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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 7, 2000
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RIBOZYME PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in charter)
Colorado 0-27914 34-1697351
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(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation
or organization)
2950 Wilderness Place, Boulder, Colorado 80301
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 449-6500
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N/A
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(Former name or former address, if changed since last report.)
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5. Other Events
The Form 8-K filed by Ribozyme Pharmaceuticals, Inc. (the "Company") on
February 8, 2000, is incorporated herein by reference.
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EXHIBITS
1.+ Securities Purchase Agreement dated January 7, 2000, among the
Company, Elan International Services, Ltd. and Elan Corporation, plc
2* License Agreement dated January 7, 2000, among Elan Pharmaceutical
Technologies (a division of Elan Corporation, plc), Elan Pharma
International Limited and Medizyme Pharmaceuticals Ltd.
3.+ Warrant dated January 7, 2000, issued to Elan International Services,
Ltd. to purchase up to 200,000 shares of the Company's common stock
4.+ Warrant dated January 7, 2000, issued to Elan International Services,
Ltd. to purchase up to 300,000 shares of the Company's common stock
5.+ Convertible Promissory Note dated January 7, 2000, from the Company to
Elan International Services, Ltd.
6* Subscription, Joint Development and Operating Agreement dated January
7, 2000, among the Company, Elan Corporation, plc, Elan Pharma
International Limited, Elan International Services, Ltd. and Medizyme
Pharmaceuticals Ltd.
-3-
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7.+ Funding Agreement dated January 7, 2000, among the Company, Elan
Pharmaceutical Technologies (a division of Elan Corporation, plc),
Elan Pharma International Limited and Elan International Services,
Ltd.
8* License Agreement dated January 7, 2000, between the Company and
Medizyme Pharmaceuticals Ltd.
9.+ Registration Rights Agreement dated January 7, 2000, between the
Company and Elan International Services, Ltd.
10.+ Registration Rights Agreement dated January 7, 2000, among the
Company, Elan International Services, Ltd. and Medizyme
Pharmaceuticals Ltd.
11.+ Certificate of Designations, Preferences and Rights of Series A
Preferred Stock and Series B Preferred Stock of the Company
12.+* Agreement dated January 31, 2000, between the Company and Avecia
Limited.
*Confidential treatment has been requested for portions of these agreements.
+Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RIBOZYME PHARMACEUTICALS, INC.
DATE: March 2, 2000 By: /s/ Dr. Ralph E. Christoffersen
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Dr. Ralph E. Christoffersen, President
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EXHIBIT 2
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.25B-2B OF THE SECURITIES EXCHANGE ACT OF 1934. [*] INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST AND IS FILED
SEPARATELY WITH THE COMMISSION.
Execution Copy 2
LICENSE AGREEMENT
BETWEEN
ELAN PHARMACEUTICAL TECHNOLOGIES
(a division of Elan Corporation, plc)
AND
ELAN PHARMA INTERNATIONAL LIMITED
AND
MEDIZYME PHARMACEUTICALS LTD.
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS........................................................... 1
2. ELAN LICENSE TO NEWCO................................................. 7
3. INTELLECTUAL PROPERTY................................................. 9
4. NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY............................. 9
5. FINANCIAL PROVISIONS.................................................. 10
6. RIGHT OF INSPECTION AND AUDIT......................................... 12
7. REPRESENTATIONS AND WARRANTIES........................................ 13
8. TERM AND TERMINATION.................................................. 15
9. CONFIDENTIAL INFORMATION.............................................. 17
10. GOVERNING LAW AND JURISDICTION; ARBITRATION........................... 19
11. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE.......................... 21
12. ASSIGNMENT............................................................ 21
13. NOTICES............................................................... 21
14. MISCELLANEOUS......................................................... 23
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THIS AGREEMENT made this ___ day of January 2000
between:
(1) Elan Corporation, plc, a public limited company, acting through its
division Elan Pharmaceutical Technologies and having its registered office
at Lincoln House, Lincoln Place, Dublin 2, Ireland and Elan Pharma
International Limited a private limited company incorporated under the laws
of Ireland, and having its registered office at WIL House, Shannon Business
Park, Shannon, County Clare, Ireland; and
(2) Medizyme Pharmaceuticals Ltd., a Bermuda exempted limited liability company
incorporated under the laws of Bermuda and having its registered office at
Clarendon House, Church St., Hamilton, Bermuda.
.
RECITALS:
---------
A. Simultaneously herewith, RPI, Elan, EIS, and Newco (capitalized terms used
herein are defined below) are entering into the JDOA for the purpose of
recording the terms and conditions of the joint venture and of regulating
their relationship with each other and certain aspects of the affairs of,
and their dealings with Newco.
B. Newco desires to enter into this Agreement with Elan so as to permit Newco
to utilize the Elan Intellectual Property in making, having made,
importing, using, offering for sale and selling the Products in the Field
in the Territory.
C. Simultaneously herewith Newco and RPI are entering into the RPI License
Agreement relating to Newco's use of the RPI Intellectual Property.
Now, Therefore, the Parties agree as follows:
1. DEFINITIONS
1.1. In this Agreement unless the context otherwise requires:
"Affiliate" shall mean any corporation or entity controlling, controlled or
under the common control of Elan or RPI, as the case may be. For the
purpose of this definition, "control" shall mean direct or indirect
ownership of fifty percent (50%) or more of the stock or shares entitled to
vote for the election of directors. For purposes of this Agreement, Newco
is not an Affiliate of Elan or EIS.
"Agreement" shall mean this license agreement (which expression shall be
deemed to include the Recitals and Schedules hereto).
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Angiozyme(TM) shall mean a Ribozyme targeted against vascular endothelial
growth factor receptor (VEGF-R).
"Business Plan" shall have the meaning, as such term is defined in the
JDOA.
"Change of Control of RPI/Newco" shall mean circumstances where:
(i) a Technological Competitor of Elan shall, directly or indirectly,
acquire [ * ] or more of the voting stock of RPI or Newco, or
otherwise control or influence in any material respect their
management or business or otherwise have entered into any joint
venture, collaborative, license or other arrangement with RPI or
Newco, as the case may be, to such an extent that such a
Technological Competitor of Elan is materially engaged or involved
with the business or development of RPI or Newco, as the case may
be; or
(ii) a Strategic Investor shall, directly or indirectly, acquire [ * ] or
more of the voting stock of RPI or Newco, or otherwise control or
influence in any material respect their management or business, or
(iii) any person or entity other than a Strategic Investor shall, directly
or indirectly, acquire [ * ] or more of the then voting stock of RPI
or Newco, or otherwise merge, consolidate or enter into any similar
transaction (or binding agreement in respect thereof) with RPI or
Newco,
"Clause 4.1 System" shall mean the (a) the System, (b) Elan's bolus drug
delivery system having a drug reservoir volume of up to 1 ml. and a
delivery rate of between 1 second and 1 hour, and (c) Elan's basal drug
delivery system, which is an ambulatory subcutaneous infusion drug delivery
system and is capable of delivering factory pre-programmed continuous
amounts combined with incremental amounts of drug upon activation, either
manually or automatically, as set forth in Schedule 1A of this Agreement.
"Confidential Information" shall have the meaning, as such term is defined
in Clause 9.
"Definitive Documents" shall mean the definitive agreements relating to the
transactions including finance, stock purchase, research and license
agreements.
"EIS" shall mean Elan International Services, Limited, a Bermuda exempted
limited liability company incorporated under the laws of Bermuda and having
its registered office at St James Court, Flatts, Smiths, FL04 Bermuda.
"Elan" shall mean Elan, plc and EPIL, and their respective successors and
permitted assigns.
"Elan, plc" shall mean Elan Corporation, plc, a public limited company
incorporated
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under the laws of Ireland acting through its division Elan Pharmaceutical
Technologies.
"Effective Date" shall mean the date of this Agreement.
"Elan Improvements" shall mean any enhancement or improvement relating to
the System, developed (i) by Elan whether or not pursuant to the Project,
(ii) by Newco or RPI or by a third party (under contract with Newco)
pursuant to the Project, and/or (iii) jointly by any combination of Elan,
RPI or Newco pursuant to the Project, except as limited by agreements with
third parties.
Subject to third party agreements, Elan Improvements shall constitute part
of Elan Intellectual Property and be included in the license of the Elan
Intellectual Property pursuant to Clause 2.1 solely for the purposes set
forth therein. If the inclusion of a Elan Improvement in the license of
Elan Intellectual Property is restricted or limited by a third party
agreement, Elan shall use reasonable commercial efforts to minimize any
such restriction or limitation.
"Elan Intellectual Property" shall mean the Elan Know-How, the Elan Patents
and the Elan Improvements. For the avoidance of doubt, Elan Intellectual
Property shall exclude inventions, patents and know-how owned, licensed or
controlled by [ * ], and by all Affiliates or subsidiaries (present or
future) of Elan, plc within the division of Elan, plc carrying on business
as Elan Pharmaceuticals which incorporates, inter alia, EPIL (to the extent
that EPIL is the owner of patents, know-how or other intellectual property
or technology invented and/or developed within the division of Elan, plc
carrying on business as Elan Pharmaceuticals), [ * }Elan Pharmaceuticals,
Inc., Elan Diagnostics, Carnrick Laboratories, and Elan Europe Limited.
"Elan Know-How" shall mean any and all rights owned, licensed or controlled
by Elan to any scientific, pharmaceutical or technical information, data,
discovery, invention (whether patentable or not), technique, process,
procedure, system, formulation or design relating to the System that is not
generally known to the public.
"Elan License" shall have the meaning set forth in Clause 2.1 hereof.
"Elan Patents" shall mean any and all patents and patent applications as
set forth in Schedule 1, and all rights therein, and including all
extensions, continuations, continuations-in-part, divisionals, patents-of-
additions, re-examinations, re-issues, supplementary protection
certificates and foreign counterparts thereto owned by or licensed to Elan
containing claims relating to the System.
"Elan Research License" shall have the meaning set forth in Clause 2.2
hereof.
"EPIL" shall mean Elan Pharma International Limited a private limited
company incorporated under the laws of Ireland.
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"Existing RPI License Agreements" shall have the meaning as such term is
defined in the RPI License Agreement.
"Field" shall mean the [ * ]the Target Ribozyme using the System for the
down regulation of HER-2.
"Financial Year" shall mean each year commencing on 1 January (or in the
case of the first Financial Year, the Effective Date) and expiring on 31
December of each year.
"HER-2" shall mean Human Epidermal Growth Factor Receptor Type 2.
"In Market" shall mean the sale of the Product in the Territory by Newco or
its Affiliates, or where applicable by a permitted sub-licensee, to an
unaffiliated third party, such as (i) the end-user consumer of the Product
(ii) a wholesaler, managed care organization, hospital or pharmacy or other
third party who effects the final commercial sale to the end-user consumer
of the Product, and shall exclude the transfer pricing of the Product(s) by
Newco to an Affiliate or a sub-licensee.
"JDOA" shall mean that certain Joint Development and Operating Agreement,
of even date herewith, by and between Elan, RPI, EIS and Newco.
"Licensed Technologies" shall mean the Elan Intellectual Property and the
RPI Intellectual Property.
"Licenses" shall mean the Elan License, the Elan Research License and the
RPI License.
"Management Committee" shall have the meaning, as such term is defined in
the JDOA.
"Net Sales" shall mean that sum determined by deducting the following
deductions from the aggregate gross In Market sales proceeds billed for the
Products by Newco or its Affiliate or a permitted sub-licensee, as the case
may be:
(i) transportation charges or allowances, if any, included in such
price;
(ii) trade, quantity or cash discounts, broker's or agent's
commissions, if any, allowed or paid;
(iii) credits or allowances, if any, given or made on account of price
adjustments, returns, promotional discounts, rebates and any and
all federal, state or local government rebates whether in
existence now or enacted at any time during the term of the
Licenses; and
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(iv) any tax, excise or governmental charge upon or measured by the
sale, transportation, delivery or use of the Products.
"Newco" shall mean Medizyme Pharmaceuticals Ltd., Bermuda exempted limited
liability company incorporated under the laws of Bermuda.
"Newco Intellectual Property" shall mean the Newco Patents and the Newco
Know- How.
"Newco Know-How" shall mean any and all rights owned, licensed or
controlled by Newco to any scientific, pharmaceutical or technical
information, data, discovery, invention (whether patentable or not),
technique, process, procedure, system, formulation or design that is not
generally known to the public arising out of the conduct of the Project by
any person that does not constitute Elan Improvements or RPI Improvements.
"Newco Patents" shall mean any and all patents and patent applications
arising out of the conduct of the Project by any person that does not
constitute Elan Improvements or RPI Improvements and all rights therein,
and including all extensions, continuations, continuations-in-part,
divisionals, patents-of-additions, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts thereto
owned or licensed to Newco.
"Oligonucleotide" shall mean a [ * ] non-protein, non-peptide encoding
nucleic acid molecule including those with stem loop structures used as a
human therapeutic and/or prophylactic compound comprising between [ * ]
including oligonucleotide analogs which may include natural or non-natural
heterocycles, sugars and/or backbone linkage modifications, capable of
specifically inhibiting the function, activity or expression of a gene. For
the purposes hereof Oligonucleotide (a) shall include [ * ], and (b) shall
exclude polymers in which the linkages are [ * ] but shall not exclude
[ * ]
"Party" shall mean Elan or Newco, as the case may be, and "Parties" shall
mean Elan and Newco.
"Product(s)" shall mean the pharmaceutical formulation incorporating the
Target Ribozyme and incorporated within or packaged with the System.
"Project" shall mean all activities as undertaken by Elan, RPI and Newco in
order to develop the Products.
"R&D Committee" shall have the meaning, as such term is defined in the
JDOA.
"R&D Plan" shall have the meaning, as such term is defined in the JDOA.
<PAGE>
"R&D Program" shall mean any research and development program commenced by
Newco pursuant to the Project.
"Ribozyme" shall mean an [ * ] which is directed to inhibit, by catalytic
cleavage, the translation of mRNA coding for a gene. For the avoidance of
doubt, Ribozyme does not include [ * ]
"RPI" shall mean Ribozyme Pharmaceuticals, Inc., a Delaware corporation and
its Affiliates, excluding Newco.
"RPI Improvements" shall have the meaning, as such term is defined in the
RPI License Agreement.
"RPI Intellectual Property" shall mean the RPI Know-How, the RPI Patents
and the RPI Improvements, as such terms are defined in the RPI License
Agreement.
"RPI Know-How" shall have the meaning, as such term is defined in the RPI
License Agreement.
"RPI License" shall mean have the meaning set forth in Clause 2.1 of the
RPI License Agreement.
"RPI License Agreement" shall mean that certain license agreement, of even
date herewith, entered into between RPI and Newco.
"RPI Patents" shall have the meaning, as such term is defined in the RPI
License Agreement.
"Strategic Investor" shall mean a company, corporation or person investing
in RPI or Newco for strategic purposes as evidenced by, inter alia, and
shall exclude financial institutions but not any of their direct or
indirect assignees or transferees that are not financial institutions.
"Substitute Ribozyme" shall have the meaning set forth in Clause 2.2 of the
JDOA.
"Substitute Target" shall have the meaning set forth in Clause 2.2 of the
JDOA.
"System" shall mean an ambulatory drug delivery system for direct
attachment to the body of a patient having a flexible diaphragm drug
reservoir, which is capable of delivering factory pre-programmed continuous
amounts of drug upon activation as disclosed and described in the Elan
Patents set forth in Schedule 1 attached hereto.
