials") on a quarterly basis, not less than one hundred eighty (180)
days prior to the commencement of the calendar quarter for which the
vials are desired. Each purchase order shall specify requested delivery
dates and, if appropriate, divide the vials intended for U.S. and non-
U.S. markets, and shall be net of (although it shall identify) any vials
to be supplied
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
35
by other suppliers as permitted hereunder. Unless otherwise agreed by
the Parties in writing, such purchase orders shall specify delivery
dates that ratably distribute the delivery of vials among each of the
months included in such calendar quarter. No less than 150 days before
the commencement of the quarter in which the product is to be delivered,
RPI shall, in writing, advise Schering, in good faith, of the number of
vials which it accepts for delivery during that period, and Schering
shall be entitled to rely on such delivery during that period, and
Schering shall be entitled to rely on such advice for purposes of
obtaining alternate supplies of Exogenous Ribozyme Products to make up
any shortfall in such supplies. Any orders placed hereunder shall be
rounded upward, if necessary, to a reasonably whole lot. RPI shall use
its best efforts to accept purchase orders consistent with its capacity
and to its best efforts to deliver the number of vials that it has
accelerated for delivery. To the extent Schering places orders other
than such regular quarterly orders, or to the extent that any orders
accelerate the estimated delivery schedule, RPI shall use reasonably
diligent efforts to supply such quantities so ordered. At the request
of either Party, the Parties shall meet and confer in good faith
regarding the establishment of a different ordering schedule to take
account of market conditions, regulatory approval lag times, or
manufacturing time. If, RPI having accepted an order, fails timely to
deliver the full amount of such order, then Schering shall (without
limiting any other rights hereunder) be reimbursed for the additional
costs and expenses reasonably incurred by Schering and directly arising
from such failure.
10.11 Reports. RPI will report quarterly to Schering its progress in the
manufacture of vials hereunder and RPI shall promptly notify Schering if
it appears that RPI will be unable to timely deliver any amounts
accepted for delivery.
10.12 Supply Shortfalls; Capacity Planning.
(a) At any time during the term of this Agreement Schering
shall be entitled to qualify or license any reasonable supplier
or manufacturer (including Schering) to manufacture Exogenous
Ribozyme Products in any jurisdiction, and shall be entitled to
enter into an agreement with such supplier or manufacturer to act
as an alternate source of supply of Exogenous Ribozyme Products
to Schering in any jurisdiction; provided that Schering shall not
order or purchase Exogenous Ribozyme Products from such supplier
(other than non-commercial quantities of Exogenous Ribozyme
Products used solely for regulatory licensing of such supplier)
except under circumstances permitted under this Agreement.
(b) If at any time RPI is unable or otherwise falls to supply
(or notifies Schering that it cannot supply) Schering with the
Exogenous Ribozyme Product for a particular calendar quarter
ordered pursuant to Section X, Schering shall be entitled, upon
notice to RPI, to obtain the shortage in its requirements for
such calendar quarter from any other licensed supplier or
manufacturer (including Schering). RPI's sole compensation for
Exogenous Ribozyme Product manufactured by such supplier (or
Schering) pursuant to this Section shall be the royalty set forth
in Section 9.2.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
36
10.13 Subcontractors. RPI may subcontract with one or more Third Parties for
the performance of one or more major processing steps provided that each
subcontracting agreement for any major processing steps shall contain
the following provisions: (a) in the event of a Change of Control,
Schering shall be permitted to assume all of RPI's rights and
obligations under such subcontracting agreement; (b) the manufacture of
Exogenous Ribozyme Products by each subcontractor shall be approved by
the FDA or other appropriate governmental agency; (c) the Exogenous
Ribozyme Products or services to be supplied by each subcontractor and
the manufacturing process therefor shall comply with all specifications
and warranties under this Agreement; and (d) Exogenous Ribozyme Product
will be required to be supplied on reasonable commercial terms,
including an obligation on the part of each subcontractor to pay damages
for breach of its supply obligations, which damages shall include at
least the cost of securing alternate supplies. Notwithstanding any such
subcontracting agreement, RPI shall remain fully responsible for all of
its obligations under this Agreement.
10.14 Manufacturing Procedures. In the manufacturing of the vials, RPI shall
adhere to the specifications and shall utilize such additional or
modified procedures, facilities, equipment and labeling which may from
time-to-time be agreed upon in advance and in writing by the Parties and
as required by the FDA or other appropriate governmental regulatory
authority. Any amendment to the release specifications shall be by
agreement of the Parties not to be unreasonably withheld. RPI, at its
sole cost, shall maintain and retain samples required by Current Good
Manufacturing Practices as defined in 21 CFR 211 et seq. or any other
applicable regulations ("GMP"). In addition RPI will, at its sole cost,
select and retain samples of each lot of Exogenous Product and conduct
an ongoing stability program as mutually agreed to by the Parties, will
maintain all stability records for such period as is required by the FDA
or other regulatory agency and furnish Schering with copies of all such
records at Schering's request and will undertake any lot-by-lot testing
required by the FDA or other regulatory agency, or as requested and paid
for by Schering pursuant to budgets agreed in advance.
10.15 Delivery. Promptly upon completion of quality assurance testing by RPI
of each lot ordered hereunder, RPI shall notify Schering of the
completion thereof and shall provide Schering with appropriate
certificates of analysis for such lot. The vials shall comply with all
of RPI's warranties under this agreement. Schering shall have final
authority to accept the vials from RPI on a lot-by-lot basis, based on
whether the lot complies with all of RPI's warranties under this
Agreement, and Schering shall have the right to review batch records as
well as quality assurance results. If RPI and Schering disagree as to
whether a lot has been rightfully rejected then the Parties shall submit
the matter to a mutually acceptable third party, such as testing
laboratory in the case of a dispute over analysis of the vials. The
costs and fees of such third party shall be shared equally by the
Parties. Within five business days of notification of completion and
provision of the certificates of analysis, unless Schering has properly
rejected such lot, Schering shall cause such lot to be removed at
Schering's own cost from the premises where such lot was finished. If
Schering requires
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
37
longer than such five (5) day period to arrange for removal due to
special circumstances, including the reasonable need to review batch
records prior to acceptance, Schering shall so notify RPI and the
Parties shall discuss in good faith a reasonable extension of such five
(5) day period, and prior to delivery RPI shall store Exogenous Ribozyme
Product at its own expense. Except for vials intended for distribution
in the United States, title to and risk of loss for all vials shall pass
to Schering upon delivery to a carrier at RPI. Title to and risk of
loss for vials intended for distribution in the United States shall pass
to Schering's United States Affiliate upon delivery to a carrier at the
RPI site.
10.16 Inspection. Schering may inspect each lot shipped by RPI and shall
notify RPI of any non-conformance to specifications (or other proper
reason for rejection) within thirty (30) days after receipt of the
shipment and the relevant batch records being made available to
Schering. Any delivery not rejected by Schering within such thirty (30)
days shall be deemed accepted unless Schering informs RPI that
Schering's testing or investigation is still under way, in which case
the time shall be extended for a reasonable period to allow completion
of the testing or investigation; provided however, if a lot is
subsequently rejected by the FDA or other applicable regulatory agency
(or by Schering in the event the quality control testing of the
Exogenous Ribozyme Products necessarily requires more than thirty (30)
days), payment for that lot by Schering shall be suspended by Schering,
or, if already paid, the next payment to RPI by Schering shall be
reduced by crediting the amount Schering had advanced for the non-
conforming lot. If such lot is subsequently accepted by the FDA, or
other agency, with at least six months remaining prior to the expiration
date of such lot, then Schering will, upon Schering's acceptance of such
lot, pay RPI according to this Agreement.
10.17 Additional Testing. Schering shall have the right to request any
additional testing of the vials (in addition to testing necessary to
determine whether to accept the vials) that Schering reasonably believes
necessary and, if requested, RPI shall use best efforts to promptly
perform such testing and inform Schering of the results; provided
however, that all such additional testing shall be at Schering's sole
cost and expense, and Schering shall reimburse RPI for its costs
(according to agreed budgets) incurred in performing such additional
testing within thirty (30) days after RPI submits an invoice for such
costs.