"Target Ribozyme" shall mean a Ribozyme directed to HER-2 unless and until
a [ * ] directed to a [ * ] is designated to be the subject of the Project
pursuant to the
<PAGE>
designation of a [ * ] and [ * ] under the provisions of Clause 2.2 of the
JDOA, in which case the term [ * ] shall mean such designated [ * ]
directed to the [ * ]
"Technological Competitor of Elan" shall mean a company, corporation or
person listed in Schedule 2 and successors thereof or any additional broad-
based technological competitor of Elan added to such Schedule from time to
time upon mutual agreement of the Parties.
"Term" shall have the meaning set forth in Clause 8.
"Territory" shall mean all the countries of the world.
"United States Dollar" and "US$" shall mean the lawful currency for the
time being of the United States of America.
1.2. In this Agreement:
1.2.1 The singular includes the plural and vice versa, and the masculine
includes the feminine and vice versa and the neuter includes the
masculine and the feminine.
1.2.2 Any reference to a Clause or Schedule shall, unless otherwise
specifically provided, be to a Clause or Schedule of this Agreement.
1.2.3 The headings of this Agreement are for ease of reference only and
shall not affect its construction or interpretation.
2. ELAN LICENSE TO NEWCO
2.1. Elan hereby grants to Newco for the Term an exclusive license (including
the limited right to grant sublicenses under Clause 2.6 below) (the "Elan
License") to the Elan Intellectual Property to make, have made, import,
use, offer for sale and sell the Products in the Field in the Territory,
subject to any contractual obligations that Elan has as of the Effective
Date, including but not limited to the Development License and Supply
Agreement dated [ * ], and the Manufacturing Agreement dated [ * ] among
[ * ]
2.2 Elan hereby grants to Newco for a period of [ * ] from the Effective Date a
nonexclusive license (including the limited right to grant sublicenses
under Clause 2.6 below) (the "Elan Research License") to the Elan
Intellectual Property solely to use the System for research and to perform
clinical investigations to determine the commercial viability of the
continuous subcutaneous administration of Angiozyme(TM) using the System,
subject to any contractual obligations that Elan has as of the Effective
Date, including but not limited to the Development License and Supply
Agreement dated [ * ] and the Manufacturing Agreement dated [ * ]. Newco
shall provide to
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the R&D Committee periodic reports not less frequently than quarterly with
respect to the progress of the research and clinical investigations set
forth herein. If Newco or its permitted sublicensee is not actively engaged
in the performance of such research and clinical investigations and such
failure is not cured within ninety (90) days written notice thereof from
Elan to Newco, or if Elan in its reasonable good faith judgement after
consultation with RPI determines that the continuous subcutaneous
administration of Angiozyme(TM) using the System is not commercially
viable, then Elan may terminate the Elan Research License upon thirty (30)
days written notice to Newco.
The Parties acknowledge that the provisions relating to the
commercialization of the continuous subcutaneous administration of
Angiozyme(TM) using the System are set forth in Clause 7.2 of the JDOA.
2.3 [ * ] shall be responsible for payments related to the financial provisions
and obligations of any third party agreement with respect to the Elan
Intellectual Property to which it is a party on the Effective Date
(including amendments thereto) (the "Elan Effective Date Agreements"),
including without limitation, any royalty or other compensation obligations
triggered thereunder on the Effective Date, or triggered thereunder after
the Effective Date. Elan hereby confirms that no obligations are in effect
on the date hereof between Elan and an unaffiliated third party relating to
the System for use in the Field.
For the avoidance of doubt, royalties, milestones or other payments which
arise from the process of the commercialization or exploitation of products
under the Elan Effective Date Agreements (for example, a milestone payment
payable upon successful completion of Phase II clinical trials, the filing
of an NDA application, obtaining NDA approval, or first commercial sale)
shall be payments for which Elan will be responsible under this Clause 2.3.
2.4 To the extent royalty or other compensation obligations that are payable to
third parties with respect to the Elan Intellectual Property would be
triggered after the Effective Date, under any third party agreement entered
into by Elan after the Effective Date (the "Elan Post-Effective Date
Agreements"), by a proposed use of such Elan Intellectual Property in
connection with the Project, Elan will inform Newco of such royalty or
compensation obligations. If Newco agrees to utilize such Elan
Intellectual Property in connection with the Project, Newco will be
responsible for the payment of such royalty or other compensation
obligations relating thereto.
For the avoidance of doubt, royalties, milestones or other payments which
arise from the process of the commercialization or exploitation of products
under the Elan Post-Effective Date Agreements (for example, a milestone
payment payable upon successful completion of Phase II clinical trials, the
filing of an NDA application, obtaining NDA approval, or first commercial
sale) shall be payments for which Newco will be responsible under this
Clause 2.4.
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RPI shall be a third party beneficiary under this Agreement and shall have
the right to cause Newco to enforce Newco's rights under this Agreement
against Elan.
2.5 Notwithstanding anything contained in this Agreement to the contrary, Elan
shall have the right outside the Field and subject to the non-competition
provisions of Clause 4 to exploit and grant licenses and sublicenses of the
Elan Intellectual Property.
For the avoidance of doubt, Newco shall have no right to use the Elan
Intellectual Property outside the Field.
2.6 Newco shall not assign any of its rights under the Elan License and Elan
Research License relating to the Elan Intellectual Property without the
prior written consent of Elan and RPI.
Newco shall not sublicense any of its rights under the Elan License and
Elan Research License relating to the Elan Intellectual Property without
the prior written consent of Elan and RPI, which consent shall not be
unreasonably withheld or delayed; provided, however, that the consent of
Elan may be withheld in Elan's sole discretion in the case of a proposed
sublicense of such rights to a Technological Competitor of Elan.
2.7 Any agreement between Newco and any permitted third party for the
development or exploitation of the Elan Intellectual Property shall require
such third party to maintain the confidentiality of all information
concerning the Elan Intellectual Property.
Insofar as the obligations owed by Newco to Elan are concerned, Newco shall
remain responsible for all acts and omissions of any permitted sub-
licensee, including RPI, as if they were acts and omissions by Newco.
3. INTELLECTUAL PROPERTY
3.1 Ownership of Intellectual Property:
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3.1.1 Newco shall own the Newco Intellectual Property.
3.1.2 Elan shall own the Elan Intellectual Property.
4. NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY
4.1 Subject to Clause 4.4, during the Term, Elan, alone or in conjunction with
a third party, shall not develop or commercialize the [ * ], subject to the
current provisions of (a) the Development, License and Supply Agreement
dated [ * ], (b) the Subscription, Joint Development and Operating
Agreement, dated [ * ],
<PAGE>
between Elan, plc, EIS, [ * ], (c) the License Agreement, dated [ * ], (d)
the Subscription, Joint Development and Operating Agreement, dated [ * ].,
and (e) the License Agreement, dated as of [ * ] and the transactions
currently contemplated thereby.
4.2 Notwithstanding anything to the contrary contained herein,
(a) the provisions of Clause 4.1 shall not restrict or prohibit Elan from
developing and commercializing the subcutaneous administration of the
following using the Clause 4.1 System:
(i) [ * ], and
(ii) [ * ]
(b) the provisions of Clause 4.1 shall only act as a restriction upon
Affiliates and subsidiaries of Elan, plc carrying on business as Elan
Pharmaceutical Technologies and shall not act as a restriction upon,
nor in any way affect, Affiliates and subsidiaries (present or future)
within the division of Elan, plc carrying on business as Elan
Pharmaceuticals which incorporates, inter alia, EPIL (to the extent
that EPIL is the owner of patents, know-how or other intellectual
property or technology invented and/or developed within the division
of Elan, plc carrying on business as Elan Pharmaceuticals), Athena
Neurosciences, Inc., Elan Pharmaceuticals, Inc., Elan Diagnostics,
Carnrick Laboratories, and Elan Europe Limited.
4.3. If after the Effective Date Elan acquires know-how or patent rights from a
third party relating to the System, or if Elan acquires or merges with a
third party entity that owns or has license rights to know-how or patent
rights relating to the System, then Elan shall offer to license such know-
how and patent rights to Newco (subject to existing contractual
obligations) solely for Newco to research, develop and otherwise engage in
the commercialization of the Product solely for use in the Field on such
terms as would be offered to an independent third party negotiating in good
faith on an arms-length basis.
4.4. If Newco determines that Newco should not acquire such license as is
referred to in Clause 4.3, then Elan shall be free to fully exploit such
know-how and patent rights, with the Elan Intellectual Property licensed to
Newco, whether inside or outside the Field and to grant to third parties
licenses and sublicenses with respect thereto.
5. FINANCIAL PROVISIONS
5.1 License Fee:
------------
<PAGE>
In consideration of the license granted by Elan to Newco of the Elan Patent
Rights under Clause 2, Newco shall pay to Elan a non-refundable license fee
of Fifteen Million Dollars ($15 Million) in cash, the receipt of which is
hereby acknowledged by Elan (the "License Fee"). The License Fee shall not
be subject to future performance obligations of Elan to Newco or RPI and
shall not be applicable against future services provided by Elan to Newco
or RPI. The license fee terms as set out in this Agreement are independent
and distinct from the other terms of this Agreement.
5.2 Royalties:
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The intent of the Parties is to provide for equivalent economic benefit to
each of RPI and Elan, except in respect of the License Fee. Accordingly,
the Management Committee shall decide by unanimous consent on the royalties
which shall be payable by Newco to RPI and Elan on Net Sales. When
determining such royalties, the Management Committee shall consider the
royalty obligations of RPI under the Existing RPI License Agreements,
provided that any royalties payable by Newco to RPI and Elan hereunder
shall be distributed in equal amount to each of RPI and Elan. RPI
represents and warrants to Newco and Elan that RPI's royalty obligations
under the Existing RPI License Agreements do not exceed an aggregate of
[ * ] percent of Net Sales.
5.3 Any license fees, royalties or other payments due under this Agreement to
Elan shall be apportioned in accordance with a formula agreed between
Elan, plc and EPIL.
5.4 Payment of royalties pursuant to Clause 5.2 shall be made quarterly in
arrears during each Financial Year within 30 days after the expiry of the
calendar quarter. The method of payment shall be by wire transfer to an
account specified by Elan. Each payment made to Elan shall be accompanied
by a true accounting of all Products sold by Newco's permitted
sublicensees, if any, during such quarter.
Such accounting shall show, on a country-by-country and Product-by-Product
basis, Net Sales (and the calculation thereof) and each calculation of
royalties with respect thereto, including the calculation of all
adjustments and currency conversions.
5.5 Newco shall maintain and keep clear, detailed, complete, accurate and
separate records for a period of 3 years:
5.5.1 to enable any royalties on Net Sales that shall have accrued
hereunder to be determined; and
5.5.2 to enable any deductions made in the Net Sales calculation to be
determined.
5.6 All payments due hereunder shall be made in United States Dollars. Payments
due on Net Sales of any Product for each calendar quarter made in a
currency other than United States Dollars shall first be calculated in the
foreign currency and then
<PAGE>
converted to United States Dollars on the basis of the exchange rate in
effect on the last working day for such quarter for the purchase of United
States Dollars with such foreign currency quoted in the Wall Street Journal
(or comparable publication if not quoted in the Wall Street Journal) with
respect to the currency of the country of origin of such payment,
determined by averaging the rates so quoted on each business day of such
quarter.
5.7 If, at any time, legal restrictions in the Territory prevent the prompt
payment when due of royalties or any portion thereof, the Parties shall
meet to discuss suitable and reasonable alternative methods of paying Elan
the amount of such royalties. In the event that Newco is prevented from
making any payment under this Agreement by virtue of the statutes, laws,
codes or government regulations of the country from which the payment is to
be made, then such payments may be paid by depositing them in the currency
in which they accrue to Elan's account in a bank acceptable to Elan in the
country the currency of which is involved or as otherwise agreed by the
Parties.
5.8 Elan and Newco agree to co-operate in all respects necessary to take
advantage of any double taxation agreements or similar agreements as may,
from time to time, be available.
5.9 Any taxes payable by Elan on any payment made to Elan pursuant to this
Agreement shall be for the account of Elan. If so required by applicable
law, any payment made pursuant to this Agreement shall be made by Newco
after deduction of the appropriate withholding tax, in which event the
Parties shall co-operate to obtain the appropriate tax clearance as soon as
is practicable. On receipt of such clearance, Newco shall forthwith
arrange payment to Elan of the amount so withheld.
6. RIGHT OF INSPECTION AND AUDIT
6.1 Once during each Financial Year, or more often not to exceed quarterly as
reasonably requested by Elan, Newco shall permit Elan or its duly
authorized representatives, upon reasonable notice and at any reasonable
time during normal business hours, to have access to inspect and audit the
accounts and records of Newco and any other book, record, voucher, receipt
or invoice relating to the calculation of the royalty payments on Net Sales
submitted to Elan.
Any such inspection of Newco's records shall be at the expense of Elan,
except that if any such inspection reveals a deficiency in the amount of
the royalty actually paid to Elan hereunder in any Financial Year quarter
of 5% or more of the amount of any royalty actually due to Elan hereunder,
then the expense of such inspection shall be borne solely by Newco. Any
amount of deficiency shall be paid promptly to Elan by Newco.
<PAGE>
If such inspection reveals a surplus in the amount of royalties actually
paid to Elan by Newco, Elan shall reimburse Newco the surplus within 15
days after determination.
6.2 In the event of any unresolved dispute regarding any alleged deficiency or
overpayment of royalty payments hereunder, the matter will be referred to
an independent firm of chartered accountants chosen by agreement of RPI and
Elan for a resolution of such dispute. Any decision by the said firm of
chartered accountants shall be binding on the Parties.
7. REPRESENTATIONS AND WARRANTIES
7.1 Elan represents and warrants to Newco and RPI as follows:
7.1.1 Elan has the right to grant the Elan License and the Elan Research
License;
7.1.2 there are no agreements between Elan and any third party that
conflict with the Elan License and Elan Research License;
7.1.3 the patents and patent applications included in the Elan Patents are
free and clear of encumbrances and liens;
7.1.4 to the best of Elan's knowledge, there are no proceedings pending or
threatened proceedings against Elan in connection with the Elan
Intellectual Property in relation to the Field; and
7.1.5 the Elan Intellectual Property constitutes all intellectual property
owned or licensed by Elan that are reasonably applicable to the
Project as it relates to the System.
7.2 In addition to any other indemnities provided for herein, Elan shall
indemnify and hold harmless Newco and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including reasonable attorney's fees and
expenses) incurred or sustained by Newco arising out of or in connection
with any:
7.2.1 breach of any representation, covenant, warranty or obligation by
Elan hereunder; or
7.2.2 act or omission on the part of Elan or any of its respective
employees, agents, officers and directors in the performance of this
Agreement.
7.3 In addition to any other indemnities provided for herein, Newco shall
indemnify and hold harmless Elan and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including
<PAGE>
reasonable attorney's fees and expenses) incurred or sustained by Elan
arising out of or in connection with any:
7.3.1 breach of any representation, covenant, warranty or obligation by
Newco hereunder; or
7.3.2 act or omission on the part of Newco or any of its agents or
employees in the performance of this Agreement.
7.4 The Party seeking an indemnity shall:
7.4.1 fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
7.4.2 permit the indemnifying Party to take full care and control of such
claim or proceeding;
7.4.3 co-operate in the investigation and defense of such claim or
proceeding;
7.4.4 not compromise or otherwise settle any such claim or proceeding
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld conditioned or delayed; and
7.4.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
7.5 EXCEPT AS SET FORTH IN THIS CLAUSE 7, ELAN IS GRANTING THE LICENSES
HEREUNDER ON AN "AS IS" BASIS WITHOUT REPRESENTATION OR WARRANTY WHETHER
EXPRESS OR IMPLIED INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH
WARRANTIES ARE EXPRESSLY DISCLAIMED.
7.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ELAN AND NEWCO
SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION OR
WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE
EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL OR
INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF PROFITS OR
OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE
PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE.
<PAGE>
8. TERM AND TERMINATION
8.1 The term of this Agreement shall commence as of the Effective Date and
shall, subject to the rights of termination outlined in this Clause 8,
expire on a Product-by-Product basis and on a country-by-country basis on
the last to occur of:
8.1.1 [ * ] starting from the date of the first commercial sale of the
Product in the country concerned; or
8.1.2 the date of expiration of the last to expire of the patents included
in the Elan Patents and the Elan Improvements and/or the RPI Patents
and the RPI Improvements
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have, in
addition to all other legal and equitable rights and remedies hereunder,
the right to terminate this Agreement upon 30 days' prior written notice to
the defaulting Party.
8.3 For the purpose of this Clause 8, a "Relevant Event" is committed or
suffered by a Party if:
8.3.1 it commits a material breach of its obligations under this Agreement
or the JDOA and fails to remedy it within 60 days of being
specifically required in writing to do so by the other Party;
provided, that if the breaching Party has proposed a course of
action to rectify the breach and is acting in good faith to rectify
same but has not cured the breach by the 60th day, such period shall
be extended by such period as is reasonably necessary to permit the
breach to be rectified;
8.3.2 a distress, execution, sequestration or other process is levied or
enforced upon or sued out against a material part of its property
which is not discharged or challenged within 30 days;
8.3.3 it is unable to pay its debts in the normal course of business;
8.3.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or amalgamation,
without the prior written consent of the other Party (such consent
not to be unreasonably withheld);
8.3.5 the appointment of a liquidator, receiver, administrator, examiner,
trustee or similar officer of such Party or over all or
substantially all of its assets under the law of any applicable
jurisdiction, including without limitation, the United States of
America, Bermuda or Ireland;
<PAGE>
8.3.6 an application or petition for bankruptcy, corporate re-
organization, composition, administration, examination, arrangement
or any other procedure similar to any of the foregoing under the law
of any applicable jurisdiction, including without limitation, the
United States of America, Bermuda or Ireland, is filed, and is not
discharged within 60 days, or a Party applies for or consents to the
appointment of a receiver, administrator, examiner or similar
officer of it or of all or a material part of its assets, rights or
revenues or the assets and/or the business of a Party are for any
reason seized, confiscated or condemned.
8.4 Elan shall be entitled to terminate this Agreement in the event of a Change
of Control of RPI/Newco, upon which termination the RPI License shall
terminate, provided that the foregoing shall not apply in relation to any
exercise of any options by Elan granted by the Definitive Documents.
8.5 Upon expiration or termination of the Agreement:
8.5.1. any sums that were due from Newco to Elan on Net Sales in the
Territory or in such particular country or countries in the
Territory (as the case may be) prior to the expiration or
termination of this Agreement as set forth herein shall be paid in
full within 60 days after the expiration or termination of this
Agreement for the Territory or for such particular country or
countries in the Territory (as the case may be);
8.5.2 any provisions that expressly survive termination or expiration of
this Agreement, including without limitation this Clause 8, shall
remain in full force and effect;
8.5.3 all representations, warranties and indemnities shall insofar as are
appropriate remain in full force and effect;
8.5.4 the rights of inspection and audit set out in Clause 6 shall
continue in force for a period of one year;
8.5.5 all rights and licenses granted pursuant to this Agreement and to
the Elan Intellectual Property pursuant to the JDOA (including the
rights of Newco pursuant to Clause 11 of the JDOA with respect to
patent prosecution and maintenance; and the rights of Newco to the
Elan Intellectual Property pursuant to Clause 7.2 of the JDOA with
respect to the development and commercialization of Angiozyme(TM)
using the System) shall cease for the Territory or for such
particular country or countries in the Territory (as the case may
be) and shall revert to or be transferred to Elan, and Newco shall
not thereafter use in the Territory or in such particular country or
countries in the Territory (as the case may be) any rights covered
by this Agreement;
<PAGE>
8.5.6 subject to Clause 8.5.7 and to such license, if any, granted by
Newco to Elan pursuant to the provisions of Clause 12 of the JDOA
(entitled "Cross Licensing/Exploitation of Products Outside the
Field"), all rights to Newco Intellectual Property shall be
transferred to and jointly owned by RPI and Elan and may be
exploited by both Elan and RPI separately, provided that Elan and
RPI will cooperate reasonably in the prosecution and maintenance of
patents claiming such technology and rights and provided further
that nothing hereunder shall grant, or be construed to grant, the
right (a) to Elan to make, have made, import, use, offer for sale or
sell the Target Ribozyme, and (b) to RPI to make, have made, import,
use, offer for sale or sell the System;
In the event of a dispute arising pursuant to this Clause 8.5.6,
Elan and RPI agree to negotiate in good faith on the course of
action to be taken with respect to determining their respective
entitlements pursuant to this Clause; and
8.5.7 the rights of permitted third party sub-licensees in and to the Elan
Intellectual Property shall survive the termination of the license
and sublicense agreements granting said intellectual property rights
to Newco; and Newco, Elan and RPI shall in good faith agree upon the
form most advantageous to Elan and RPI in which the rights of Newco
under any such licenses and sublicenses are to be held (which form
may include continuation of Newco solely as the holder of such
licenses or assignment of such rights to a third party or parties,
including an assignment to both Elan and RPI).
Any sublicense agreement between Newco and such permitted
sublicensee shall permit an assignment of rights by Newco and shall
contain appropriate confidentiality provisions.
9. CONFIDENTIAL INFORMATION
9.1 The Parties agree that it will be necessary, from time to time, to disclose
to each other confidential and proprietary information, including without
limitation, inventions, works of authorship, trade secrets, specifications,
designs, data, know-how and other proprietary information relating to the
Field, the Products, processes, services and business of the disclosing
Party.
The foregoing shall be referred to collectively as "Confidential
Information".
9.2 Any Confidential Information disclosed by one Party to another Party shall
be used by the receiving Party exclusively for the purposes of fulfilling
the receiving Party's obligations under this Agreement and the JDOA and for
no other purpose.
9.3 Each Party shall disclose Confidential Information of the other Party only
to those employees, representatives and agents requiring knowledge thereof
in connection with
<PAGE>
fulfilling the Party's obligations under this Agreement. Each Party further
agrees to inform all such employees, representatives and agents of the
terms and provisions of this Agreement and their duties hereunder and to
obtain their agreement hereto as a condition of receiving Confidential
Information. Each Party shall exercise the same standard of care as it
would itself exercise in relation to its own confidential information (but
in no event less than a reasonable standard of care) to protect and
preserve the proprietary and confidential nature of the Confidential
Information disclosed to it by the other Party. Each Party shall, upon
request of the other Party, return all documents and any copies thereof
containing Confidential Information belonging to, or disclosed by, such
other Party.
9.4 Any breach of this Clause 9 by any person informed by one of the Parties is
considered a breach by the Party itself.
9.5 Confidential Information shall not be deemed to include:
9.5.1 information that is in the public domain;
9.5.2 information which is made public through no breach of this
Agreement;
9.5.3 information which is independently developed by a Party as evidenced
by such Party's records;
9.5.4 information that becomes available to a Party on a non-confidential
basis, whether directly or indirectly, from a source other than a
Party, which source did not acquire this information on a
confidential basis; or
9.5.5 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body; or
(ii) any other requirement of law;
provided that if the receiving Party becomes legally required to
disclose any Confidential Information, the receiving Party shall
give the disclosing Party prompt notice of such fact so that the
disclosing Party may obtain a protective order or other appropriate
remedy concerning any such disclosure. The receiving Party shall
fully co-operate with the disclosing Party in connection with the
disclosing Party's efforts to obtain any such order or other remedy.
If any such order or other remedy does not fully preclude
disclosure, the receiving Party shall make such disclosure only to
the extent that such disclosure is legally required.
9.6 The provisions relating to confidentiality in this Clause 9 shall remain in
effect during the term of this Agreement, and for a period of 7 years
following the expiration or
<PAGE>
earlier termination of this Agreement.
9.7 The Parties agree that the obligations of this Clause 9 are necessary and
reasonable in order to protect the Parties' respective businesses, and
each Party agrees that monetary damages would be inadequate to compensate
a Party for any breach by the other Party of its covenants and agreements
set forth herein.
Accordingly, the Parties agree that any such violation or threatened
violation shall cause irreparable injury to a Party and that, in addition
to any other remedies that may be available, in law and equity or
otherwise, each Party shall be entitled to obtain injunctive relief
against the threatened breach of the provisions of this Clause 9, or a
continuation of any such breach by the other Party, specific performance
and other equitable relief to redress such breach together with its
damages and reasonable counsel fees and expenses to enforce its rights
hereunder, without the necessity of proving actual or express damages.
9.8 For the avoidance of doubt, all Confidential Information of Newco received
by Elan hereunder shall not be disclosed by Elan to Affiliates and/or
subsidiaries of Elan, plc within the division of Elan, plc carrying on
business as Elan Pharmaceuticals (excluding disclosure of such
Confidential Information to senior personnel of Elan who are bound by
confidentiality provisions but such persons shall have no right to further
disclose such confidential information) which division incorporates, inter
alia, EPIL (to the extent that it is the owner of patents, know-how or
other intellectual property or technology invented and/or developed within
the division of Elan, plc carrying on business as Elan Pharmaceuticals),
Athena Neurosciences, Inc., Elan Pharmaceuticals, Inc., Elan Diagnostics,
Carnrick Laboratories, and Elan Europe Limited.
10. GOVERNING LAW AND JURISDICTION; ARBITRATION
10.1. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the provisions
thereof relating to the conflict of laws.
10.2 The Parties will attempt in good faith to resolve any dispute arising out
of or relating to this Agreement promptly by negotiation between
executives of the Parties. In the event that such negotiations do not
result in a mutually acceptable resolution, the Parties agree to consider
other dispute resolution mechanisms including mediation.
In the event that the Parties fail to agree on a mutually acceptable
dispute resolution mechanism, any such dispute shall be finally settled by
arbitration pursuant to Clause 10.3.
10.3 Any dispute under this Agreement which is not settled by mutual consent
under
<PAGE>
Clause 10.2 and which relates to (i) the interpretation or enforcement of
any provision of this Agreement, (ii) the interpretation or application of
law, or (iii) the ownership of any intellectual property shall be finally
settled by binding arbitration, conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") by one
arbitrator appointed in accordance with said rules. Such arbitrator shall
be an independent expert in pharmaceutical product development and
marketing (including clinical development and regulatory affairs) and shall
be reasonably satisfactory to each of the Parties; provided, that if the
Parties are unable to agree upon the identity of such arbitrator within 15
days of demand by either Party, then either Party shall have the right to
petition the AAA to appoint an arbitrator.
The arbitration shall be held in New York, New York.
The arbitrator shall determine what discovery will be permitted, consistent
with the goal of limiting the cost and time which the Parties must expend
for discovery; provided the arbitrator shall permit such discovery as they
deem necessary to permit an equitable resolution of the dispute.
Any written evidence originally in a language other than English shall be
submitted in English translation accompanied by the original or a true copy
thereof.
The costs of the arbitration, including administrative and arbitrators'
fees, shall be shared equally by the Parties and each Party shall bear its
own costs and attorneys' and witness' fees incurred in connection with the
arbitration.
In rendering judgment, the arbitrators may not provide for punitive or
similar exemplary damages.
A disputed performance or suspended performances pending the resolution of
the arbitration must be completed within 30 days following the final
decision of the arbitrators or such other reasonable period as the
arbitrators determine in a written opinion.
Any arbitration under this Agreement shall be completed within one year
from the filing of notice of a request for such arbitration.
The arbitration proceedings and the decision shall not be made public
without the joint consent of the Parties and each Party shall maintain the
confidentiality of such proceedings and decision unless otherwise permitted
by the other Party.
The Parties agree that the decision shall be the sole, exclusive and
binding remedy between them regarding any and all disputes, controversies,
claims and counterclaims presented to the arbitrators. Application may be
made to any court having jurisdiction over the Party (or its assets)
against whom the decision is rendered for a
<PAGE>
judicial recognition of the decision and an order of enforcement.
11. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
Neither Elan nor Newco shall be liable for delay in the performance of any
of its obligations hereunder if such delay results from causes beyond its
reasonable control, including, without limitation, acts of God, fires,
strikes, acts of war, intervention of a government authority, but any such
delay or failure shall be remedied by such Party as soon as practicable.
12. ASSIGNMENT
This Agreement may not be assigned by either Party without the prior
written consent of the other, save that either Party may assign this
Agreement to its Affiliates or subsidiaries without such prior written
consent and that Elan may assign this Agreement to any off-balance sheet
special purpose entity established by Elan or EIS or their respective
Affiliates without such prior written consent; provided that such
assignment does not have any adverse tax consequences on the other Party.
13. NOTICES
13.1 Any notice to be given under this Agreement shall be sent in writing in
English by registered airmail or telefaxed to the following addresses:
If to Newco at:
Medizyme Pharmaceuticals Ltd.
102 St. James Court
Clarendon House
Church St.
Hamilton, Bermuda
Attention: Secretary
Telephone: 441-295-1422
Fax: 441-292-4720
with a copy to RPI at:
Ribozyme Pharmaceuticals Incorporated
2950 Wilderness Place
Boulder, Colorado 80301
Attention: Chief Executive Officer
Telephone: 303-449-6500
<PAGE>
Fax: 303-449-6995
If to RPI at:
Ribozyme Pharmaceuticals Incorporated
2950 Wilderness Place
Boulder, Colorado 80301
Attention: Chief Executive Officer
Telephone 303-449-6500
Fax: 303-449-6995
with a copy to:
Rothgerber Johnson & Lyons LLP
One Tabor Center, Suite 3000
1200 Seventeenth Street
Denver, Colorado 80202
Attention: Woody Davis, Esq.
Telephone 303-623-9000
Fax: 303-623-9222
If to Elan, plc and/or EPIL at:
Elan Corporation, plc
Elan Pharma International Limited
C/o Elan International Services, Ltd.
102 St. James Court
Flatts,
Smiths FL04
Bermuda
Attention: Secretary
Telephone: 441 292 9169
Fax: 441 292 2224
or to such other address(es) and telefax numbers as may from time to time
be notified by either Party to the other hereunder.
13.2 Any notice sent by mail shall be deemed to have been delivered within seven
7 working days after dispatch and any notice sent by telex or telefax shall
be deemed to have been delivered within twenty 24 hours of the time of the
dispatch. Notice of change of address shall be effective upon receipt.
<PAGE>
14. MISCELLANEOUS
14.1 Waiver:
-------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any other breach or failure to perform or of any
other right arising under this Agreement.
14.2 Severability:
-------------
If any provision in this Agreement is agreed by the Parties to be, or is
deemed to be, or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto:
14.2.1 such provision will be deemed amended to conform to applicable laws
so as to be valid and enforceable; or
14.2.2 if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect from the
date of such agreement or such earlier date as the Parties may
agree, and the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired or
affected in any way.
14.3 Further Assurances:
-------------------
At the request of any of the Parties, the other Party or Parties shall (and
shall use reasonable efforts to procure that any other necessary parties
shall) execute and perform all such documents, acts and things as may
reasonably be required subsequent to the signing of this Agreement for
assuring to or vesting in the requesting Party the full benefit of the
terms hereof.
14.4 Successors:
-----------
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
14.5 No Effect on Other Agreements/Conflict:
---------------------------------------
No provision of this Agreement shall be construed so as to negate, modify
or affect in any way the provisions of any other agreement between the
Parties unless specifically referred to, and solely to the extent provided
herein.
In the event of a conflict between the provisions of this Agreement and the
provisions of the JDOA, the terms of the JDOA shall prevail unless this
Agreement specifically
<PAGE>
provides otherwise.