10.18 Right to Review Processes. RPI shall maintain all quality assurance
manufacturing records and batch production records directly related to
the manufacture of Exogenous Ribozyme Products, or copies thereof, as
required by FDA or other applicable regulation. Schering's personnel
have the right to review and audit compliance with manufacturing
specifications during regular business hours at reasonable intervals,
and shall have the right to visit and inspect each RPI site at such
times as required for the purpose of review of batch records and
manufacturing and quality assurance procedures with respect to Exogenous
Ribozyme Products, provided that such review or audit does not impede
RPI's manufacture and release processes. Schering personnel shall not
have access to any records, information, or data concerning other RPI
products and Schering personnel having access to any RPI site shall
execute reasonable confidentiality agreements to prevent disclosure of
such information that may be discovered inadvertently. Schering's
personnel may make general inquiries the
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
38
answers to which will be held in confidence by them, concerning such
matters as manufacturing scheduling, and equipment cleaning of any other
RPI's site to insure that Exogenous Ribozyme Products is being
manufactured under GMP.
10.19 Labeling. RPI shall produce all vials in a finished and packaged form,
using labels, cartons, package inserts and trade pack shippers in
accordance with the format prepared by Schering. Unless the Parties
agree otherwise and the law so permits, RPI (as appropriate) shall be
identified as the manufacturer on the labels. Schering shall give
reasonable advance notice of any label, labeling, or packaging change to
enable RPI to switch labels, labeling, or packaging without interrupting
RPI's production schedule or incurring unreasonable expense, and unless
required by the FDA or other regulatory agency, such changes shall not
significantly increase the RPI COGS without RPI's approval, unless
Schering agrees to pay for such significant increase. To the extent
consistent with FDA or other applicable regulations, and according to
Schering's instructions Schering or its Affiliates, shall have its name
placed as prominently as possible on the label of the final product.
The cost of packaging and labels shall be borne by RPI, provided that if
Schering provides packaging or labels for any vials, the actual
reduction in the RPI's COGS shall be credited to Schering with respect
to such vials against payment to be made upon delivery.
10.20 Investigation of Complaints. Schering shall have the primary right and
responsibility to investigate and answer all complaints concerning
Exogenous Ribozyme Products. If permitted by law, Schering shall have
the primary right and responsibility to report to the FDA or other
applicable regulatory agency all complaints and corrective actions with
respect to Exogenous Ribozyme Products, but if so required by law, RPI
shall perform such reporting. In this regard, Schering will supply RPI
with a copy of any completed investigation report as required by GMP as
well as any other report needed by RPI to comply with the law. RPI will
promptly notify Schering of any adverse events, complaints or problems,
or any inquiries made by healthcare providers, or any actual or
threatened legal or regulatory action of the FDA or other regulatory
agency relating to Exogenous Products hereunder of which RPI has notice.
10.21 FDA Regulation of "Ownership". If it is determined by the FDA that
Exogenous Ribozymes are to be regulated as biologics then:
(a) Schering shall make all decisions and have regulatory
responsibility in respect of the ELA/PLA (Establishment License
Application/Product License Application as defined by FDA
regulations as amended and foreign equivalents) and (b) the
ELA/PLA shall be designate so that Schering or its Affiliate as
named as the "Responsible Head" thereof.
(b) Schering has sign-off authority with respect to all batch
records (including in-process batch records) at Schering's sole
cost, risk and expense.
(c) If, in the reasonable opinion of Schering based on issued
or proposed regulations, or correspondence or statements of the
FDA it appears that transferring
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
39
certain responsibilities for Exogenous Ribozyme Products quality
control or approval to Schering personnel, including final
authority for manufacturing approval of Exogenous Ribozyme
Product would materially enhance the ability of Schering to be
named in the ELA/PLA as the "Responsible Head", then RPI shall
allow Schering, at its sole cost, risk, and expense, to test and
release for sale Exogenous Ribozyme Products manufactured at the
RPI site(s), and, if it reasonably appears necessary, to place
such personnel with such final authority for approval of
Exogenous Ribozyme Product in the RPI site(s) to the extent
permitted by the Federal Food, Drug and Cosmetic Act and Public
Health Act as amended. RPI shall not be liable for any error or
omission of such personnel or in such testing, including the
erroneous approval of Exogenous Ribozyme Products.
XI
PAYMENTS
11.1 Payment on Delivery or Completion. Within ninety (90) days after the
later of the delivery of each shipment of Exogenous Ribozyme Products to
Schering by RPI or receipt of the related invoice Schering shall pay for
such Exogenous Ribozyme Products, provided if any portion of the
shipment is not accepted Schering shall pay for only that portion of the
shipment that is accepted.
11.2 Indigent and Rebate Vials. To the extent, that vials are provided
without charge by Schering pursuant to an "indigent program" or as a
non-cash rebate with respect to certain purchases of Exogenous Ribozyme
Products, Schering shall not pay Royalties or Bonus Royalties on such
free Ribozyme and Non-Ribozyme Products.
XII
TAX MATTERS
12.1 Tax Matters. (a) RPI agrees that Schering is entitled to all tax
benefits, including in particular, tax credits and/or tax deductions
attributable to amounts Schering has funded hereunder. RPI shall file
its federal, state, and local tax returns on a basis consistent with
this Agreement, and shall not take any action inconsistent with
Schering's entitlement to such tax benefits.
(b) In the event that Schering, in its judgment, determines
that it must obtain information and verification regarding the
use or application of such expenditures in order to prepare
Schering tax returns or to respond to an inquiry during a tax
audit or any other inquiry relating to such treatment of its tax
return, or to defend its tax position in any proceeding including
litigation, RPI shall reasonably cooperate with Schering and
furnish it with such information as it may reasonably require at
Schering's request and expense.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
40
XIII
PATENTS
13.1 Disclosure by Employees, Agents or Independent Contractors. Schering and
RPI agree that as to any employees, agents, or independent contractors
of Schering and RPI presently in their employ or who are hired or
retained by Schering or RPI to perform, manage performance of, or
participate in the research done pursuant to this Agreement, Schering
and RPI will ensure that such employees, agents, or independent
contractors will promptly disclose and assign to the Party engaging them
any and all rights to inventions, developments, or improvements,
(whether patentable or not) conceived and/or reduced to practice during
the course of their duties, Each Party will notify the other Party
promptly of any sole or joint inventions in Developed Technology, or RPI
Base Technology pursuant to the Research Plan. lnventorship will be
determined using United States patent laws.
13.2 Patent Prosecution and Related Activities.
(a) RPI Inventions. RPI shall be responsible, at its sole
expense, for preparing, filing, prosecuting and maintaining in
such countries it deems appropriate, patent applications and
patents relating to all solely owned RPI inventions within the
RPI Base Technology and RPI solely invented Developed Technology
("RPI Inventions") and conducting any interferences, re-
examinations, reissues and oppositions relating to such patent
applications and patents.
(b) Schering Inventions. Schering shall be responsible, at
its sole expense, for preparing, filing, prosecuting and
maintaining in such countries it deems appropriate, patent
applications and patents relating to all solely owned Schering
inventions within the Schering Base Technology, and solely
invented Schering Developed Technology ("Schering Inventions")
and conducting any lnterferences, re-examinations, reissues and
oppositions relating to such patent applications and patents.
(c) Joint Inventions. Schering shall be responsible, at its
sole expense, for preparing, filing, prosecuting and maintaining
in the Core Countries patent applications and patents relating to
all inventions jointly made by the Parties included within the
Developed Technology ("Joint Inventions"), and conducting any
interferences, re-examinations, reissues and oppositions relating
to such Developed Technology. As used in this Agreement, "Core
Countries" shall mean the United States, Canada, Europe (members
of the European Patent Convention via European Patent Office
applications), Japan and Australia. No Party shall have the
right to file any patent application relating to a Joint
Invention within the Developed Technology except in accordance
with this Section XIII.
(d) (i) Within ninety (90) days following the first actual
reduction to practice of a Joint Invention, or following receipt
of notice by RPI of its desire to have a patent application filed
for a Joint Invention or such later time as the Parties may
agree,
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
41
Schering shall provide RPI with a first draft of a patent
application disclosing and claiming such invention, subject to
Section 13.2(d)(ii) below. RPI shall have the right to propose
any modifications or additions to such patent applications within
thirty (30) days of receipt of the draft. If Schering objects to
any such modification or addition, the Parties shall discuss the
problem in a good faith effort to resolve it. If within forty-
five (45) days of receipt of such draft by RPI, the problem
remains unresolved or if at any time the Parties cannot agree
whether to file a patent application in the U.S. or any other
country relating to a Joint Invention, such matters will be
submitted to the Research Committee for resolution. If the
Research Committee cannot resolve the issue, Schering shall be
entitled to make the final decision. Schering shall keep RPI
informed of prosecution of such Joint Inventions and provide
drafts of prosecution documents to RPI for comment. RPI may make
suggested changes; if Schering objects to any such suggested
changes, the Parties shall discuss the problem in a good faith
effort to resolve it. If within five (5) days of receipt of such
draft by RPI, the problem remain unresolved, such matters shall
be referred to the Chairman of each Party for resolution. If
they fail to agree, Schering shall make the final decision.