14.6 Amendments:
-----------
No amendment, modification or addition hereto shall be effective or
binding on any Party unless set forth in writing and executed by a duly
authorized representative of each Party.
14.7 Counterparts:
-------------
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
when taken together shall constitute this Agreement.
14.8 Good Faith:
-----------
Each Party undertakes to do all things reasonably within its power which
are necessary or desirable to give effect to the spirit and intent of this
Agreement.
14.9 No Reliance:
------------
Each Party hereby acknowledges that in entering into this Agreement it has
not relied on any representation or warranty save as expressly set out
herein or in any document referred to herein.
14.10 Relationship of the Parties:
----------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute Elan and Newco as partners, or Elan as an employee of Newco, or
Newco as an employee of Elan.
Neither Party hereto shall have any express or implied right or authority
to assume or create any obligations on behalf of or in the name of the
other Party or to bind the other Party to any contract, agreement or
undertaking with any third party.
<PAGE>
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
SIGNED
BY: ____________________
for and on behalf of
Elan Corporation, plc acting
through its division Elan
Pharmaceutical Technologies
SIGNED
BY: ____________________
for and on behalf of
Elan Pharma International Limited
SIGNED
BY: _____________________
For and on behalf of
Medizyme Pharmaceuticals Ltd.
CONSENTED AND AGREED TO:
SIGNED
BY_______________________
For and on behalf of
Ribozyme Pharmaceuticals, Inc.
<PAGE>
SCHEDULE 1
----------
ELAN PATENTS
[ * ]
- --------------------------------------------------------------------------------
File Number Brief Description Country Status
- --------------------------------------------------------------------------------
[ * ] [ * ] Australia Granted [ * ]
Canada Pending
EP Pending
Israel Granted [ * ]
Japan Pending
New Zealand Granted [ * ]
Taiwan Granted [ * ]
United States 2 Granted [ * ]
South Africa
- --------------------------------------------------------------------------------
[ * ] [ * ] Australia Pending
Canada Pending
EP Pending
Ireland Granted [ * ]
Japan Pending
Mexico Pending
New Zealand Pending
Norway Pending
Taiwan Pending
United States Granted [ * ]
South Korea Pending
South Africa Granted [ * ]
- --------------------------------------------------------------------------------
[ * ] [ * ] Australia Pending
Canada Canada
EP Pending
Ireland Granted [ * ]
Israel Pending
Japan Pending
New Zealand Pending
South Africa Granted [ * ]
South Korea Pending
Taiwan Issued [ * ]
United States Pending
- --------------------------------------------------------------------------------
[ * ] [ * ] PCT Pending
Argentina Pending
Ireland Pending
<PAGE>
- --------------------------------------------------------------------------------
Taiwan Pending
United States Pending
- --------------------------------------------------------------------------------
[ * ] [ * ] PCT Pending
Ireland Pending
South Africa Issued [ * ]
Taiwan pending
United States Pending
- --------------------------------------------------------------------------------
[ * ] [ * ] PCT Pending
Taiwan Pending
United States Pending
- --------------------------------------------------------------------------------
[ * ] [ * ] United States Granted [ * ]
- --------------------------------------------------------------------------------
[ * ] [ * ] United States Pending
- --------------------------------------------------------------------------------
All countries are initially designated when filing in the European Patent Office
or the Patent Cooperation Treaty, and are then selected during the regional or
national phase.
<PAGE>
SCHEDULE 1A
CLAUSE 4.1 SYSTEM PATENTS
[ * ]
- --------------------------------------------------------------------------------
File Number Brief Description Country Status
- --------------------------------------------------------------------------------
[ * ] [ * ] Ireland Pending
Philippines Pending
Taiwan Pending
United States Pending
PCT Pending
- --------------------------------------------------------------------------------
[ * ]
- --------------------------------------------------------------------------------
Elan File No. Technology Description Country Status
- --------------------------------------------------------------------------------
[ * ] [ * ] Europe Published
Israel Pending
Japan Pending
New Zealand Pending
South Africa Granted [ * ]
Taiwan Granted [ * ]
United States Granted [ * ]
- --------------------------------------------------------------------------------
[ * ] [ * ] South Africa Granted [ * ]
Taiwan Pending
United States Pending
International Published
- --------------------------------------------------------------------------------
[ * ] [ * ] United States Granted [ * ]
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 2/1/
-------------
TECHNOLOGICAL COMPETITORS OF ELAN
[ * ]
1. Including any and all divisions or subsidiaries of such entities and
successor entities.
<PAGE>
EXHIBIT 6
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.25B-2B OF THE SECURITIES EXCHANGE ACT OF 1934. [*] INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST AND IS FILED
SEPARATELY WITH THE COMMISSION.
Execution Copy 2
SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT
ELAN CORPORATION, PLC
(acting through its division Elan Pharmaceutical Technologies)
AND
ELAN INTERNATIONAL SERVICES, LTD.
AND
ELAN PHARMA INTERNATIONAL LIMITED
AND
RIBOZYME PHARMACEUTICALS, INC.
AND
MEDIZYME PHARMACEUTICALS LTD.
<PAGE>
INDEX
-----
CLAUSE 1 DEFINITIONS
CLAUSE 2 BUSINESS
CLAUSE 3 REPRESENTATIONS AND WARRANTIES
CLAUSE 4 AUTHORIZATION AND CLOSING
CLAUSE 5 DIRECTORS; MANAGEMENT AND R&D COMMITTEES
CLAUSE 6 THE BUSINESS PLAN AND REVIEWS
CLAUSE 7 RESEARCH AND DEVELOPMENT WORK
CLAUSE 8 COMMERCIALIZATION
CLAUSE 9 SUBLICENSE AND ASSIGNMENT RIGHTS
CLAUSE 10 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/NONCOMPETITION
CLAUSE 11 INTELLECTUAL PROPERTY RIGHTS
CLAUSE 12 CROSS LICENSING/EXPLOITATION OF PRODUCTS OUTSIDE THE FIELD
CLAUSE 13 REGULATORY
CLAUSE 14 MANUFACTURING
CLAUSE 15 TECHNICAL SERVICES AND ASSISTANCE
CLAUSE 16 AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY
CLAUSE 17 TRANSFER OF SHARES; RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS
CLAUSE 18 MATTERS REQUIRING PARTICIPANTS' APPROVAL
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CLAUSE 19 DISPUTES
CLAUSE 20 TERMINATION
CLAUSE 21 SHARE RIGHTS
CLAUSE 22 CONFIDENTIALITY
CLAUSE 23 COSTS
CLAUSE 24 GENERAL
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THIS SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT made this __ day of
January, 2000
BETWEEN:
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the laws
of Ireland, acting through its division Elan Pharmaceutical Technologies
and having its registered office at Lincoln House, Lincoln Place, Dublin 2,
Ireland ("Elan, plc");
(2) ELAN INTERNATIONAL SERVICES, LTD., a Bermuda exempted limited liability
company incorporated under the laws of Bermuda, and having its registered
office at Clarendon House, Church St., Hamilton, Bermuda ("EIS");
(3) ELAN PHARMA INTERNATIONAL LIMITED a private limited company incorporated
under the laws of Ireland, and having its registered office at WIL House,
Shannon Business Park, Shannon, County Clare, Ireland ("EPIL");
(4) RIBOZYME PHARMACEUTICALS, INC. a corporation duly incorporated and validly
existing under the laws of Delaware and having its principal place of
business at 2950 Wilderness Place, Boulder, Colorado 80301 ("RPI"); and
(5) MEDIZYME PHARMACEUTICALS LTD., a Bermuda exempted limited liability company
incorporated under the laws of Bermuda, and having its registered office at
Clarendon House, 2 Church St., Hamilton, Bermuda ("Newco").
RECITALS:
A. Newco desires to issue and sell to the Shareholders (as defined below), and
the Shareholders desire to purchase from Newco, for aggregate consideration
of $15,000,000, apportioned between them as set forth herein, (i) 6,000
shares of Newco's common shares, par value $1.00 per share (the "Common
Shares") to RPI, and (ii) 6,000 shares of Newco's preferred shares, par
value $1.00 per share (the "Preferred Shares") allocated 3,612 shares to
RPI and 2,388 shares to EIS.
B. As of the date hereof, Elan, plc and EPIL have entered into a license
agreement with Newco, and RPI has entered into a license agreement with
Newco, in connection with the license to Newco of the Elan Intellectual
Property and the RPI Intellectual Property, respectively (each as defined
below).
C. Elan, plc, EPIL and RPI have agreed to co-operate in the research,
development and commercialization of the Products (as defined below) based
on their respective technologies.
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D. Elan, plc, EPIL and RPI have agreed to enter into this Agreement for the
purpose of recording the terms and conditions regulating their relationship
with each other, with respect to the Licensed Technologies and with Newco.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1
DEFINITIONS
1.1 In this Agreement, the following terms shall, where not inconsistent with
the context, have the following meanings respectively.
"Affiliate" of any Person (in the case of a legal entity) shall mean any
other Person controlling, controlled or under the common control of such
first Person, as the case may be. For the purposes of this definition,
"control" shall mean direct or indirect ownership of fifty percent (50%) or
more of the stock or shares entitled to vote for the election of directors
and "controlling" and "controlled" shall be construed accordingly. For
purposes of this Agreement, Newco is not an Affiliate of Elan or EIS.
"Agreement" shall mean this agreement (which expression shall be deemed to
include the Recitals and the Schedules hereto).
Angiozyme(TM) shall mean a Ribozyme targeted against vascular endothelial
growth factor receptor (VEGF-R).
"Board" shall mean the board of directors of Newco.
"Business" shall mean the business specified in the Business Plan.
"Business Plan" has the meaning set forth in Clause 6 below.
"Certificate of Designations" shall mean that certain certificate of
designations, preferences and rights of Series A Preferred Stock and Series
B Preferred Stock of RPI issued on the date hereof.
"Closing Date" shall mean the date upon which the Substantive Documents are
executed and delivered by the Parties and the transactions effected thereby
are closed.
"Common Share Equivalents" shall mean any options, warrants, rights or any
other securities convertible, exercisable or exchangeable, in whole or in
part, for or into Common Shares.
"Convertible Note" shall mean that certain Convertible Promissory Note, of
even date herewith, by and between RPI and EIS.
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"Directors" shall mean, at any time, the directors of Newco.
"EIS Director" has the meaning set forth in Clause 5.
"Elan" shall mean Elan, plc and EPIL.
"Elan Improvements" has the meaning assigned thereto in the Elan License
Agreement.
"Elan Intellectual Property" has the meaning assigned thereto in the Elan
License Agreement.
"Elan Know-How" has the meaning assigned thereto in the Elan License
Agreement.
"Elan License" has the meaning assigned thereto in the Elan License
Agreement.
"Elan License Agreement" shall mean the license agreement between Elan and
Newco, of even date herewith, attached hereto in Schedule 1.
"Elan Patents" has the meaning assigned thereto in the Elan License
Agreement.
"Elan Research License" has the meaning assigned thereto in the Elan
License Agreement.
"Encumbrance" shall mean any liens, charges, encumbrances, equities,
claims, options, proxies, pledges, security interests, or other similar
rights of any nature.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Right" has the meaning assigned to such term in the RPI
Securities Purchase Agreement in effect on the date hereof.
"Field" shall mean the [ * ] of the Target Ribozyme using the System for
the down regulation of HER-2.
"Financial Year" shall mean each year commencing on January 1 (or in the
case of the first Financial Year, the date hereof) and expiring on December
31 of each year.
"Fully Diluted Common Shares" shall mean all of the issued and outstanding
Common Shares, assuming the conversion, exercise or exchange of all
outstanding Common Share Equivalents.
"Funding Agreement" shall mean the Funding Agreement, of even date
herewith, between EIS, RPI, and Elan.
"HER-2" shall mean Human Epidermal Growth Factor Receptor Type 2.
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"License Agreements" shall mean the Elan License Agreement and the RPI
License Agreement.
"Licensed Technologies" shall mean, collectively, the Elan Intellectual
Property and the RPI Intellectual Property.
"Licenses" shall mean the Elan License, the Elan Research License and RPI
License.
"Management Committee" shall have the meaning set forth in Clause 5.2
hereof.
"Newco Intellectual Property" shall mean Newco Patents and Newco Know How.
"Newco Know-How" shall mean any and all rights owned, licensed or
controlled by Newco to any scientific, pharmaceutical or technical
information, data, discovery, invention (whether patentable or not),
technique, process, procedure, system, formulation or design that is not
generally known to the public arising out of the conduct of the Project by
any person that does not constitute Elan Improvements or RPI Improvements.
"Newco Patents" shall mean any and all patents and patent applications
arising out of the conduct of the Project by any person that does not
constitute Elan Improvements or RPI Improvements and all rights therein,
and including all extensions, continuations, continuations-in-part,
divisionals, patents-of-additions, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts thereto
owned or licensed to Newco.
"Newco Memorandum of Association and Bye-Laws" shall mean the Memorandum of
Association and Bye-Laws of Newco Limited.
"Oligonucleotide" shall mean a [ * ] non-protein, non-peptide encoding
nucleic acid molecule including those with [ * ] used as a human
therapeutic and/or prophylactic compound comprising between [ * ] including
oligonucleotide analogs which may include natural or non-natural
heterocycles, sugars and/or backbone linkage modifications, capable of
specifically inhibiting the function, activity or expression of a gene. For
the purposes hereof Oligonucleotide (a) shall include [ * ]
oligonucleotides, and (b) shall exclude polymers in which the linkages are
[ * ] but shall not exclude [ * ]
"Participant" shall mean RPI or Elan, as the case may be, and
"Participants" shall mean both of the Participants together.
"Party" shall mean Elan, plc, EPIL, RPI, or Newco, as the case may be, and
"Parties" shall mean all four together;
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or authority
or other entity of whatever nature.
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"Permitted Transferee" shall mean any Affiliate or subsidiary of Elan, EIS
or RPI, to whom this Agreement may be assigned, in whole or in part,
pursuant to the terms hereof or in the case of Elan and EIS, a special
purpose financing entity created by Elan or EIS or their respective
affiliates.
"Product(s)" shall mean the pharmaceutical formulation incorporating the
Target Ribozyme and incorporated within or packaged with the System.
"Project" shall mean all activity as undertaken by or on behalf of Newco in
order to develop the Products in accordance with the Business Plan.
"Registration Rights Agreements" shall mean the Registration Rights
Agreements of even date herewith relating to Newco and RPI, respectively.
"R&D Committee" shall have the meaning set forth in Clause 5.2 hereof.
"Regulatory Approval" shall mean the final approval to market a Product in
any country of the Territory, and any other approval which is required to
launch the Product in the normal course of business.
"Research and Development Term" shall mean the research and development
stage of the Business Plan, which stage shall be deemed terminated upon the
first commercial launch of a Product by Newco.
"RHA" shall mean any relevant government health authority (or successor
agency thereof) in any country of the Territory whose approval is necessary
to market a Product in the relevant country of the Territory.
"Ribozyme" shall mean an [ * ] directed to inhibit, by catalytic cleavage,
the translation of mRNA coding for a gene. For the avoidance of doubt,
Ribozyme does not include a gene that encodes a [ * ].
"RPI Directors" has the meaning set forth in Clause 5 hereof.
"RPI Improvements" has the meaning assigned thereto in the RPI License
Agreement.
"RPI Intellectual Property" has the meaning assigned thereto in the RPI
License Agreement.
"RPI Know-How" has the meaning assigned thereto in the RPI License
Agreement.
"RPI License" has the meaning assigned thereto in the RPI License
Agreement.
"RPI License Agreement" shall mean the license agreement between RPI and
Newco, of even date herewith, attached hereto in Schedule 2.
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"RPI Patent Rights" has the meaning assigned thereto in the RPI License
Agreement.
"RPI Securities Purchase Agreement" shall mean that certain securities
purchase agreement, of even date herewith, by and between RPI and EIS.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the shares of Common Shares and shares of Preferred
Shares of Newco.
"Shareholder" shall mean any of EIS, RPI, any Permitted Transferee or any
other Person who subsequently becomes bound by this Agreement as a holder
of the Shares, and "Shareholders" shall mean all of the Shareholders
together.
"Substantive Documents" shall mean this Agreement, the Funding Agreement,
the Elan License Agreement, the RPI License Agreement, the Convertible
Note, the RPI Securities Purchase Agreement, the Registration Rights
Agreements, the Certificate of Designations and associated documentation of
even date herewith, by and between RPI, Elan, EIS and Newco, as applicable.
"Substitute Ribozyme" shall have the meaning set forth in Clause 2.2
hereof.
"Substitute Target" shall have the meaning set forth in Clause 2.2 hereof.
"System" shall mean the ambulatory drug delivery system for direct
attachment to the body of a patient having a flexible diaphragm drug
reservoir, which is capable of delivering factory pre-programmed continuous
amounts of drug upon activation as disclosed and described in the Elan
Patents set forth in Schedule 1 of the Elan License Agreement.
"Target Ribozyme" shall mean a Ribozyme directed to HER-2 unless and until
a [ * ] directed to a [ * ] is designated to be the subject of the Project
pursuant to the designation of a [ * ] and [ * ] under the provisions of
Clause 2.2 hereof, in which case the term [ * ]shall mean such designated
[ * ] directed to the [ * ]
"Technological Competitor of Elan" has the meaning assigned thereto in the
Elan License Agreement.
"Term" shall mean the term of this Agreement.
"Territory" shall mean all of the countries of the world.
"United States Dollar" and "US$" and "$" shall mean the lawful currency of
the United States of America.
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1.2 In addition, the following definitions have the meanings in the Clauses
corresponding thereto, as set forth below.
Definition Clause
"AAA" 19.3
"Buyout Option" 20.4
"Closing" 4.3
"Common Shares" Recital
"Confidential Information" 22.1
"Co-sale Notice" 17.4
"Expert" 19.3
"Notice of Exercise" 17.3
"Notice of Intention" 17.3
"Offered Shares" 17.3
"Offering Price" 17.3
"Preferred Shares" Recital
"Proposing Participant" 20.4
"Proposing Participant Price: 20.6
"Purchase Price" 20.6
"R&D Committee" 5.2.2
"Recipient Participant Price" 20.6
"Remaining Shareholders" 17.4
"Relevant Event" 20.2
"Selling Shareholder" 17.3
"Tag-Along Right" 17.4
"Transaction Proposal" 17.3
"Transfer" 17.1
"Transferee Terms" 17.4
"Transferring Shareholder" 17.4
1.3 Words importing the singular shall include the plural and vice versa.
1.4 Unless the context otherwise requires, reference to a recital, article,
paragraph, provision, clause or schedule is to a recital, article,
paragraph, provision, clause or schedule of or to this Agreement.
1.5 Reference to a statute or statutory provision includes a reference to it as
from time to time amended, extended or re-enacted.
1.6 The headings in this Agreement are inserted for convenience only and do not
affect its construction.
1.7 Unless the context or subject otherwise requires, references to words in
one gender include references to the other genders.
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1.8 Capitalized terms used but not defined herein shall have the meanings
ascribed in the Substantive Documents, if defined therein.
CLAUSE 2
BUSINESS
2.1 The primary objective of the Agreement is to regulate the business of the
development, testing, registration, manufacture, commercialization and
licensing of Products for use in the Field in the Territory and to achieve
the other objectives set out in this Agreement. The focus of the Business
will be to develop the Products using the Elan Intellectual Property, the
RPI Intellectual Property and the Newco Intellectual Property in accordance
with the Business Plan.
2.2. Should the Target Ribozyme [ * ] in accordance with the Business Plan, the
Parties shall promptly review in good faith [ * ], for the treatment of an
indication(s) to be determined in good faith by the Parties (the
"Substitute Target"). In either case, the Parties shall promptly negotiate
in good faith such amendments as are required to the License Agreements and
to this Agreement, such as amending the provisions regulating non-
competition, and to the research and development budgeted costs for the
Project.
2.3 The central management and control of Newco shall be exercised in Bermuda
and shall be vested in the Directors and such Persons as they may delegate
the exercise of their powers in accordance with the Newco Memorandum of
Association and Bye-Laws. Subject to Clause 9.2 below, the Participants
shall use their best endeavors to ensure that to the extent required
pursuant to the laws of Bermuda, and to ensure the sole residence of Newco
in Bermuda, all meetings of the Directors are held in Bermuda or other
jurisdictions outside the United States and generally to ensure that Newco
is treated as resident for taxation purposes in Bermuda.
CLAUSE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Newco: Newco hereby represents and
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warrants to each of the Shareholders as follows, as of the date hereof:
3.1.1 Organization: Newco is an exempted company duly organized, validly
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existing and in good standing under the laws of Bermuda, and has all
the requisite corporate power and authority to own and lease its
properties, to carry on its business as presently conducted and as
proposed to be conducted.
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3.1.2 Capitalization: As of the date hereof, the authorized capital
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stock of Newco consists of 6,000 shares of Common Shares and 6,000
shares of Preferred Shares. Prior to the date hereof, no shares of
capital stock of Newco have been issued.
3.1.3 Authorization: The execution, delivery and performance by Newco
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of this Agreement, including the issuance of the Shares, have been
duly authorized by all requisite corporate actions; this Agreement
has been duly executed and delivered by Newco and is the valid and
binding obligation of Newco, enforceable against it in accordance
with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors' rights
generally, and except as enforcement of rights to indemnity and
contribution hereunder may be limited by United States federal or
state securities laws or principles of public policy. The Shares,
when issued as contemplated hereby, will be validly issued and
outstanding, fully paid and non-assessable and not subject to
preemptive or any other similar rights of the Shareholders or
others.
3.1.4 No Conflicts: The execution, delivery and performance by Newco of
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this Agreement, the issuance, sale and delivery of the Shares, and
compliance with the provisions hereof by Newco, will not:
(i) violate any provision of applicable law, statute, rule or
regulation applicable to Newco or any ruling, writ,
injunction, order, judgment or decree of any court,
arbitrator, administrative agency or other governmental body
applicable to Newco or any of its properties or assets;
(ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with notice or
lapse of time or both) a default (or give rise to any right
of termination, cancellation or acceleration) under its
charter or organizational documents or any material contract
to which Newco is a party, except where such violation,
conflict or breach would not, individually or in the
aggregate, have a material adverse effect on Newco; or
(iii) result in the creation of any Encumbrance upon any of the
properties or assets of Newco.
3.1.5 Approvals: As of the date hereof, no permit, authorization,
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consent or approval of or by, or any notification of or filing with,
any Person is required in connection with the execution, delivery or
performance of this Agreement by Newco. Newco has full authority to
conduct its business as contemplated in the Business Plan and the
Substantive Documents.
3.1.6 Disclosure: This Agreement does not contain any untrue statement
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of a material fact or omit to state any material fact necessary to
make the statements contained herein not misleading. Newco is not
aware of any material contingency, event or circumstance relating to
its business or prospects, which could have a material
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adverse effect thereon, in order for the disclosure herein relating
to Newco not to be misleading in any material respect.
3.1.7 No Business; No Liabilities: Newco has not conducted any business or
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incurred any liabilities or obligations prior to the date hereof,
except solely in connection with its organization and formation.
3.2 Representations and Warranties of the Shareholders: Each of the
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Shareholders hereby severally represents and warrants to Newco as follows
as of the date hereof:
3.2.1 Organization: Such Shareholder is a corporation duly organized and
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validly existing under the laws of its jurisdiction of organization
and has all the requisite corporate power and authority to own and
lease its respective properties, to carry on its respective business
as presently conducted and as proposed to be conducted and to carry
out the transactions contemplated hereby.
3.2.2 Authority: Such Shareholder has full legal right, power and
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authority to enter into this Agreement and to perform its
obligations hereunder, which have been duly authorized by all
requisite corporate action. This Agreement is the valid and binding
obligation of such Shareholder, enforceable against it in accordance
with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors' rights
generally, and except as enforcement of rights to indemnity and
contribution hereunder may be limited by United States federal or
state securities laws or principles of public policy.
3.2.3 No Conflicts: The execution, delivery and performance by such
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Shareholder of this Agreement, purchase of the Shares, and
compliance with the provisions hereof by such Shareholder will not:
(i) violate any provision of applicable law, statute, rule or
regulation known by and applicable to such Shareholder or
any ruling, writ, injunction, order, judgment or decree of
any court, arbitrator, administrative agency or other
governmental body applicable to such Shareholder or any of
its properties or assets;
(ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with notice or
lapse of time or both) a default (or give rise to any right
of termination, cancellation or acceleration) under the
charter or organizational documents of such Shareholder or
any material contract to which such Shareholder is a party,
except where such violation, conflict or breach would not,
individually or in the aggregate, have a material adverse
effect on such Shareholder; or
(iii) result in the creation of any Encumbrance upon any of the
properties or assets of such Shareholder.
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3.2.4 Approvals: As of the date hereof, no permit,
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authorization, consent or approval of or by, or any
notification of or filing with, any Person is required in
connection with the execution, delivery or performance of
this Agreement by such Shareholder.
3.2.5 Investment Representations: Such Shareholder is
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sophisticated in transactions of this type and capable of
evaluating the merits and risks of its investment in Newco.
Such Shareholder has not been formed solely for the purpose
of making this investment and such Shareholder is acquiring
the Common Shares and Preferred Shares for investment for
its own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution
of any part thereof. Such Shareholder understands that the
Shares have not been registered under the Securities Act or
applicable state and foreign securities laws by reason of a
specific exemption from the registration provisions of the
Securities Act and applicable state and foreign securities
laws, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and
the accuracy of such Shareholders' representations as
expressed herein. Such Shareholder understands that no
public market now exists for any of the Shares and that
there is no assurance that a public market will ever exist
for such Shares.
CLAUSE 4
AUTHORIZATION AND CLOSING
4.1 Newco has authorized the issuance to (i) EIS of 2,388 shares of
Preferred Shares, and (ii) RPI of 6,000 shares of Common Shares and
3,612 shares of Preferred Shares, issuable as provided in Clause 4.4
hereof
4.2 RPI and EIS hereby subscribe for the number of Shares set forth in
Clause 4.1 and shall pay to Newco in consideration therefor, by wire
transfer of immediately available funds (to a bank account established
by Newco in connection with he Closing) the subscription amounts each
as provided in Clause 4.4.1.
4.3 The closing (the "Closing") shall take place at the offices of Brock
Silverstein LLC at 800 Third Avenue, New York, New York 10022 on the
date hereof or such other places if any, as the Parties may agree and
shall occur contemporaneously with the closing under the RPI
Securities Purchase Agreement.
4.4 At the Closing, each of the Shareholders shall take or (to the extent
within its powers) cause to be taken the following steps at directors
and shareholder meetings of Newco, or such other meetings or
locations, as appropriate:
4.4.1 Newco shall issue and sell to EIS, and EIS shall purchase from
Newco, upon the
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terms and subject to the conditions set forth herein, 2,388
shares of Preferred Shares for an aggregate purchase price of
$2,985,000.00. Newco shall issue and sell to RPI, and RPI shall
purchase from Newco, upon the terms and conditions set forth
herein, 6,000 shares of Common Shares for an aggregate purchase
price of $7,500,000.00 and 3,612 shares of Preferred Shares for
an aggregate purchase price of $4,515,000.00. The total aggregate
purchase price for all Shares is $15,000,000.00.
4.4.2 the Parties shall execute and deliver to each other, as
applicable, certificates in respect of the Common Shares and
Preferred Shares described above and any other certificates,
resolutions or documents which the Parties shall reasonably
require;
4.4.3. the adoption by Newco of Newco Memorandum of Association and Bye-
Laws;
4.4.4. the appointment of Kevin Insley, Kevin Butler, David Astwood,
Alene A. Holzman, and Ralph E. Christoffersen as Directors of
Newco;
4.4.5. the resignation of all directors and the secretary of Newco
holding office prior to the execution of this Agreement and
delivery of written confirmation under seal by each Person so
resigning that he has no claim or right of action against Newco
and that Newco is not in any way obligated or indebted to him;
and
4.4.6. the transfer to Newco of the share register.
4.5 Exemption from Registration:
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The Shares will be issued under an exemption or exemptions from
registration under the Securities Act. Accordingly, the certificates
evidencing the Shares shall, upon issuance, contain the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY SECURITIES LAWS OF A STATE OR OTHER JURISDICTION AND MAY NOT
UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF (OTHER THAN TO AN AFFILIATE OF THE ORIGINAL HOLDER OR
AS OTHERWISE PERMITTED IN THE AGREEMENT PURSUANT TO WHICH THEY
WERE ISSUED) EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS, OR (ii) TO THE EXTENT APPLICABLE,
RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE UNDER THE
SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES)
TOGETHER WITH AN
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OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION
THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS.
4.6. EIS and RPI shall use reasonable efforts to file any documents that require
filing with the Registrar of Companies in Bermuda within the prescribed
time limits.
4.7. In the event that EIS exercises the Exchange Right, Newco shall,
immediately upon such exercise, take all necessary steps to ensure that EIS
is duly and validly issued and has full legal right, title and interest in
and to the shares of Preferred Shares covered thereby. The Parties
acknowledge that such Preferred Shares have been pledged to EIS pursuant to
Clause 4.8 below and that EIS has physical possession of such Preferred
Shares.
4.8. In order to secure RPI's obligations pursuant to the Exchange Right, RPI
hereby pledges, assigns and sets over to EIS, all of RPI's right, title and
interest in and to all Newco Shares (as defined in the RPI Securities
Purchase Agreement) deliverable by RPI upon exercise of the Exchange Right
(including share distributions and dividends thereon). RPI shall cause to
be delivered to EIS all of the certificates together with duly executed
stock power in favor of EIS evidencing such shares, and cause to be filed
with the Secretary of State of Delaware an appropriate UCC-1 financing
statement in respect of such pledge, assignment or setting over, and take
all other necessary, appropriate and customary actions in connection
therewith. Such pledge shall be governed by the applicable provisions of
the Delaware Uniform Commercial Code. Upon exercise of the Exchange
Right, EIS shall be entitled to keep and retain such share certificates,
which shall then be owned by EIS in accordance with the terms thereof. In
connection with the foregoing, Newco and the Participants shall take all
necessary or appropriate steps to ensure such ownership by EIS. Until EIS
exercises the Exchange Right, RPI shall retain all rights in and to the
pledged Newco Shares (including without limitation all voting, dividend,
liquidation and other rights), subject only to this pledge and the terms of
this Agreement.
CLAUSE 5
DIRECTORS; MANAGEMENT AND R&D COMMITTEES
5.1. Directors:
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5.1.1 Prior to the exercise of the Exchange Right, the Board shall be
composed of five Directors.
RPI shall have the right to nominate four directors of Newco
("RPI Directors") and EIS shall have the right to nominate one
Director of Newco ("EIS Director")
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which Director, save as further provided herein, shall only be
entitled to 15% of the votes of the Board.
In the event that the Exchange Right is exercised by EIS within
two years following the Closing Date, the EIS Director shall only
be entitled to 15% of the votes of the Board until the expiry of
two years from the Closing Date.
In the event that the Exchange Right is exercised by EIS at any
time after two years following the Closing Date or upon the
expiry of two years following the Closing Date where the Exchange
Right has been exercised by EIS within two years following the
Closing Date, each of RPI, and EIS shall cause the Board to be
reconfigured so that an equal number of Directors are designated
by EIS and RPI and that each of the Directors has equal voting
power.