(ii) Notwithstanding Section 13.2 (d) (i) above, in
the event that RPI in good faith believes that a patent
application should not be filed with respect to a Joint
Invention, prior to the end of such ninety (90) day period,
within sixty (60) days of the beginning of such ninety (90)
day period it shall provide the Research Committee with a
written explanation of why such a filing is not desirable.
The Research Committee shall then determine whether such an
application should be filed. In the event that it
determines that it should, Schering shall have an
additional forty-five (45) days to provide the Research
Committee with a draft patent application.
(e) Election Not to Prosecute. Schering may elect with ninety
(90) days prior notice to RPI to discontinue the prosecution of
any patent applications filed pursuant to Section 13.2 (b), (c)
or (d) above or not to file or conduct any further activities
with respect to the patent applications or patents subject to
such Sections. RPI may elect upon ninety (90) days prior notice
to Schering to discontinue the prosecution of any patent
applications filed pursuant to Section 13.2 (a) above or not to
file or conduct any further activities with respect to the patent
applications or patents subject to such Section. In the event
Schering or RPI respectively decline to file or having filed fail
to further prosecute or maintain any patent applications or
patents subject to this Agreement, or conduct any interference's,
re-examinations, reissues, oppositions with respect thereto, the
other Party shall have the right to prepare, file, prosecute and
maintain such patent applications and patents in such countries
worldwide as it deems appropriate, and conduct any interferences,
re-examinations, reissues or oppositions at its sole expense.
13.3 Cooperation. Each of Schering and RPI shall keep the other fully
informed as to the status of patent matters described in this Section
XIIl including, without limitation, by providing
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
42
the Research Committee the opportunity to fully review and comment on
any documents which will be filed in any patent office as far in advance
of filing dates as feasible, and providing the other copies of any
documents that such party receives from such patent offices promptly
after receipt, including notice of all interference's, reissues, re-
examinations, oppositions or requests for patent term extensions.
Schering and RPI shall each reasonably cooperate with and assist the
other at its own expense in connection with such activities, at the
other Party's request.
13.4 Permitted Disclosures. Following a written notice from the other Party
hereto, the Parties shall in good ▇▇▇▇▇ ▇▇▇▇▇ each other permission, not
to be unreasonably withheld, to disclose in the specification of a
patent application filed by the other Party pursuant to this Agreement,
any RPI Base Technology, Schering Base Technology, or Developed
Technology necessary to support and enable claims in such patent
applications.
13.5 Third Party Infringement.
(a) Schering Right. Schering, at its sole expense, shall have
the right, but not the obligation, to initiate and conduct legal
proceedings to enforce against any infringement or defend any
declaratory judgment action involving a patent within the
Developed Technology or Schering Base Technology covering
Ribozyme Products or Non-Ribozyme Products.
(b) RPI Obligation. RPI has the obligation to initiate and
conduct legal proceedings to enforce any patent in the RPI Base
Technology of or related to Ribozyme Products or Non-Ribozyme
Products or to defend any declaratory judgment actions involving
any such patent in the RPI Base Technology of or related to
Ribozyme Products or Non-Ribozyme Products against any
infringement at its sole expense.
(c) Failure to Enforce. If within six (6) months following
receipt of written notice of an infringement of Developed
Technology or RPI Base Technology which the Party receiving
notice has the right to enforce pursuant to this Section XIII,
the Party having such right fails to take such action to halt
such an alleged infringement or misappropriation or defend such a
declaratory judgment action, the other Party may, at its expense,
take such legal action as it deems appropriate, in its own name,
to halt such an alleged infringement, or misappropriation or
defend such a declaratory judgment action. Each Party agrees to
render such reasonable assistance as the prosecuting party may
request.
(d) Division of Recoveries.
(i) Any recovery received in connection with a
suit brought by Schering or RPI pursuant to Section 13.5(a)
or (b) shall be used first to reimburse the Party
conducting such suit for expenses (including attorneys',
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
43
professional and expert fees) incurred in such suit, and
any remainder treated as set forth below:
(a) The remainder of the recovery shall be
divided with Schering receiving [ ] and RPI
receiving [.]
(e) No Settlement without Consent. Neither Party shall enter
into any settlement of any claim, suit or proceeding under
Sections 13.5(a) or (b) above which admits or concedes that any
aspect of the Developed Technology or RPI Base Technology
licensed from the other Party is invalid or unenforceable without
the prior written consent of such other Party.
(f) Cooperation. Each Party shall keep the other reasonably
informed of the progress of any claim, suit or proceeding subject
to this Section 13.5 and cooperate reasonably in connection with
such activities at the request and expense of the Party involved
in such claim, suit or proceeding.
13.6 Third Party Infringement; RPI Right. (a) If RPI is selling a Ribozyme
Product or Non-Ribozyme Product and RPI owes Schering cross royalties
pursuant to Section 9.6, then RPI at its sole expense, shall have the
right, but not the obligation, to initiate and conduct legal proceedings
to enforce against any infringement or defend any declaratory judgment
action involving a patent within the Developed Technology or RPI Base
Technology covering such Ribozyme Product or Non-Ribozyme Product.
(b) Division of Recoveries.
(i) Any recovery received in connection with a
suit brought by RPI pursuant to this Section 13.6 shall be
used first to reimburse the Party conducting such suit for
expenses (including attorneys', professional and expert
fees) incurred in such suit, and any remainder treated as
set forth below:
(a) The remainder of the recovery shall
be divided with Schering receiving [ ] and RPI
receiving [.]
(c) No Settlement without Consent. RPI shall not enter into
any settlement of any claim, suit or proceeding under Section
13.6 which admits or concedes that any aspect of the Developed
Technology, licensed to Schering is invalid or unenforceable
without the prior written consent of Schering.
(d) Cooperation. RPI shall keep Schering reasonably informed
of the progress of any claim, suit or proceeding subject to this
Section 13.6.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
44
13.7 Infringement Claims by Third Parties.
(a) Schering Control. If the manufacture, sale or use of any
Ribozyme Product or Non-Ribozyme Product results in any claim,
suit or proceeding alleging patent infringement against Schering,
its Affiliates or its Sublicensees, Schering shall promptly
notify RPI in writing setting forth the facts of such claim in
reasonable detail. Except for RPI Base Technology, Schering
shall have the exclusive right to defend and control the defense
of any such claim, suit or proceeding, at its own expense, using
counsel of its own choice; provided however, without the prior
written consent of RPI, Schering shall not enter into any
agreement or settlement which admits or concedes that any aspect
of the Developed Technology owned by RPI is invalid,
unenforceable or not infringed. Schering shall keep RPI
reasonably informed of all material developments in connection
with any such claim, suit or proceeding.
(b) Royalty Escrow. If the manufacture, sale or use of any
Ribozyme Product or Non-Ribozyme Product pursuant to this
Agreement results in any claim alleging patent infringement
against a Party paying a Royalty or royalty to the other Party
(or its Sublicensees) based specifically on the practice of the
RPI Base Technology or Developed Technology, during the pendency
of such claim, the Party paying the Royalty or royalty may place
fifty (50%) percent of the Royalties or royalties otherwise due
hereunder attributable to such an alleged infringement in escrow.
Such escrowed amounts including any interest earned thereon shall
be returned to the paying Party in the event a final judgment of
infringement is rendered against the paying Party on such a
claim; otherwise, such amounts shall be paid to RPI, within
thirty (30) days following the dismissal of such a claim.
XIV
CONFIDENTIALITY
14.1 Confidentiality.
(a) Term of Confidentiality. Information is provided by the
"Disclosing Party" and received by the "Recipient". The
Recipient will keep all Information provided by the Disclosing
Party confidential for the Term and seven (7) years thereafter.
Without the prior written consent of the Disclosing Party, not to
be unreasonably withheld, the Recipient will not disclose any
Information to any Third Party, except to the officers,
employees, agents, or representatives of the Recipient or the
Recipient's Affiliates (collectively "Representatives"), who, in
each case, need to know any such Information for purposes of the
implementation and performance by the Recipient of this
Agreement, and will use the Information provided by the
Disclosing Party only for such limited purposes.
(b) Warranty of Obligation. Each Party warrants that each of
its Representatives to whom any Information provided by the
Disclosing Party is
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
45
revealed shall previously have been informed of the confidential
nature of the Information and shall have agreed to be bound by
the terms and conditions of this Agreement applicable to the
Recipient. The Recipient shall ensure that the Information
provided by the Disclosing Party is not used or disclosed by such
Representatives except as permitted by this Agreement and shall
be responsible for any breach of this Agreement.