5.1.2 If EIS removes the EIS Director, or RPI removes any of the RPI
Directors, EIS or RPI, as the case may be, shall indemnify the
other Shareholder against any claim by such removed Director
arising from such removal.
5.1.3 The Directors shall meet not less than three times in each
Financial Year and all Board meetings shall be held in Bermuda to
the extent required pursuant to the laws of Bermuda or to ensure
the sole residence of Newco in Bermuda.
5.1.4 At any such meeting, the presence of the EIS Director and at
least two of the RPI Directors shall be required to constitute a
quorum and, subject to Clause 18 hereof, the affirmative vote of
a majority of the Directors present at a meeting at which such a
quorum is present shall constitute an action of the Directors. In
the event of any meeting being inquorate, the meeting shall be
adjourned for a period of seven days. A notice shall be sent to
the EIS Director and the RPI Directors specifying the date, time
and place where such adjourned meeting is to be held and
reconvened.
5.1.5 On the Closing Date, RPI may appoint one of the RPI Directors to
be the chairman of Newco. The chairman of Newco shall hold office
until:
(i) the first meeting of the Board following the exercise by EIS
of the Exchange Right, where the Exchange Right has been
exercised by EIS after two years following the Closing Date;
or
(ii) the first meeting of the Board following the expiry of two
years following the Closing Date where the Exchange Right
has been exercised by EIS within two years following the
Closing Date
(in each case the "Chairman Status Board Meeting")
After the Chairman Status Board Meeting, each of EIS and RPI,
beginning with EIS at the Chairman Status Board Meeting, shall
have the right, exercisable
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alternatively, of nominating one Director to be chairman of Newco
for a term of one year.
If the chairman is unable to attend any meeting of the Board held
prior to the Chairman Status Board Meeting, the RPI Directors
shall be entitled to appoint another RPI Director to act as
chairman in his place at the meeting.
If the chairman of Newco is unable to attend any meeting of the
Board held after the Chairman Status Board Meeting, the Directors
shall be entitled to appoint another Director to act as chairman
of Newco in his place at the meeting.
5.1.6 In case of an equality of votes at a meeting of the Board, the
chairman of Newco shall not be entitled to a second or casting
vote. In the event of continued deadlock, the Board shall resolve
the deadlock pursuant to the provisions set forth in Clause 19.
5.2 Management and R&D Committees:
------------------------------
5.2.1 Newco's board of directors shall appoint a management committee
(the "Management Committee") to consist initially of four
members, two of whom shall be nominated by Elan and two of whom
shall be nominated by RPI, and each of whom shall be entitled to
one vote, whether or not present at any Management Committee
meeting. Decisions of the Management Committee shall require
approval of at least one Elan nominee on the Management Committee
and one RPI nominee on the Management Committee.
Each of Elan and RPI shall be entitled to remove any of their
nominees to the Management Committee and appoint a replacement in
place of any nominees so removed. The number of members of the
Management Committee may be altered if agreed to by a majority of
the directors of Newco; provided that, each of Elan and RPI shall
be entitled to appoint an equal number of members to the
Management Committee. The Management Committee shall be
responsible for, inter alia, devising, implementing and reviewing
strategy for the Project.
5.2.2 The Management Committee shall appoint a research and development
committee (the "R&D Committee"), which shall initially be
comprised of four members, two of whom shall be nominated by Elan
and two of whom shall be nominated by RPI, and each of whom shall
have one vote, whether or not present at an R&D Committee meeting
during which research and development issues are discussed.
Decisions of the R&D Committee shall require approval of at least
one Elan nominee on the R&D Committee and one RPI nominee on the
R&D Committee.
Each of Elan and RPI shall be entitled to remove any of their
nominees to the R&D Committee and appoint a replacement in place
of any nominees so removed. The number of members of the R&D
Committee may be altered if agreed to by a majority of the
directors of Newco provided that each of Elan and
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RPI shall be entitled to appoint an equal number of members to
the R&D Committee.
5.2.3 The R&D Committee shall be responsible for:
5.2.3.1 designing that portion of the Business Plan that
relates to the Project for consideration by the
Management Committee;
5.2.3.2 establishing a joint Project team consisting of an
equal number of team members from Elan and RPI,
including one Project leader from each of Elan and RPI;
and
5.2.3.3 implementing such portion of the Business Plan that
relates to the Project, as approved by the Management
Committee.
5.2.4 In the event of any dispute amongst the R&D Committee, the R&D
Committee shall refer such dispute to the Management Committee
whose decision on the dispute shall be binding on the R&D
Committee. If the Management Committee cannot resolve the matter
after 15 days or such other period as may be agreed by the
Management Committee, the dispute will be referred to the
President of Elan Pharmaceutical Technologies and the Chief
Executive Officer of RPI, and thereafter, in the event of
continued deadlock, pursuant to the deadlock provisions to be set
forth in Clause 19, involving inter alia, the referral of the
dispute to an expert, whose decision, however, will ultimately be
non-binding on the Participants.
CLAUSE 6
THE BUSINESS PLAN AND REVIEWS
6.1 The Directors shall meet together as soon as reasonably practicable after
the Closing Date hereof and shall agree upon and approve the Business Plan
for the current Financial Year within 60 days of the Closing Date with
respect to the research, development, and commercialization of the Product,
which Business Plan shall contain, among other things, to the extent
practicable, the research and development objectives, desired Product
specifications, clinical indications, preliminary clinical trial designs
(Phase I/II), development timelines, budgeted costs and the relative
responsibilities of RPI and Elan as it relates to the implementation of the
R&D Plan.
6.2. The Business Plan shall be subject to ongoing review by the Directors and
the unanimous approval of the Board on a quarterly basis upon mutual
written agreement.
6.3. Neither Participant shall be obliged to provide funding to Newco in the
absence of quarterly approval of the Business Plan and a determination by
each Participant, in its sole discretion, that Subsequent Funding (as such
term is defined in the Funding Agreement) shall be provided for the
development of the Products.
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CLAUSE 7
RESEARCH AND DEVELOPMENT WORK
7.1 Research and development work related to the Products and the Newco
Intellectual Property shall be conducted in accordance with the research
and development program developed by the R&D Committee and approved by the
Management Committee.
7.2 The Parties acknowledge that in addition to the Elan License, Elan granted
to Newco the Elan Research License pursuant to the Elan License Agreement
solely to use the System for research and to perform clinical
investigations to determine the commercial viability of the continuous
subcutaneous administration of Angiozyme(TM) using the System. If the
Parties jointly determine that the continuous subcutaneous administration
of Angiozyme(TM) using the System is commercially viable, then the Parties
shall in good faith negotiate a nonexclusive license to Newco of the Elan
Intellectual Property and of the RPI Intellectual Property to make, have
made, import, use, offer for sale and sell such product, subject to then
existing contractual obligations. Such license agreement shall contain
normal commercial terms, provided that (i) the research, development and
commercialization of such product shall be without any cost or obligation
whatsoever to Elan without Elan's prior written consent which may be
withheld in Elan's sole discretion, and (ii) [ * ]
Notwithstanding anything contained in this Clauses 7.2 to the contrary,
Newco shall not have the license or right to manufacture or have
manufactured the System with respect to the Product or to manufacture or
have manufactured Angiozyme(TM) with respect to the product described in
this Clause 7.2. The Parties agree that the manufacture of the System and
Angiozyme(TM) is subject to Clause 14 below.
7.3 Subject to the provisions of Clause 6.3, Elan and RPI shall undertake at
their discretion research and development work related to the development
and commercialization of the Products, at the request of Newco and as
articulated in the Business Plan, in furtherance of the development and
commercialization of the Products and cultivation of patent rights and
know-how related to the Elan Intellectual Property, RPI Intellectual
Property and Newco Intellectual Property. The cost of such development work
shall be Elan's and RPI's, as the case may be, fully-burdened actual costs
in respect thereof, plus [*] of such costs. Research and development work
that is sub-contracted by Elan or RPI to third party providers shall be
charged by Elan or RPI to Newco at the amount invoiced by the relevant
third party provider. Newco shall pay RPI and Elan for any research and
development work carried out by them on behalf of Newco at the end of each
month during the Research and Development Program, subject to the proper
vouching of research and development work and expenses. An invoice shall be
issued to Newco by RPI or Elan, as applicable, by the 15/th/ day of the
month following the month in which work was performed.
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7.4 Elan and RPI shall use reasonable efforts in undertaking any such research
and development work undertaken for Newco hereunder to conduct such
research and development work in a professional and timely manner.
7.5 Elan and RPI shall permit Newco or its duly authorized representative on
reasonable notice and at any reasonable time during normal business hours
to have access to inspect and audit the accounts and records of Elan or RPI
and any other book, record, voucher, receipt or invoice relating to the
calculation or the cost of the Research and Development Program and to the
accuracy of the reports which accompanied them. Any such inspection of
Elan's or RPI's records, as the case may be, shall be at the expense of
Newco, except that if such inspection reveals an overpayment in the amount
paid to Elan or RPI, as the case may be, for the Research and Development
Program hereunder in any Financial Year of [ * ] or more of the amount due
to Elan or RPI, as the case may be, then the expense of such inspection
shall be borne solely by Elan or RPI, as the case may be, instead of by
Newco. Any surplus over the sum properly payable by Newco to Elan or RPI,
as the case may be, shall be paid promptly by Elan or RPI, as the case may
be, to Newco. If such inspection reveals a deficit in the amount of the sum
properly payable to Elan or RPI, as the case may be, by Newco, Newco shall
pay the deficit to Elan or RPI, as the case may be.
CLAUSE 8
COMMERCIALIZATION
8.1 Newco shall diligently pursue the research, development, prosecution and
commercialization of the Products as provided in the Business Plan.
8.2 At such time as Newco notifies Elan in writing that Newco in good faith
intends to commercialize a Product, Elan shall have a [ * ] the terms of
any agreement for [ * ], which option shall be exercised within [*] days of
Elan's receipt of such written notification from Newco (the "Elan/Newco
Option"); [ * ]. If Elan elects to enter into such negotiations, the
Parties shall negotiate in good faith the terms of an applicable agreement.
If, despite good faith negotiations, Elan and Newco do not reach agreement
within [ * ] from [ * ], then Newco shall be free to enter into
negotiations and an agreement with a third party (other than a
Technological Competitor of Elan) upon which the third party would
commercialize the relevant Product in the Territory, which terms when taken
as a whole, are not more favourable to the third party than the principal
terms of the last written proposal offered by Newco to Elan or by Elan to
Newco, as the case may be. The Parties shall act in good faith and use
their reasonable commercial judgement when negotiating with such third
party for the commercialization of the Product in the Territory. For
purposes of this Clause 8.2, the term Elan shall include Elan and its
Affiliates.
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CLAUSE 9
SUBLICENSE AND ASSIGNMENT RIGHTS
9.1 Newco shall be permitted to assign or sublicense the Newco
Intellectual Property and to enter into agreements with third parties
for the development of the Newco Intellectual Property upon unanimous
approval by the Management Committee.
9.2 Upon 30 days prior notice in writing from Elan to Newco and RPI, Newco
shall assign the Newco Intellectual Property from Newco to a wholly-
owned subsidiary of Newco to be incorporated in Ireland, which company
shall be newly incorporated by Elan to facilitate such assignment.
9.3 The Parties acknowledge and agree to be bound by the provisions of
Clause 2.6 of the Elan License Agreement and the provisions of Clause
2.6 of the RPI License Agreement which set forth the agreement between
the Parties thereto in relation to the assignment and sub-licensing of
the Elan Intellectual Property and the RPI Intellectual Property
respectively.
CLAUSE 10
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/NON-COMPETITION
10.1. The Parties acknowledge and agree to be bound by the provisions of
Clause 3 of the Elan License Agreement and Clause 3 of the RPI License
Agreement which set forth the agreement between the parties thereto in
relation to the ownership of the Elan Intellectual Property, the RPI
Intellectual Property and the Newco Intellectual property
respectively.
10.2 The Parties acknowledge and agree to be bound by the provisions of
Clause 4 of the Elan License Agreement and the provisions of Clause 4
of the RPI License Agreement which set forth the agreement between the
parties thereto in relation to the non-competition obligations of Elan
and RPI, respectively.
CLAUSE 11
INTELLECTUAL PROPERTY RIGHTS
11.1 Elan, at its expense and sole discretion shall (i) secure the grant of
any patent applications within the Elan Patents that relate to the
Field; (ii) file and prosecute patent applications on patentable
inventions and discoveries within the Elan Improvements that relate to
the Field; (iii) defend all such applications against third party
oppositions; and (iv) maintain in force any issued letters patent
within the Elan Patents that relate to the Field (including
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any letters patent that may issue covering any such Elan Improvements
that relate to the Field). Elan shall have the right in its sole
discretion to control such filing, prosecution, defense and
maintenance provided that Newco and RPI at their request shall be
provided with copies of all documents relating to such filing,
prosecution, defense and maintenance in sufficient time to review such
documents and comment thereon prior to filing.
11.2 RPI, at its expense and sole discretion, shall (i) secure the grant of
any patent applications within the RPI Patents that relate to the
Field; (ii) file and prosecute patent applications on patentable
inventions and discoveries within the RPI Improvements that relate to
the Field; (iii) defend all such applications against third party
oppositions; and (iv) maintain in force any issued letters patent
within the RPI Patents that relate to the Field (including any letters
patent that may issue covering any such RPI Improvements that relate
to the Field). RPI shall have the right in its sole discretion to
control such filing, prosecution, defense and maintenance provided
that Elan and Newco at their request shall be provided with copies of
all documents relating to such filing, prosecution, defense and
maintenance in sufficient time to review such documents and comment
thereon prior to filing.
11.3 In the event that Elan does not intend to file for patent protection
on patentable inventions or discoveries within the Elan Intellectual
Property that relates to the Field in one or more countries in the
Territory after providing written notice to Newco and RPI, Newco shall
have the option at Newco's expense, upon the prior written approval of
Elan which approval shall not be unreasonably withheld, to request
Elan to file and prosecute such patent application(s) jointly on
behalf of Newco and RPI. Upon such written request from Newco, Elan
shall be responsible for preparing and prosecuting and otherwise
seeking patent protection for such Elan Intellectual Property
described in this Clause 11.3. Any such Elan Intellectual Property
shall be owned by Elan but Elan shall grant to Newco a royalty free
exclusive license to such Elan Intellectual Property in the Field. The
Parties shall have the right to remove their confidential information
from any such patent application.
11.4 In the event that RPI does not intend to file for patent protection on
patentable inventions or discoveries within the RPI Intellectual
Property that relates to the Field in one or more countries in the
Territory after providing written notice to Newco and Elan, Newco
shall have the option at Newco's expense, upon the prior written
approval of RPI which approval shall not be unreasonably withheld, to
request RPI to file and prosecute such patent application(s) jointly
on behalf of Newco and Elan. Upon such written request from Newco, RPI
shall be responsible for preparing and prosecuting and otherwise
seeking patent protection for such RPI Intellectual Property described
in this Clause 11.3. Any such RPI Intellectual Property shall be owned
by RPI but RPI shall grant a royalty free exclusive license to Newco
to such RPI Intellectual Property in the Field. The Parties shall have
the right to remove their confidential information from any such
patent application.
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11.5 Newco at its expense shall have the right but shall not be obligated
(i) to file and prosecute patent applications on patentable inventions
and discoveries within the Newco Intellectual Property; (ii) to defend
all such applications against third party oppositions; and (iii) to
maintain in force any issued letters patent within the Newco Patents
(including any patents that issue on patentable inventions and
discoveries within the Newco Intellectual Property). Newco shall have
the right to control such filing, prosecution, defense and maintenance
provided that the other Parties shall be provided with copies of all
documents relating to such filing, prosecution, defense, and
maintenance in sufficient time to review such documents and comment
thereon prior to filing. The Parties shall have the right to remove
their confidential information from any such patent application.