(c) Ownership of Information. All Information shall remain
the property of the Disclosing Party. Upon the written request
of the Disclosing Party (i) all tangible Information provided by
the Disclosing Party (including all copies thereof and all unused
samples) except for Information consisting of analysis, studies
and other documents prepared by or for the benefit of the
Recipient, shall be promptly returned to the Disclosing Party,
and (ii) all portions of such analysis, studies and other
documents prepared by or for the benefit of the Recipient
(including all copies thereof) which are within the definition of
Information shall be destroyed, with such destruction certified
in writing to the Disclosing Party by the Recipient; provided
however, a Party may retain Information of the other Party that
is necessary or useful for the making, using or selling of
Ribozyme Products or Non-Ribozyme Products.
(d) Obligation of Confidentiality. The obligations of
confidentiality and non-use set forth in this Agreement shall not
apply to any portion of the Information which:
(i) is or becomes public or available to
the general public otherwise than through the act or
default of the Recipient or its Representatives; or
(ii) is obtained by the Recipient from a
Third Party who is lawfully in possession of such
Information and Is not subject to an obligation of
confidentiality or non-use owed to the Disclosing
Party or others; or
(iii) is previously known to the Recipient
prior to disclosure to the Recipient by the
Disclosing Party under this Agreement, as shown by
written evidence, and is not obtained or derived
directly or indirectly from the Disclosing Party; or
(iv) is disclosed by the Recipient
pursuant to the requirement of law, provided that
the Recipient has complied with the provisions set
forth In this Section XIV; or
(v) is independently developed by
Recipient without the use of or reliance on any
Information provided by the Disclosing Party
hereunder, as shown by contemporaneous written
evidence.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
46
(e) Legal Disclosure or Disclosure to Investment Bankers. If
the Recipient becomes legally required to disclose any
Information provided by the Disclosing Party, or if Recipient
wishes to disclose Information to investment bankers the
Recipient will give the Disclosing Party prompt notice of such
fact so that the Disclosing Party may (i) obtain a protective
order or other appropriate remedy concerning any such disclosure
and/or waive compliance with the non-disclosure provision of this
Agreement or (ii) discuss such proposed disclosure with
Recipient. Recipient will reasonably cooperate with the
Disclosing Party in connection with the Disclosing Party's
request for changes to the proposed disclosure. If any such
order or other remedy does not fully preclude disclosure or the
Disclosing Party waives such compliance, Recipient will make such
disclosure only to the extent that such disclosure is legally
required and will use its reasonable efforts to have confidential
treatment according to the disclosed Information or with respect
to disclosure to investment bankers ensure that such investment
bankers enter into confidentiality agreements with the Disclosing
Party prior to the Recipient making such disclosure.
(f) No Warranty As To Reliability. Each of the Parties
acknowledges that neither Party makes any representation or
warranty as to the reliability, accuracy or completeness of any
of the Information, except for any specific representation or
warranty made in other sections of this Agreement. Recipient
agrees that neither the Disclosing Party nor any of the
Disclosing Party's Representatives shall have any liability to
Recipient arising from the Information provided by the Disclosing
Party except as otherwise provided herein.
(g) No Implied License. Except as otherwise set forth in this
Agreement, nothing herein shall be construed as giving Recipient
any right, title, interest in or ownership of the Information
provided by the Disclosing Party, and with respect to any portion
thereof which is or becomes public information and is now or
hereafter becomes covered by any patent, Recipient's rights with
respect thereto shall be subject to all rights of the patent
owner and/or licenses.
(h) Public Domain. For the purpose of this Agreement,
specific Information disclosed as part of Information shall not
be deemed to be in the public domain or in the prior possession
of Recipient merely because it is embraced by more general
information in the public domain or by more general information
in the prior possession of Recipient.
14.2 Publications. The Research Committee will discuss and review proposed
publications describing the scientific results of the Research Plan.
Either Party may, in its sole discretion, decide not to permit
publication by the other Party of any scientific results related to the
Developed Technology. Such permission shall not be unreasonable
withheld. Authorship of publications shall be determined by custom and
practice in the scientific community.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
47
XV
REPRESENTATIONS AND WARRANTIES OF RPI
15.1 RPI represents and warrants to Schering as follows:
(a) Organization. It is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(b) Authority. It has full corporate power and authority to
execute and deliver this Agreement and the other agreements and
Instruments to be executed and delivered by RPI pursuant hereto
and to consummate the transactions contemplated hereby and
thereby. All corporate acts and other proceedings required to be
taken to authorize such execution, delivery, and consummation
have been duly and properly taken and obtained.
(c) Enforceability. This Agreement has been duly executed and
delivered by RPI and constitutes, and such other agreements and
instruments contemplated hereby or in connection herewith when
duly executed and delivered by RPI will constitute, legal, valid,
and binding obligations of RPI enforceable against RPI in
accordance with their respective terms.
(d) Approvals, Consents, Etc. No approval, authorization,
consent, order, action, or filing with any court, administrative
agency or other governmental authority is required for the
execution and delivery by RPI of this Agreement and the execution
and delivery by RPI of such other agreements and instruments or
the consummation.
(e) No Conflicts. None of the execution, delivery, or
performance of this Agreement or the other agreements and
instruments to be executed and delivered by RPI (i) conflicts
with or results in a breach under the charter documents or any
material contractual undertaking of RPI or its Affiliates, (ii)
conflicts with or results in a violation of any of the laws of
the jurisdiction of incorporation of RPI, or conflicts with any
agreements among the following parties: University Patents, Inc.,
University of Colorado Foundation, Inc., United States
Biochemical Corporation, University Research Corporation,
University Technology Corporation, National Institutes of Health,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Medical Institute, University of Colorado, CTI and
Chiron Corporation. RPI will not knowingly enter into any
written or oral agreement after the Effective Date that would be
inconsistent with its obligations under this Agreement or deprive
Schering of the benefits of this Agreement.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
48
(f) Title. As of the Effective Date, it has good title to or
valid leases or licenses for all its properties, rights, and
assets necessary for the fulfillment of its obligations and
responsibilities under this Agreement.
(g) Patent Infringement. To the best of RPI's knowledge, as
of the Effective Date, and except as disclosed to Schering as of
the Effective Date it is not aware of any patent or other
intellectual property right of any other person that would be
infringed by the research contemplated under the Research Plan.
(h) Sufficient Rights. Except as stated in Exhibit 15.1(h)
listing licenses and excluded sequences, pathways, physically
contiguous sequences and currently active RPI internal programs
as of the Effective Date, it owns or possesses adequate licenses
or other rights to use all patents, patent rights, inventions,
and know-how including an exclusive license to the Cech Patents
and Ribozyme Technology to conduct research, to grant rights and
licenses granted herein to Schering, and to fulfill its other
duties and obligations pursuant to this Agreement. To the
knowledge of RPI, as of the Effective Date the rights and
licenses granted to Schering hereunder do not violate the RPI
licenses to the Cech Patents and Ribozyme Technology or the
rights of any Third Party to which RPI has granted a license.
RPI has not, to the best of its knowledge as of the Effective
Date, entered into any contract, agreement, or other arrangement
with a Third Party inconsistent with this Agreement.
i) Licenses to the Cech Patents and Ribozyme Technology. It
has fully complied, and will use its best efforts to remain in
material compliance with, and is not in breach of, and this
Agreement will not materially breach, any terms, conditions or
obligations of all the RPI licenses to the Cech Patents and
Ribozyme Technology.
(j) No Prior Grant or Patents. As of the Effective Date, and
except as listed in Exhibit 15.1(j) RPI has not (i) knowingly
granted any licenses to Third Parties, or (ii) filed any patent
application inconsistent with the licenses granted to Schering
pursuant to Section VI or (iii) granted any licenses to Third
Parties inconsistent to Section 6.8(b).
(k) No Sublicense Royalties Under RPI Base Technology. As of
the Effective Date, and except as provided in Exhibit 15.1(k)
there are no licenses in the RPI Base Technology that would
require Schering to pay a royalty to make, have made, use, sell,
offer to sell and import Ribozyme Products and Non-Ribozyme
Products between RPI and Third Parties.
(l) Hypothecation Of Cech Patents. As of the Effective Date,
the Cech Patents are not available for hypothecation to Schering.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
49
(m) Broad Pathway Licenses. Other than as listed in Exhibit
15.1(m) there are no Third Parties other than Chiron Corporation
to whom RPI granted broad pathway or physically contiguous
licenses that could claim rights to a Designated Schering
Sequence or Ribozyme Product. Furthermore, RPI represents it
will use its best efforts to renegotiate such broad pathway
license with Chiron.