11.6 In the event that Newco informs both Elan and RPI that it does not
intend to file an application on the Newco Intellectual Property in or
outside the Field, Elan shall have the right to file and prosecute
such patent applications on inventions that Elan invents solely or
which relate predominantly to the Elan Intellectual Property, and RPI
shall have the right to file and prosecute such patent applications on
inventions which RPI invents solely or which relate predominantly to
the RPI Intellectual Property, and Elan and RPI agree to negotiate in
good faith on the course of action to be taken with respect to Newco
inventions that relate to both the Elan and RPI Intellectual Property.
The Parties shall have the right to remove their confidential
information from any such patent application.
11.7 The Parties shall promptly inform each other in writing of any actual
or alleged unauthorized use of any Elan Intellectual Property, the RPI
Intellectual Property or the Newco Intellectual Property by a third
party of which it becomes aware and provide the others with any
available evidence of such unauthorized use.
11.8 At its option, as the case may be, Elan or RPI shall have the first
option to enforce at its own expense and for its own benefit any
unauthorized use of its respective Intellectual Property (the Elan
Intellectual Property or the RPI Intellectual Property as the case may
be) in the Field. At the enforcing party's request, the other Parties
shall cooperate with such action. Should Elan or RPI decide not to
enforce the Elan Intellectual Property or the RPI Intellectual
Property respectively, against such unauthorized use in the Field,
within a reasonable period but in any event within twenty (20) days
after receiving written notice of such actual or alleged unauthorized
use, Newco may in its discretion initiate such proceedings in its own
name, at its expense and for its own benefit, and at such Party's
request, Elan and RPI shall cooperate with such action. Any recovery
remaining after the deduction by Newco of the reasonable expenses
(including attorney's fees and expenses) incurred in relation to such
enforcement proceeding shall belong to Newco. Alternatively, the
Parties may agree to institute such proceedings in their joint names
and shall reach agreement as to the proportion in which they shall
share the proceeds of any such proceedings, and the expense of any
costs not recovered, or the costs or damages payable to the third
party. If the infringement of the Elan Patents or the RPI Patents
affects both the Field as well as other products being developed or
commercialized by RPI or Elan or its commercial partners outside the
Field, RPI or Elan shall endeavor to agree as to the manner in which
the proceedings should be instituted and as to the proportion in which
they shall share the proceeds of any such proceedings,
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and the expense of any costs not recovered, or the costs or damages
payable to the third party.
11.9 Newco shall have the first right but not the obligation to bring suit
or otherwise take action against any unauthorized use of the Newco
Intellectual Property. If any such alleged use occurs that gives rise
to a cause of action both inside and outside the Field, Newco, in
consultation with the other Parties, shall determine the course of
action to be taken. In the event that Newco takes such action, Newco
shall do so at its own cost and expense and all damages and monetary
award recovered in or with respect to such action shall be the
property of Newco. Newco shall keep Elan and RPI informed of any
action in a timely manner so as to enable RPI and Elan to provide
input in any such action and Newco shall reasonably take into
consideration any such input. At Newco's request, the Parties shall
cooperate with any such action at Newco's cost and expense.
11.10 In the event that Newco does not bring suit or otherwise take action
against any unauthorized use of the Newco Intellectual Property (i) if
only one Party determines to pursue such suit or take such action at
its own cost and expense, it shall be entitled to all damages and
monetary award recovered in or with respect to such action and (ii) if
the other Parties pursue such suit or action outside of Newco, they
shall negotiate in good faith an appropriate allocation of costs,
expenses and recovery amounts. At the Party's request, Newco shall
cooperate with any such action at the Party's cost and expense.
11.11 In the event that a claim or proceeding is brought against Newco by a
third party alleging that the sale, distribution or use of a Product
in the Territory constitutes the unauthorized use of the intellectual
property rights of such Party, Newco shall promptly advise the other
Parties of such threat or suit.
11.12 Save in respect of claims by Newco against either Party, or by an
Independent Third Party against Newco, where Elan is in breach of a
representation or warranty under [ * ] or where RPI is in breach of a
representation or warranty under [ * ] shall indemnify, defend and
hold harmless Elan or RPI, as the case may be, against all actions,
losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys fees) relating directly or indirectly to all such
claims or proceedings referred to in [ * ], provided that Elan
or RPI, as the case may be, shall not acknowledge to the third party
or to any other person the validity of any claims of such a third
party, and shall not compromise or settle any claim or proceedings
relating thereto without the prior written consent to Newco, not to be
unreasonably withheld or delayed. At its option, Elan or RPI, as the
case may be, may elect to take over the conduct of such proceedings
from Newco provided that Newco's indemnification obligations shall
continue; the costs of defending such claim shall be borne by Elan or
RPI, as the case may be and such Party shall not compromise or settle
any such claim or proceeding without the prior written consent of
Newco, such consent not to be unreasonably withheld or delayed.
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CLAUSE 12
CROSS LICENSING/EXPLOITATION OF PRODUCTS OUTSIDE THE FIELD
12.1 Solely for the purpose of and insofar as is necessary, in each case,
for Elan to perform research and development work on behalf of Newco,
Newco shall grant to Elan a non-exclusive, worldwide, royalty-free,
fully paid-up license for the term of the Licenses:
12.1.1 to use the Newco Intellectual Property in the Field, and
12.1.2 subject to the terms and conditions of the RPI License, a
sublicense to use the RPI Intellectual Property in the
Field.
12.2 Solely for the purpose of and insofar as is necessary, in each case,
for RPI to conduct research and development work on behalf of Newco,
Newco shall grant to RPI a non-exclusive, worldwide, royalty-free,
fully paid-up license for the term of the Licenses:
12.2.1 to use the Newco Intellectual Property in the Field, and
12.2.2 subject to the terms and conditions of the Elan License and
the Elan Research License, a sublicense to use the Elan
Intellectual Property in the Field.
12.3 Subject to the provisions of this Clause 12, Newco hereby grants to
each of Elan and RPI a license to the Newco Intellectual Property as
follows:
12.3.1 Newco hereby grants to Elan a worldwide, perpetual, fully-
paid and royalty-free license, with the right to sublicense,
to the Newco Intellectual Property as it relates to the
System for use outside the Field on an as-is basis without
recourse, representation or warranty whether express or
implied, including warranties of merchantability or fitness
for a particular purpose, or infringement of third party
rights, and all such warranties are expressly disclaimed.
12.3.2 Newco hereby grants to RPI a worldwide, perpetual, fully-
paid and royalty-free license, with the right to sublicense,
to the Newco Intellectual Property as it relates to the
Target Ribozyme for use outside the Field on an as-is basis
without recourse, representation or warranty whether express
or implied, including warranties of merchantability or
fitness for a particular purpose, or infringement of third
party rights, and all such warranties are expressly
disclaimed.
CLAUSE 13
REGULATORY
13.1 Newco shall keep the other Parties promptly and fully advised of
Newco's regulatory activities, progress and procedures. Newco shall
inform the other Parties of any dealings
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it shall have with an RHA, and shall furnish the other Parties with
copies of all correspondence relating to the Products. The Parties
shall collaborate to obtain any required Regulatory Approval of the
RHA to market the Products.
13.2 Subject to the unanimous determination of the Management Committee
that one or more regulatory approvals for permission to conduct
clinical studies and/or for commercialization should be held in the
name of Newco's commercial partner, such regulatory approvals related
to the Products and/or the Newco Intellectual Property shall be
prosecuted and owned by Newco in accordance with the Business Plan.
All regulatory approvals and submissions relating to the Target
Ribozyme, including without limitation, the DMF, shall be processed by
and be the property of RPI and at all times held in RPI's sole name.
All regulatory approvals and submissions relating to the System,
including without limitation, the MAF, shall be processed by and be
the property of Elan and at all times held in Elan's sole name. Each
of Elan and RPI will authorize Newco to reference such Party's
respective regulatory approval and submission, as described herein,
with the FDA and such foreign agency to the extent necessary for
Newco's regulatory purposes.
13.3 It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with the RHA's
insofar as obtaining approval is concerned and such uncertainties form
part of the business risk involved in undertaking the form of
commercial collaboration as set forth in this Agreement.
CLAUSE 14
MANUFACTURING
14.1 Subject to the provisions of Clause 14.2, Newco shall be responsible
for manufacturing, or having manufactured, all quantities of Products
required for the development and commercialization of Products for use
in the Field.
14.2 Notwithstanding the provisions of Clause 14.1, Elan shall have the
first right to manufacture and supply, and/or subcontract the
manufacture and supply, of (a) the System with respect to the Product,
and (b) the System with respect to the product relating to
Angiozyme(TM), on standard commercial terms negotiated in good faith
by Newco and Elan. RPI shall have the first right to manufacture and
supply, and/or subcontract the manufacture and supply, of (1) the
Target Ribozyme with respect to the Product, and (2) Angiozyme(TM), on
standard commercial terms negotiated in good faith by Newco and RPI.
Any such supply agreement shall be negotiated and agreed by the
Parties not later than the date of completion of Phase III (as such
term is commonly used in connection with FDA applications) of the R&D
Plan. The terms of the said supply agreements shall be on normal
commercial terms, and shall be negotiated in good faith by the Parties
thereto.
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CLAUSE 15
TECHNICAL SERVICES AND ASSISTANCE
15.1 Whenever commercially and technically feasible, Newco shall contract
with RPI or Elan, as the case may be, to perform such other services
as Newco may require, other than those specifically dealt with
hereunder or in the License Agreements. In determining which Party
should provide such services, the Management Committee shall take into
account the respective infrastructure, capabilities and experience of
Elan and RPI. There shall be no obligation upon either of RPI or Elan
to perform such services.
15.2 Newco shall, if the Participants so agree, conclude an administrative
support agreement with Elan and/or RPI on such terms as the Parties
thereto shall in good faith negotiate. The administrative services
shall include one or more of the following administrative services as
requested by Newco:
15.2.1 accounting, financial and other services;
15.2.2 tax services;
15.2.3 insurance services;
15.2.4 human resources services;
15.2.5 legal and company secretarial services;
15.2.6 patent and related intellectual property services; and
15.2.7 all such other services consistent with and of the same type
as those services to be provided pursuant to this Agreement,
as may be required.
The foregoing list of services shall not be deemed exhaustive and may
be changed from time to time upon written request by Newco.
15.3. The Parties agree that each Party shall effect and maintain
comprehensive general liability insurance in respect of all clinical
trials and other activities performed by them on behalf of Newco. The
Shareholders and Newco shall ensure that the industry standard
insurance policies shall be in place for all activities to be carried
out by Newco.
15.4 If Elan or RPI so requires, RPI or Elan, as the case may be, shall
receive, at times and for periods mutually acceptable to the Parties,
employees of the other Party (such employees to be acceptable to the
receiving Party in the matter of qualification and competence) for
instruction in respect of the Elan Intellectual Property or the RPI
Intellectual Property, as the case may be, as necessary to further the
Project.
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15.5 The employees received by Elan or RPI, as the case may be, shall be subject
to obligations of confidentiality no less stringent than those set out in
Clause 22 and such employees shall observe the rules, regulations and
systems adopted by the Party receiving the said employees for its own
employees or visitors.
CLAUSE 16
AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY
Unless otherwise agreed by the Shareholders and save as may be provided to the
contrary herein:
16.1 the auditors of Newco shall be KPMG Peat Marwick of Vallis Building,
Hamilton, Bermuda;
16.2 the bankers of Newco shall be Bank of Bermuda or such other bank as may be
mutually agreed from time to time;
16.3 the accounting reference date of Newco shall be December 31st in each
Financial Year; and
16.4 the secretary of Newco shall be I.S. Outerbridge or such other Person as
may be appointed by the Directors from time to time.
CLAUSE 17
TRANSFERS OF SHARES;
RIGHT OF FIRST OFFER; TAG ALONG RIGHTS
General:
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17.1. Until such time as the Common Shares shall be registered pursuant to the
Exchange Act and be publicly traded in an established securities market,
no Shareholder shall, directly or indirectly, sell or otherwise transfer
(each, a "Transfer") any Shares held by it except in as expressly
permitted by and in accordance with the terms of this Agreement. Newco
shall not, and shall not permit any transfer agent or registrar for any
Shares to, transfer upon the books of Newco any Shares from any
Shareholder to any transferee, in any manner, except in accordance with
this Agreement, and any purported transfer not in compliance with this
Agreement shall be void.
During the Research and Development Term, no Shareholder shall, directly
or indirectly, sell or otherwise Transfer any of its legal and/or
beneficial interest in the Shares held by it to any other Person. After
completion of the Research and Development Term, a
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Shareholder may Transfer Shares provided such Shareholder complies with
the provisions of Clauses 17.2 and 17.3.
Notwithstanding anything contained herein to the contrary, at all times,
EIS and/or RPI shall have the right to Transfer any Shares to their
Affiliates provided, however, that such assignment does not result in
adverse tax consequences for any other Parties. EIS shall have the right
to Transfer any Shares to a special purpose financing or similar entity
established by Elan or EIS; provided, that such Affiliates or other
Permitted Transferee to which such legal and/or beneficial interest in the
Shares have been transferred shall agree to be expressly subject to and
bound by all the limitations and provisions which are embodied in this
Agreement.
17.2 No Shareholder shall, except with the prior written consent of the other
Shareholder, create or permit to subsist any Encumbrance over or in, all
or any of the Shares held by it (other than by a Transfer of such Shares
in accordance with the provisions of this Agreement).
17.3 Rights of First Offer:
----------------------
If at any time after the end of the Research and Development Term a
Shareholder shall desire to Transfer any Shares owned by it (a "Selling
Shareholder"), in any transaction or series of related transactions other
than a Transfer to an Affiliate or subsidiary or in the case of EIS to a
special purpose financing or similar entity established by EIS, then such
Selling Shareholder shall deliver prior written notice of its desire to
Transfer (a "Notice of Intention") (i) to Newco and (ii) to the
Shareholders who are not the Selling Shareholder (and any transferee
thereof permitted hereunder, if any), as applicable, setting forth such
Selling Shareholder's desire to make such Transfer, the number of Shares
proposed to be transferred (the "Offered Shares") and the proposed form of
transaction (the "Transaction Proposal"), together with any available
documentation relating thereto, if any, and the price at which such
Selling Shareholder proposes to Transfer the Offered Shares (the "Offer
Price"). The "Right of First Offer" provided for in this Clause 17 shall
be subject to any "Tag Along Right" benefiting a Shareholder which may be
provided for by Clause 17, subject to the exceptions set forth therein.
Upon receipt of the Notice of Intention, the Shareholders who are not the
Selling Shareholder shall have the right to purchase at the Offer Price
the Offered Shares, exercisable by the delivery of notice to the Selling
Shareholder (the "Notice of Exercise"), with a copy to Newco, within 10
business days from the date of receipt of the Notice of Intention. If no
such Notice of Exercise has been delivered by the Shareholders who are not
the Selling Shareholder within such 10-business day period, or such Notice
of Exercise does not relate to all of the Offered Shares covered by the
Notice of Intention, then the Selling Shareholder shall be entitled to
Transfer all of the Offered Shares to the intended transferee. In the
event that all of the Offered Shares are not purchased by the non-selling
Shareholders, the Selling Shareholder shall sell the available Offered
Shares within 30 days after the delivery of such Notice of Intention on
terms no more favorable to a third party than those presented to the non-
selling Shareholders. If such sale does not
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occur, the Offered Shares shall again be subject to the Right of First
Refusal set forth in Clause 17.3.