(n) Purchase Agreement. The representations and warranties
made in Article IV of the Purchase Agreement are true and correct
and are incorporated herein by reference.
XVI
REPRESENTATIONS AND WARRANTIES OF SCHERING
16.1 Schering represents and warrants to RPI as follows:
(a) Organization. It is a corporation duly organized and
validly existing under the laws of Germany.
(b) Authority. It has full corporate power and authority to
execute and deliver this Agreement and the other agreements and
instruments to be executed and delivered by Schering pursuant
hereto and to consummate the transactions contemplated hereby and
thereby. All corporate acts and other proceedings required to be
taken to authorize such execution, delivery, and consummation
have been duly and properly taken and obtained.
(c) Enforceability. This Agreement has been duly executed and
delivered by Schering and constitutes, and such other agreements
and instruments when duly executed and delivered by Schering will
constitute, legal, valid, and binding obligations of Schering
enforceable against Schering in accordance with their respective
terms.
(d) Approvals, Consents, Etc. No approval, authorization,
consent, or other order or action of or filing with any court,
administrative agency or other governmental authority is required
for the execution and delivery by Schering of this Agreement and
the execution and delivery by Schering of such other agreements
and instruments or the consummation by Schering of the
transactions contemplated hereby or thereby.
(e) No Conflicts. None of the execution, delivery, or
performance of this Agreement or the other agreements and
instruments to be executed and delivered by Schering, (i)
conflict with (or will conflict with) or result in a breach under
(or will result in a breach under) the charter documents or any
material contractual undertaking of Schering or (ii) conflict
with (or will conflict with) or result in a
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
50
violation of (or will result in a violation of) any of the laws
of the jurisdiction of incorporation of Schering.
(f) Title. As of the Effective Date, it has good title to or
valid leases or licenses for all its properties, rights, and
assets necessary for the fulfillment of its obligations and
responsibilities under this Agreement.
16.2 Disclaimer. Schering and RPI specifically disclaim any guarantee that
the research will be successful, in whole or in part. The failure of
the Parties to successfully research and develop Ribozyme Products or
Non-Ribozyme Products will not constitute a breach of any representation
or warranty or other obligation under this Agreement. Neither Schering
nor RPI makes any representation or warranty or guarantee that the
Research Plan will be sufficient for the successful completion of the
research. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
RPI AND SCHERING MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR
CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
DEVELOPED TECHNOLOGY, RIBOZYME PRODUCTS AND NON-RIBOZYME PRODUCTS
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, VALIDITY OF RPI BASE OR SCHERING BASE
TECHNOLOGY, PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
XVII
SURVIVAL AND INDEMNIFICATION
17.1 Survival of Representations, Warranties, Covenants, and Agreements. The
representations, warranties, covenants, and agreements contained in this
Agreement, and in other agreements and instruments to be executed and
delivered by the Parties pursuant to this Agreement, shall survive the
Term and the completion of the other actions set forth herein and shall
remain in full force and effect. Except as expressly provided herein,
the representations, warranties, covenants, and agreements contained
herein, and in the other agreements and instruments to be executed and
delivered by the Parties hereto confirm that they have not relied upon
any other representations, warranties, covenants, and agreements as an
inducement to enter into this Agreement or the other agreements and
instruments to be executed and delivered by the Parties pursuant to this
Agreement.
17.2 Indemnification By RPI. RPI hereby agrees to indemnify and hold
Schering, its Affiliates and their respective officers, directors,
stockholders, employees, agents, and representatives (collectively, the
"Schering Indemnities") harmless on an after-tax basis from and against
any and all claims, liabilities, losses, damages, costs and expenses in
respect of claims against the Schering Indemnities by parties other than
the Schering Indemnities, including fees and disbursements of counsel
and expenses of reasonable investigation (collectively, "Schering
Losses"), arising out of, based upon or caused by: (i) the inaccuracy of
any representation or the breach of any warranty, covenant or agreement
of RPI contained in
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
51
this Agreement or in any other agreement or instrument delivered by RPI
pursuant to this Agreement; (ii) any negligence or intentional
wrongdoing in the research conducted by RPI, its Affiliates or
designees; or (iii) any act, method, or other technology employed by RPI
in producing, using, or researching that violates any Third Party or any
licenses to the Cech Patents and Ribozyme Technology entered by RPI
prior to the Effective Date or during the Term, (iv) the manufacture of
Exogenous Ribozyme Products, or (v) the development, pre-clinical
testing, and clinical testing, manufacture, sale and/or use (including,
but not limited to product liability claims) of any Ribozyme Product or
Non-Ribozyme Products made, used or distributed by RPI or its licensees
in the event RPI proceeds with the development and marketing of any
Ribozyme or Non-Ribozyme Product pursuant to Section 6.7 (except in each
case to the extent that any Schering Loss is due to the negligence or
willful misconduct of Schering Indemnities).
17.3 Indemnification By Schering. Schering hereby agrees to indemnify and
hold RPI, its Affiliates, subcontractors and their respective officers,
directors, stockholders, employees, agents, and representatives
(collectively, the RPI Indemnities") harmless on an after-tax basis from
and against any and all claims, liabilities, losses, damages, costs and
expenses in respect of claims against the RPI Indemnities by parties
other than the RPI Indemnities, including fees and disbursements of
counsel and expenses of reasonable investigation (collectively, "RPI
Losses"), arising out of, based upon or caused by: (i) the inaccuracy of
any representation or the breach of any warranty, covenant or agreement
of Schering contained in this Agreement or in any other agreement or
instrument delivered by Schering pursuant to this Agreement; (ii) any
negligence or intentional wrongdoing in the research conducted by
Schering, its Affiliates or designees; or (iii) the development, pre-
clinical and clinical testing, manufacture, (except for Exogenous
Ribozymes manufactured by RPI and its contractors, distribution,) sale
and/or use (including but not limited to product liability claims) of
any Ribozyme Product or Non-Ribozyme Product made, used or distributed
by Schering or its licensees (except in each case to the extent that any
RPI Loss is due to the negligence or willful misconduct of RPI
Indemnities).
17.4 Notices, Etc. Each indemnified party agrees to give the indemnifying
party prompt written notice of any action, claim, demand, discovery of
fact, proceeding or suit (collectively, "Claims") for which such
indemnified party intends to assert a right to indemnification under
this Agreement; provided however, that failure to give such notification
shall not affect the indemnified party's entitlement to indemnification
hereunder except to the extent that the indemnifying party shall have
been prejudiced as a result of such failure. The indemnifying party
shall have the initial right (but not the obligation) to defend, settle
or otherwise dispose of any Claim for which the indemnified party
intends to assert a right to indemnification under this Agreement as
contemplated in the preceding sentence if and so long as the
indemnifying party has recognized in a written notice to the indemnified
party provided within thirty (30) days of such written notice its
obligation to indemnify the indemnified party for any RPI Losses or
Schering Losses (as the case may be) relating to such Claim, provided
however, that the indemnifying party shall obtain the written consent
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
52
of the indemnified party prior to ceasing to defend, settling or
otherwise disposing of any Claim. If the indemnifying party fails to
state in a written notice during such thirty (30) day period its
willingness to assure the defense of such a Claim, the RPI or Schering
Indemnity, as the case may be, shall have the right to defend, settle or
otherwise dispose of such claim, subject to the applicable provisions of
17.2 and 17.3 above.
17.5 Environmental Indemnification; Permits. Notwithstanding any other
indemnification obligation in this Agreement, and in addition to any
rights the Parties may have under relevant federal, state, or local
statutory and common laws, RPI shall indemnify and hold harmless
Schering and its Affiliates from and against any and all claims, acts,
investigation costs, response costs, losses, damages, and any other
costs and expenses (including attorney and consulting fees)
(collectively "Environmental Costs") incurred solely as a result of
Environmental Matters; provided however, this indemnification does not
apply to the extent such Environmental Costs are attributable to the
negligence or willful misconduct of Schering or its Affiliates or
Sublicensees.
17.6 "Environmental Matters" are:
(a) The operation by RPI or its Affiliates in the performance
of the Research Plan, or any entity which provides services
relating to the Research Plan under a subcontracting arrangement
with RPI or its Affiliates, in a manner that is not in material
compliance with and in violation of any applicable Environmental
Law as defined herein.
(b) Any action by RPI in violation of applicable Environmental
Laws where (i) there has been a release of Hazardous Materials
into the environment; or (ii) Hazardous Materials have been
Disposed of at a site in violation of applicable Environmental
Laws as the term "Disposed" is defined in applicable
Environmental Laws.
(c) Any failure by RPI during the Term of this Agreement to
obtain and/or maintain in full force and effect all permits
required under the applicable Environmental Laws, in the form
required by permitting authorities in light of this Agreement,
for any operation of any RPI facility or site.
(d) Any negligent or intentional failure by RPI to provide all
notices, required by Environmental Laws for the lawful operation
of any RPI facility or site.
(e) Any other actual or alleged negligent or intentional acts
or omissions by RPI relating to the improper handling or improper
disposal of Hazardous Materials at any RPI facility or site.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
53
XVIII
TERM, TERMINATION, AND EXPIRATION
18.1 Term. Unless earlier terminated the Term of this Agreement is five (5)
years from the Effective Date (the "Term"), renewable by mutual
agreement between the Parties. The licenses granted herein shall be
effective as of the Effective Date, and unless terminated earlier as
provided in this Section 18 shall continue in full force and effect on a
country-by-country basis and a product-by-product basis until Schering
or RPI has no remaining Royalty or royalty obligations in a country, at
which time this Agreement shall terminate in such country, and Schering
or RPI shall have fully paid up licenses.
18.2 Termination.
(a) Breach. If either Party breaches, or defaults in the
performance of, or fails to be in compliance with, any material
warranty, representation, agreement or covenant of this
Agreement, including any payment obligations, and such default or
noncompliance shall not have been substantially remedied, or
steps initiated to substantially remedy the same to the other
Party's reasonable satisfaction, within sixty (60) days after
receipt by the defaulting Party of a written notice thereof and
demand to cure such default from the other Party, then the Party
not in default may terminate this Agreement.
(b) Bankruptcy. Either Party may terminate this Agreement or
the licenses granted by such Party, if, at any time, the other
Party shall file in any court pursuant to any statute, a petition
in bankruptcy or insolvency or for reorganization in bankruptcy
or for an arrangement or for the appointment of a receiver or
trustee of such Party or of its assets, or if such Party proposes
a written agreement of composition or extension of its debts, or
if such Party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such petition
shall not be dismissed within sixty (60) days after the filing
thereof, or if such Party shall propose or be a party to any
dissolution, or if such Party shall make an assignment for the
benefit of creditors.
(c) Unresolved Chairmen Dispute. In the event any dispute
submitted to the Chairman of Berlex and the Chairman of RPI
pursuant to Section 4.5 cannot be resolved, either Party may
terminate this Agreement on ninety (90) days written notice to
the other Party.
(d) Change in Control. Schering may terminate this Agreement
in the event there is a Change in Control during the Term.
(e) Rights in Law or Equity. Except as otherwise expressly
provided herein, termination by either Party pursuant to this
Section 18 shall not prejudice any other remedy that a Party
might have in law or equity, except that neither Party may claim
compensation for lost opportunity or like consequential damages
arising out of the fact of such termination.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
54
(f) Schering Unilateral Right to Terminate. At any time after
one (1) year from the Effective Date Schering may terminate this
Agreement for any reason or no reason.
18.3 Effect of Breach or Termination.
(a) Accrued Obligations. Termination of this Agreement for any
reason shall not release any Party hereto from any liability which, at
the time of such termination, has already accrued to the other Party or
which is attributable to a period prior to such termination nor preclude
either Party from pursuing all rights and remedies it may have hereunder
or at law or in equity with respect to any breach of this Agreement.
(b) Return of Materials. Upon any termination of this Agreement,
Schering and RPI shall promptly return to the other Party all
Information received from the other Party (except for one copy which may
be retained for archival purposes).
(c) Licenses.
(i) Termination by RPI.
(a) Termination Pursuant to Sections
18.2(a). In the event of termination by RPI under
Section 18.2(a) following a determination pursuant
to Section 18.2(a) of a material breach of this
Agreement by Schering, except for Section 6.6 the
licenses granted by Schering to RPI shall remain in
effect. The licenses granted hereunder to Schering
shall remain in effect, subject to the terms and
conditions of this Agreement until a full and final
judgment concerning such breach by a court of
competent jurisdiction; provided that if in such
judgment Schering is found to have been in material
breach, the licenses granted to Schering with
respect to such material breach shall terminate.
(b) Termination Pursuant to Section
18.2(b). In the event of termination by RPI
pursuant to Section 18.2(b) above, any licenses
granted by RPI to Schering and its Sublicensees
shall terminate concurrently, and any licenses
granted by Schering hereunder shall remain in
effect, subject to the terms and conditions of this
Agreement.
(c) Termination Pursuant to Section
18.2(c). In the event of termination by RPI
pursuant to Section 18.2(c) above, any licenses
granted by RPI to Schering and its Sublicensees and
by Schering to RPI and its Sublicensees shall
terminate concurrently.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
55
(ii) Termination by Schering.
(a) Termination Pursuant to Section
18.2(a) or (b). In the event of any termination by
Schering pursuant to Section 18.2(a) or (b) above,
the licenses granted by RPI shall remain in effect.
Any licenses granted by Schering hereunder shall
terminate concurrently, and any licenses granted by
RPI shall remain in effect, subject to the terms
and conditions of this Agreement;
(b) Termination Pursuant to Section
18.2(d). In the event of any termination by
Schering pursuant to Section 18.2(d) above, any
licenses granted by Schering to RPI shall terminate
and any licenses granted by RPI to Schering shall
remain in effect, subject to the terms and
conditions of this Agreement;
(c) Termination Pursuant to Section
18.2(f). In the event of a termination by Schering
pursuant to Section 18.2(f), except for any
Ribozyme Products or Non-Ribozyme Products already
being sold commercially by Schering, all licenses
granted by RPI to Schering pursuant to this
Agreement shall terminate. Furthermore, RPI shall
have no further obligation to conduct research
pursuant to this Agreement, and, provided that RPI
has provided Schering with a final written report
concerning the research done pursuant to the
Research Plan, within ninety (90) days of the
written notice sent by Schering pursuant to Section
18.2(f) Schering shall pay RPI a winddown payment
of Two Million Dollars (US$2,000,000.00).
(d) Termination Pursuant to Section
18.2(c). In the event of termination by Schering
pursuant to Section 18.2(c) above, any licenses
granted by RPI to Schering and its Sublicensees and
by Schering to RPI and its Sublicensees shall
terminate concurrently.
ARTICLE XIX
MISCELLANEOUS
19.1 Assignment. (a) Either Party may assign any of its rights or
obligations under this Agreement in any country to any Affiliates and
may delegate its obligations under this Agreement in any country to any
of its Affiliates; provided however, that such assignment or delegation
shall not relieve the assigning Party of its responsibilities for
performance of its obligations under this Agreement.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
56
(b) Neither Party may assign its rights or obligations under
this Agreement to a non-Affiliate without the prior written
consent of the other Party, except in connection with a merger or
similar reorganization or the sale of all or substantially all of
its assets. Except as provided in Section 18.2(d), this
Agreement shall survive any such merger or reorganization of
either Party with or into, or such sale of assets to, another
party and no consent for such merger, reorganization or sale
shall be needed, and no intellectual property rights of the
acquiring corporation shall be included in the technology
licensed hereunder; provided, that in the event of such merger,
reorganization or sale, no intellectual property rights of the
acquiring corporation shall be included in the technology
licensed hereunder.
(c) This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the Parties.
Any assignment not in accordance with this Agreement shall be
void.
19.2 Retained Rights. Nothing in this Agreement shall limit in any respect
the right of either Party to conduct research and development and to
market products using such Party's technology other than as herein
expressly provided.
19.3 Consents Not Unreasonably Withheld or Delayed. Whenever provision is
made in this Agreement for either Party to secure the consent or
approval of the other, that consent or approval shall not unreasonably
be withheld or delayed, even when not so expressly stated, and whenever
in this Agreement provision is made for one Party to object to or
disapprove a matter, such objection or disapproval shall not
unreasonably be exercised, even when not so expressly stated.
19.4 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by
government action, war, fire, explosion, flood, strike, lockout,
embargo, act of God, or any other cause beyond the control of the
defaulting Party, provided that the Party claiming force majeure has
extended all reasonable efforts to avoid or remedy such force majeure
and has given the other Party prompt notice describing such event, the
effect thereof and the actions being taken to avoid or remedy such force
majeure; provided however, that in no event shall a Party be required to
settle any labor dispute or disturbance.
19.5 Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent
of this Agreement.
19.6 No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by the Agreement to use in any manner the
name "Ribozyme Pharmaceuticals, Inc.," "RPI," "Schering," or any other
trade name or trademark of the other Party or its Affiliates in
connection with the performance of the Agreement.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
57
19.7 Notices. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return
receipt requested), postage prepaid, or sent by express courier service,
to the Parties at the following addresses (or at such other address for
a Party as shall be specified by like notice; provided that notices of a
change of address shall be effective only upon receipt thereof).
If to RPI: If to Schering AG:
Ribozyme Pharmaceuticals, Inc. Schering AG
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Mullerstrasse, 170-178
Boulder, Colorado 80301 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: Legal Department
Telecopy (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy 49,30,4681-4086
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
58
With a copy to:
Berlex Biosciences
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Legal Department
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
19.8 Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a
continuing, waiver of same or any other of such Party's rights or
remedies provided in this Agreement.
19.9 Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstances shall, to any
extent or in any country or in the European Union, be held to be invalid
or unenforceable, then (i) the remainder of this Agreement, or the
application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the
fullest extent permitted by law; and (ii) the Parties hereto covenant
and agree to re-negotiate any such term, covenant or application thereof
in good faith in order to provide a reasonably acceptable alternative to
the term, covenant or condition of this Agreement or the application
thereof that is invalid or unenforceable, it being the intent of the
Parties that the basic purposes of this Agreement are to be effectuated.
19.10 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed
to have authored the ambiguous provision.
19.11 Governing Law. This Agreement shall be governed by and interpreted
under the laws of New York.
19.12 Headings. The sections and paragraph headings contained herein are for
the purposes of convenience only and are not intended to define or limit
the contents of said sections or paragraphs.
19.13 Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
19.14 Entire Agreement; Amendments. This Agreement, the Purchase Agreement
including, all Exhibits and Schedules attached hereto and thereto, and
all documents delivered con
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
59
currently herewith and therewith, set forth all the covenants, promises,
agreements, warranties, representations, conditions and understandings
between the Parties. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral
or written, between the Parties other than as set forth herein and
therein. No subsequent alteration, amendment, change or addition to
this Agreement or the Purchase Agreement shall be binding upon the
Parties hereto unless reduced to writing and signed by the respective
authorized officers of the Parties.
19.15 Independent Contractors. The status of the Parties under this Agreement
shall be that of independent contractors. Neither Party shall have the
right to enter into any agreements on behalf of the other Party, nor
shall it represent to any person that it has any such right or
authority. Nothing in this Agreement shall be construed as establishing
a partnership or joint venture relationship between the Parties.
19.16 Negation of Agency. Nothing herein contained shall be deemed to create
an agency, joint venture, amalgamation, partnership, or similar
relationship between Schering and RPI. The relationship between the
Parties established by this Agreement is that of independent
contractors.
19.17 Publicity. No public announcement concerning the existence or the terms
of this Agreement shall be made, either directly or indirectly, by RPI
or Schering, except as may be legally required by applicable laws,
regulations, or judicial order, without first obtaining the approval of
the other Party and agreement upon the nature, text, and timing of such
announcement, which approval and agreement shall not be unreasonably
withheld. The Party desiring to make any such public announcement shall
provide the other Party with a written copy of the proposed announcement
in sufficient time prior to public release to allow such other Party to
comment upon such announcement, prior to public release. Neither Party
shall issue any press release or make any public announcement which
includes or otherwise uses the name of the other Party in any public
statement or document except with the prior written consent of such
Party.
19.18 Registration and Filing of the Agreement. To the extent, if any, that a
Party concludes in good faith that it is required to file or register
this Agreement or a notification thereof with any governmental
authority, including without limitation the U.S. Securities and
Exchange Commission and the Competition Directorate of the Commission of
the European Communities, in accordance with applicable laws and
regulations, such Party may do so, and the other Party shall cooperate
in such filing or notification and shall execute all documents
reasonably required in connection therewith at the expense of the
requesting party. The Parties shall promptly inform each other as to
the activities or inquiries of any such governmental authority relating
to this Agreement, and shall cooperate to respond to a request for
further information therefrom at the expense of the requesting party.
19.19 Beneficiaries. No person, other than Schering or RPI and their
permitted assignees hereunder, shall be deemed an intended beneficiary
hereunder or have any right to enforce any obligation of this Agreement.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
60
19.20 Affiliates of Parties. Each Party may perform its obligations hereunder
personally or through one or more Affiliates and shall be responsible
for the performance of such obligations, and any liabilities resulting
therefrom. Neither Party shall permit any of its Affiliates to commit
any act (including any act of omission) which such Party is prohibited
hereunder from committing directly.
19.21 Compliance with Laws. In exercising their rights under this Agreement,
the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body
having jurisdiction over the exercise of rights under this Agreement.
19.22 Patent Marking. Schering agrees to ▇▇▇▇ and have its Affiliates and
Sublicensees ▇▇▇▇ all Products and Other Products sold pursuant to this
Agreement in accordance with the applicable statute or regulations
relating to patent marking in the country or countries of manufacture
and sale thereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
duly authorized representatives as of the Effective Date.
SCHERING AKTIENGESELLSCHAFT RIBOZYME PHARMACEUTICALS
INCORPORATED
By: By:
--------------------------------- --------------------------------
Name: Name:
------------------------------- ------------------------------
Title: Title:
------------------------------ -----------------------------
Date: Date:
------------------------------- ------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
61
EXHIBIT A
THIS CONVERTIBLE LOAN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED (OTHER THAN PURSUANT
TO RULE 144 OR ANY SIMILAR OR ANALOGOUS RULE OR RULES) EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
FORM OF CONVERTIBLE LOAN NOTE
[ ] New York, New York
April 9, 1997
FOR VALUE RECEIVED, the undersigned, RIBOZYME PHARMACEUTICALS, INC., a
Delaware corporation (the "Company"), hereby promises to pay to SCHERING
AKTIENGESELLSCHAFT, a German corporation (the "Note Purchaser"), or its
registered assigns, on the Maturity Date (as defined in the Purchase Agreement
dated as of April 9, 1997 among the Company, Schering Berlin Venture
Corporation and the Note Purchaser, as the same may be amended, modified,
extended or restated from time to time, the "Purchase Agreement"), the lesser
of the principal sum of [ ]and the aggregate unpaid principal amount of all
Loans made by the Note Purchaser to the Company pursuant to the Purchase
Agreement, in lawful money of the United Sates of America in same day funds,
and to pay interest from the date hereof on such principal amount from time to
time outstanding, in like funds, at a rate of [ ]per annum (computed on the
basis of a 360-day year of twelve 30-day months) payable on the Maturity Date.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to such terms in the Purchase Agreement.
The Company promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at a rate of per annum.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
62
All Loans evidenced by this Convertible Loan Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule attached
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder in
its internal records; provided, however, that any failure of the holder hereof
to make such a notation or any error in such notation shall not in any manner
affect the obligation of the Company to make payments of principal and interest
in accordance with the terms of this Convertible Loan Note and the Purchase
Agreement.
This Convertible Loan Note is the Convertible Loan Note referred to in
the Purchase Agreement which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
the offset at the discretion of the Note Purchaser of certain Milestone
Payments due and payable to the Company from the Note Purchaser pursuant to
Article VIII of the Research Agreement against amounts owed hereunder, and for
the amendment or waiver of certain provisions of the Purchase Agreement, all
upon the terms and conditions therein specified.
The Note Purchaser may, at its option, convert all or part of the unpaid
principal amount hereunder and accrued interest thereon into Common Stock in
accordance with the terms of the Purchase Agreement.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
63
THIS CONVERTIBLE LOAN NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.
RIBOZYME PHARMACEUTICALS, INC.,
by:
--------------------------------
Name:
Title:
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
64
Loans and Payments
Unpaid
Principal
Payments of Balance Name of Person
Date Amount of Loan Principal/Interest of Note Making Notation
---- -------------- ------------------ ------- ---------------
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
65
Exhibit 1
Purchase Agreement
April 9, 1997
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
66
Exhibit 2
Expenses for COGS
Expenses included in, but not limited to, the Party's manufacturing cost:
1. Direct materials
2. Salaries, wages and benefits of personnel directly engaged in
manufacturing the product.
3. Overhead associated with direct production, including, but not limited
to:
a. Depreciation, leasehold improvements and equipment leases
b. Repair and maintenance
c. Manufacturing supplies
4. Reasonable allocable general manufacturing overhead,
a. Manufacturing Administration
b. Materials Management
c. Validation and Calibration
d. Documentation and Compliance
e. Quality Assurance/Quality Control
f. Technical Services
g. Regulatory Compliance
5. Reasonable allocable General facilities overhead, including, but not
limited to:
a. Rent, utilities, property tax, insurance and other assigned
general facilities' costs
b. Purchasing
c. Environmental Health and Safety
d. Management Information Systems
e. Engineering
f. Accounting
g. Human Resources
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
67
Exhibit 4.1
Schering/Ribozyme Pharmaceuticals Inc. Research Plan
Schering through its Affiliate Berlex Biosciences plans to use Ribozymes
generally and specifically in high throughput target validation. There are two
principal objectives in this Research Plan:
1. HIGH THROUGHPUT TARGET VALIDATION USING RIBOZYMES
The Parties we envisage proceeding with this in two phases:
Phase 1 - It is anticipated that Phase 1 will take approximately [ ] to
complete and will have two objectives:
(a) Validation of the Use of Ribozymes for target evaluation when only
partial sequence information is available for a target mRNA. This will
be examined using synthetic Ribozymes administered to cells with lipid
based delivery vehicles. This work will be performed at RPI. Ribozymes
with demonstrated catalytic activity will be sent to Schering and their
effects evaluated in cell based functional assays.
(b) Validation of the use of retroviral vectors for high throughput
endogenous delivery of Ribozymes to cells and target evaluation using
cell based functional assays. This work will be performed initially at
Schering [ ].
Phase 2 will proceed with the use of retroviral vector delivery (Option 1) in a
high throughput manner for gene function analysis using target sequences
identified from existing data bases, by differential subtraction, or by
expression profiling. Alternatively, Option 2 will be pursued using exogenous
delivery of synthetic Ribozymes in a high throughput manner. [ ].
2. CONTRACT SYNTHESIS OF RIBOZYMES SELECTED BY SCHERING
RPI will design and synthesize plasmid or synthetic based Ribozymes for targets
selected by Schering. Target sequences identified from full length ▇▇▇▇▇▇▇▇
▇▇▇▇ will be chosen by Schering. RPI will allocate to this project for the
duration of the contract.
<
Basic Plan
[ ]
/--------------------------/-----------------------------/-------.............>
▇▇▇▇▇ ▇▇ [ ] /--------------------------/ Assessment of use of synthetic
Ribozymes for target evaluation using
only partial sequence information
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ /--------------------------/ Validation of use of retroviral
vectors in high throughput delivery
of ribozymes
-------------------------------------.............>
▇▇▇▇▇ ▇ [ ] Target validation for newly
discovered target sequences
using retroviral based
delivery of ribozymes
[ ]
Contract ribozyme synthesis for Schering
Detailed Plan:
Objective 1: High Throughput Target Validation Using Ribozymes
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
68
At Schering's request, RPI will design Ribozymes.
Phase 1: (a) Use of synthetic Ribozymes for target validation using partial
target sequence information.
o [ ]
o [ ]
o [ ]
SCHERING Provides:
o A list of partial sequences of selected by searching existing
data bases or other sources.
o [ ]
RPI Provides:
o [ ]
o [ ]
o [ ]
o [ ]
o [ ]
Phase 1: (b) Validation of the use of retroviral vectors for high throughput
delivery of Ribozymes for target evaluation using cell based functional based
assays.
Ribozymes will be designated based upon partial sequence information derived
from data base sequence information or from mRNA subtraction or profiling
technologies. The synthetic Ribozymes with suitable restriction sites will be
cloned into retroviral vectors and used to transfect target cells in a high
throughput cell based functional assay. The target gene sequences defined by
Ribozymes responding positively in the cell based functional assays will be
pursued in secondary confirmatory assays. Schering will then decide whether to
implement this technology. [ ]
SCHERING Provides:
o Sequence information on Ribozymes that reduce the expression of
known target sequence genes (control target genes).
o High throughout cell based functional assays.
o A transient retroviral expression system.
o Controls to ensure that the targeted RNA is specifically cleaved.
RPI Provides:
Following the technology development at SCHERING the technology may be
transferred to RPI. In that event, RPI will provide the following:
o [ ]
o [ ]
o [ ]
o [ ]
Phase 2: High throughput assay for functional analysis of novel genes based on
partial or full length sequence information. [ ].
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
69
Option 1. Retroviral delivery of Ribozymes for high throughput functional
analyses of target genes. Contingent upon successful technology development
described in phase 1b of the research collaboration, and Schering's election to
pursue this approach with RPI the following will be provided:
SCHERING Provides:
o [ ]
RPI Provides:
o [ ]
o [ ]
o High throughput cell based functional assays.
The calculations of [ ] are based on the following:
1. [ ]
2. [ ]
3. [ ]
Option 2. If Schering elects not to pursue the use of [ ] with RPI, the [ ].
SCHERING Provides:
o [ ].
RPI Provides:
o [ ].
o [ ].
Objective 2: Contract Synthesis of Ribozymes Selected by Schering
[ ]
SCHERING Provides:
o [ ]
RPI Provides:
o [ ].
o [ ].
[ ].
[ ].
[ ].
[ ].
3. QUARTERLY REPORTS
Quarterly meetings and reports will be one of the vehicles by which
Berlex Biosciences will monitor the RPI collaboration on behalf of
Schering. Quarterly Reports prepared by RPI will be submitted to Berlex
no less than five (5) working days before the quarterly meeting. The
Quarterly Reports will include a description of:
o Results for previous quarter.
o The collaboration's progress with respect to Research Plan
Milestones and goals.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
70
Name, percent of time allocated to the Research Plan and expertise
of RPI scientists involved in the program.
o Resource expenditures for immediate and next quarter.
The anticipated allocation of resources and names of RPI
scientists, when available, planned to be involved in the program.
4. COMMUNICATION
o Quarterly Reviews
The Research Committee will meet once a quarter to review the
research activities from the quarterly report prepared by RPI.
The quarterly review provides an opportunity to review the
progress of the collaboration. A written set of goals will be
approved by the Research Committee within 15 days following the
Quarterly Review for the next quarter. The quarterly reviews
shall be held in January, April, July, and October. The review
shall be held at alternating sites, the first quarterly review to
be held at Berlex during July 1997.
Members of the Research Committee:
Schering: [ ], or their representatives.
RPI: Members to be named at the first organizational meeting.
o Monthly Meetings
In order to facilitate communication and collaboration between
project team scientists at Berlex and RPI, formal monthly
meetings between key scientists will take place via face-to-face
meetings at alternate sites or via video or teleconference to
review the progress of the research.
o Informal Contacts
Schering may informally contact any RPI scientist charging time
to the Research Plan during normal business hours.
5. STAFFING
In order to ▇▇▇▇▇▇ communication and monitor good faith effort, RPI
shall identify all scientists who are spending at least 75% of their
time on the research collaboration. Berlex shall be informed within ten
(10) working days any time a scientist spending more than 75% of his
time is added to or removed from the collaboration and a copy of the
added scientist's CV sent. It is anticipated that all scientists shall
work full time on the collaboration, unless the Research Committee
approves otherwise. Time shall only be charged for conducting bench
research according to the Research Plan; time shall not be charged for
administrative or oversight functions.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
71
Exhibit 5.1
List of Designated Schering Sequences
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
72
Exhibit 15.1(h)
Excluded Sequences and Pathway
[ ][ ]
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
73
Exhibit 15.1(j)
Licenses Granted by RPI to Third Parties
1. Collaboration Research, Development and Commercialization Agreement
between RPI and Chiron Corporation dated July 15, 1995.
2. Research and Development Collaboration Agreement between RPI and the
▇▇▇▇▇-▇▇▇▇▇ Division of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company dated as of April 19,
1993 as amended April 17, 1995 and February 8, 1996.
3. Agreement dated February 29, 1996 between RPI and Chiron Corporation.
4. Collaboration Agreement dated May 13, 1996 between RPI and Chiron
Corporation.
5. Memorandum of Understanding and Agreement dated March 1, 1996 between
RPI and DowElanco.
6. Letter Agreement dated May 22, 1996 between RPI and ALZA Corporation.
7. Research and Development Collaboration Agreement dated December 2, 1996
between RPI and Protogene Laboratories.
8. License Agreement dated February 14, 1997 between RPI and IntelliGene,
Ltd.
9. Research Collaboration and Licensing Agreement dated November 1, 1995
between RPI and Pharmacia Biotech, AB.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
74
Exhibit 15.1(k)
Third Party Sublicense Royalties
None - all sublicense royalties to Competitive Technologies, Inc. are payable
by RPI from the royalties it receives.
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.
75
Exhibit 15.1(m)
[ ]
Confidential portions ( [ ] ) have been omitted pursuant to regulation
240.25b-2(b) of the Securities Exchange Act of 1934 and have been filed
separately with the Commission.