In the event that any of the Shareholders who are not the Selling
Shareholder exercises their right to purchase all of the Offered Shares
(in accordance with this Clause 17), then the Selling Shareholder shall
sell all of the Offered Shares to such Shareholder(s), in the amounts set
forth in the Notice of Intention, after not less than 10 business days and
not more than 25 business days from the date of the delivery of the Notice
of Exercise. In the event that more than one of the Shareholders who are
not the Selling Shareholders wish to purchase the Offered Shares, the
Offered Shares shall be allocated to such Shareholders on the basis of
their pro rata equity interests in Newco.
The rights and obligations of each of the Shareholders pursuant to the
Right of First Offer provided herein shall terminate upon the date that
the Common Shares are registered under Section 12(b) or 12(g) of the
Exchange Act.
At the closing of the purchase of all of the Offered Shares by the
Shareholders who are not the Selling Shareholder (scheduled in accordance
with Clause 17), the Selling Shareholder shall deliver certificates
evidencing the Offered Shares being sold, duly endorsed, or accompanied by
written instruments of transfer in form reasonably satisfactory to the
Shareholders who are not the Selling Shareholder, duly executed by the
Selling Shareholder, free and clear of any adverse claims, against payment
of the purchase price therefor in cash, and such other customary documents
as shall be necessary in connection therewith.
17.4 Tag Along Rights:
-----------------
Subject to Clause 17.3, a Shareholder (the "Transferring Shareholder")
shall not Transfer (either directly or indirectly), in any one transaction
or series of related transactions, to any Person or group of Persons, any
Shares, unless the terms and conditions of such Transfer shall include an
offer to the other Shareholders (the "Remaining Shareholders"), to sell
Shares at the same price and on the same terms and conditions as the
Transferring Shareholder has agreed to sell its Shares (the "Tag Along
Right").
In the event a Transferring Shareholder proposes to Transfer any Shares in
a transaction subject to this Clause 17.4, it shall notify, or cause to be
notified, the Remaining Shareholders in writing of each such proposed
Transfer. Such notice shall set forth: (i) the name of the transferee and
the amount of Shares proposed to be transferred, (ii) the proposed amount
and form of consideration and terms and conditions of payment offered by
the transferee (the "Transferee Terms") and (iii) that the transferee has
been informed of the Tag Along Right provided for in this Clause 17, if
such right is applicable, and the total number of Shares the transferee
has agreed to purchase from the Shareholders in accordance with the terms
hereof.
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The Tag Along Right may be exercised by each of the Remaining Shareholders
by delivery of a written notice to the Transferring Shareholder (the "Co-
sale Notice") within 10 business days following receipt of the notice
specified in the preceding subsection. The Co-sale Notice shall state the
number of Shares owned by such Remaining Shareholder which the Remaining
Shareholder wishes to include in such Transfer; provided, however, that
without the written consent of the Transferring Shareholder, the amount of
such securities belonging to the Remaining Shareholder included in such
Transfer may not be greater than such Remaining Shareholder's percentage
beneficial ownership of Fully Diluted Common Shares multiplied by the total
number of shares of 7 Diluted Common Shares to be sold by both the
Transferring Shareholder and all Remaining Shareholders. Upon receipt of a
Co-sale Notice, the Transferring Shareholder shall be obligated to transfer
at least the entire number of Shares set forth in the Co-sale Notice to the
transferee on the Transferee Terms; provided, however, that the
Transferring Shareholder shall not consummate the purchase and sale of any
Shares hereunder if the transferee does not purchase all such Shares
specified in all Co-sale Notices. If no Co-sale Notice has been delivered
to the Transferring Shareholder prior to the expiration of the 10 business
day period referred to above and if the provisions of this Section have
been complied with in all respects, the Transferring Shareholder shall have
the right for a 45 day calendar day period to Transfer Shares to the
transferee on the Transferee Terms without further notice to any other
party, but after such 45-day period, no such Transfer may be made without
again giving notice to the Remaining Shareholders of the proposed Transfer
and complying with the requirements of this Clause 17.
At the closing of any Transfer of Shares subject to this Clause 17, the
Transferring Shareholder, and the Remaining Shareholder, in the event such
Tag Along Right is exercised, shall deliver certificates evidencing such
securities as have been Transferred by each, duly endorsed, or accompanied
by written instruments of transfer in form reasonably satisfactory to the
transferee, free and clear of any adverse claim, against payment of the
purchase price therefor.
Notwithstanding the foregoing, this Clause 17 shall not apply to any sale
of Common Shares pursuant to an effective registration statement under the
Securities Act in a bona fide public offering.
CLAUSE 18
MATTERS REQUIRING PARTICIPANTS' APPROVAL
18.1 In consideration of RPI and Elan agreeing to enter into the License
Agreements, the Parties hereby agree that Newco shall not without the prior
approval of the EIS Director and the four RPI Directors:
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18.1.1. make a material Newco determination outside the ordinary course
of business, including, among other things, acquisitions or
dispositions of intellectual property and licenses or
sublicenses, discontinue Newco to a named country or jurisdiction
outside of Bermuda, changes in the Business or the Newco budget
as they relate to the Licensed Technologies; entry into joint
ventures and similar arrangements as they relate to the Licensed
Technologies and changes to the Business Plan as they relate to
the Licensed Technologies;
18.1.2. issue any unissued Shares or unissued Common Share Equivalents,
or create or issue any new shares (including a split of the
Shares) or Common Share Equivalents, except as expressly
permitted by the Newco Memorandum of Association and Bye-Laws;
18.1.3. alter any rights attaching to any class of share in the capital
of Newco or alter the Newco Memorandum of Association and Bye-
Laws;
18.1.4. consolidate, sub-divide or convert any of Newco's share capital
or in any way alter the rights attaching thereto;
18.1.5. dispose of all or substantially all of the assets of Newco;
18.1.6. do or permit or suffer to be done any act or thing whereby Newco
may be wound up (whether voluntarily or compulsorily), save as
otherwise expressly provided for in this Agreement;
18.1.7. enter into any contract or transaction except in the ordinary and
proper course of the Business on arm's length terms;
18.1.8. sub-license any of the Elan Intellectual Property or RPI
Intellectual Property, or license Newco Intellectual Property;
18.1.9. amend or vary the terms of the RPI License Agreement or the Elan
License Agreement;
18.1.10. permit a person other than Newco to own a Regulatory Approval
relating to the Product(s);
18.1.11. amend or vary the Business Plan or the Newco budget as they
relate to the Licensed Technologies;
18.1.12. alter the number of Directors;
18.1.13. whether any Shares of Newco shall be registered for public
trading with any governmental authority for public trading in any
securities market; and
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18.1.14. declare or pay any dividend or make any distribution, directly or
indirectly, with respect to its capital stock; or issue, sell,
exchange, deliver, redeem, purchase or otherwise acquire or
dispose of any shares of its capital stock or other securities.
CLAUSE 19
DISPUTES
19.1 During the Term of this Agreement, should any dispute or difference arise
amongst the members of the Management Committee, or between Elan and RPI,
or between Elan or RPI and Newco, the appropriate representatives of the
applicable Parties shall use good faith efforts to resolve such dispute or
difference promptly and to the mutual satisfaction of the affected Parties.
If with respect to any such dispute or difference (but excluding from the
remaining provisions of this Clause 19 any dispute or difference relating
to (i) the interpretation of any provision of this Agreement, (ii) the
interpretation or application of law, or (iii) the ownership of any
intellectual property, which disputes or differences shall be resolved, if
at all, by arbitration pursuant to Clause 24.8), such representatives
cannot reach a resolution to such dispute or difference within a reasonable
period, then any Party may forthwith give notice to the other Parties that
it wishes such dispute or difference to be referred to the chief executive
officer of RPI and the President of Elan Pharmaceutical Technologies.
19.2 In any event of a notice being served in accordance with Clause 19.1, each
of the Participants shall within 14 days of the service of such notice
prepare and circulate to the chief executive officer of each Participant a
memorandum or other form of statement setting out its position on the
matter in dispute and its reasons for adopting that position. Each
memorandum or statement shall be considered by the chief executive officers
of the Participants who shall endeavor using good faith diligent efforts to
resolve the dispute. If the chief executive officers of the Participants
agree upon a resolution or disposition of the matter, they shall each sign
a statement which sets out the terms of their agreement. The Participants
agree that they shall exercise the voting rights and other powers available
to them in relation to Newco to procure that the agreed terms are fully and
promptly carried into effect.
19.3 The chief executive officer of RPI and the President of Elan Pharmaceutical
Technologies shall, if they are unable to resolve a dispute or difference
when it is referred to them under Clause 19.1, within sixty (60) days of
such referral, refer the matter to an independent expert in pharmaceutical
product development and marketing (including clinical development and
regulatory affairs) jointly selected by the chief executive officers of the
Participants (the "Expert"). In the event the chief executive officers of
the Participants cannot agree upon the designation of the Expert, the
Participants shall request the American Arbitration Association ("AAA"),
sitting in the City of New York to select the Expert. In each case, the
Expert shall be selected having regard to his suitability to determine the
particular dispute or difference on which the Expert is being requested to
determine. Unless otherwise agreed between the chief executive officers,
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the following rules shall apply to the appointment of the Expert. The fees
of the AAA and the Expert shall be shared equally by the Participants. The
Expert shall be entitled to inspect and examine all documentation and any
other material which the Expert may consider to be relevant to the dispute.
The Expert shall afford each Party a reasonable opportunity (in writing or
orally) of stating reasons in support of such contentions as each Party may
wish to make relative to the matters under consideration. The Expert shall
give notice in writing of his determination to the Parties within such time
as may be stipulated in his terms of appointment or in the absence of such
stipulation as soon as practicable but in any event within four weeks from
the reference of the dispute or difference to him.
19.4 Any determination by the Expert of a dispute or difference shall not be
binding on the Parties.
CLAUSE 20
TERMINATION
20.1 This Agreement shall govern the operation and existence of Newco until (i)
terminated by written agreement of all Parties hereto or (ii) otherwise
terminated in accordance with this Clause 20.
20.2 For the purpose of this Clause 20, a "Relevant Event" is committed or
suffered by a Participant if:
20.2.1 it commits a breach of its material obligations under this
Agreement or the applicable License and fails to remedy it within
60 days of being specifically required in writing to do so by the
other Participant; provided, however, that if the breaching
Participant has proposed a course of action to rectify the breach
and is acting in good faith to rectify same but has not cured the
breach by the 60th day, such period shall be extended by such
period as is reasonably necessary to permit the breach to be
rectified; or
20.2.2 a distress, execution, sequestration or other process is levied
or enforced upon or sued out against a material part of its
property which is not discharged or challenged within 30 days; or
20.2.3 it is unable to pay its debts in the normal course of business;
or
20.2.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or
amalgamation, without the prior written consent of the other
Participant (such consent not to be unreasonably withheld); or
20.2.5 the appointment of a liquidator, receiver, administrator,
examiner, trustee or similar officer of such Participant or over
all or substantially all of its assets under
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the law of any applicable jurisdiction, including without
limitation, the United States of America, Bermuda or Ireland; or
20.2.6 an application or petition for bankruptcy, corporate re-
organization, composition, administration, examination,
arrangement or any other procedure similar to any of the
foregoing under the law of any applicable jurisdiction, including
without limitation, the United States of America, Bermuda or
Ireland, is filed, and is not discharged within 60 days, or a
Participant applies for or consents to the appointment of a
receiver, administrator, examiner or similar officer of it or of
all or a material part of its assets, rights or revenues or the
assets and/or the business of a Participant are for any reason
seized, confiscated or condemned.
20.4 If either Participant commits or suffers a Relevant Event, the other
Participant shall be entitled, within three months of the occurrence of the
Relevant Event, to require the defaulting Participant (the "Recipient
Participant") to sell on reasonable terms of payment to the non-defaulting
Participant (the "Proposing Participant") all (but not some only) of the
Shares, held or beneficially owned by the Recipient Participant for an
amount equal to [*] of the fair market value of the Shares of the Recipient
Participant (the "Buyout Option").
20.5 The Proposing Participant shall notify the Recipient Participant of the
exercise of the Buyout Option, no later than 30 business days prior to the
proposed exercise thereof, by delivering written notice to the Recipient
Participant stating that the Buyout Option is exercised and the price at
which the Proposing Participant is willing to purchase the Shares of the
Recipient Participant.
20.6 In the event that the Participants do not agree upon a purchase price for
the Shares within five Business Days following the receipt by the Recipient
Participant of written notice from the Proposing Participant pursuant to
Clause 20.5 above, the Proposing Participant may contact the AAA, sitting
in New York City and request that an independent US-based arbitrator who is
knowledgeable of the pharmaceutical/biotechnology industry be appointed
within 10 Business Days. The AAA shall endeavor to select an arbitrator
who is technically knowledgeable in the pharmaceutical/biotechnology
industry (and who directly and through his affiliates, has no business
relationship with, or shareholding in, either the Proposing Participant or
the Recipient Participant). Promptly upon being notified of the
arbitrator's appointment, the Proposing Participant and the Recipient
Participant shall submit to the arbitrator details of their assessment of
the fair market value for the Shares of the Recipient Participant together
with such information as they think necessary to validate their assessment.
The arbitrator shall notify the Recipient Participant of [*] of the fair
market value assessed by the Proposing Participant (the "Proposing
Participant Price") and shall notify the Proposing Participant of [*] of
the fair market value assessed by the Recipient Participant (the "Recipient
Participant Price"). The Proposing Participant and the Recipient
Participant shall then be entitled to make further submissions to the
arbitrator within five Business Days explaining why the Recipient
Participant Price or the Proposing Participant Price, as the case may be,
is unjustified. The arbitrator shall thereafter meet with the Proposing
Participant and the
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Recipient Participant and shall thereafter choose either the Recipient
Participant Price or the Proposing Participant Price (but not any other
price) as the purchase price for the Shares (the "Purchase Price") on the
basis of which price the Expert determines to be closer to [*] of the
fair market value for the Shares of the Recipient Participant. The
arbitrator shall use his best efforts to determine the Purchase Price
within 30 Business Days of his appointment. The Proposing Participant and
the Recipient Participant shall bear the costs of the arbitrator equally
provided that the arbitrator may, in his discretion, allocate all or a
portion of such costs to one Party. Any decision of the arbitrator shall
be final and binding.
20.7 The Proposing Participant shall purchase the Shares of the Recipient
Participant by delivery of the Purchase Price in cash no later than the
15th Business Day following determination of the Purchase Price by the
Expert.
20.8 The Shares of the Recipient Participant so transferred shall be sold by
the transferor as beneficial owner with effect from the date of such
transfer free from any lien, charge or encumbrance with all rights and
restrictions attaching thereto. If the Proposing Participant elects to
purchase the Shares of the Recipient Participant, the Shares of the
Recipient Participant shall be sold by the Recipient Participant as
beneficial owner for a price equal to [*] of the Purchase Price with
effect from the date specified by the Proposing Participant in its notice
of election free from any lien, charge or encumbrance together with all
rights attaching thereto.
20.9 If the Proposing Participant exercises the Buyout Option, both parties
will negotiate in good faith to agree to additional reasonable provisions
and/or amendments to the License Agreements to protect the intellectual
property rights of the Recipient Party.
20.10 If either Participant commits a Relevant Event, the other Shareholder
shall have in addition to all other legal and equitable rights and
remedies hereunder, the right to terminate this Agreement upon 30 days'
written notice.
20.11 In the event of a termination of the Elan License Agreement and/or the
RPI License Agreement, both parties will negotiate in good faith to
determine whether this Agreement should be terminated and if so, which
provisions should survive termination.
20.12 The provisions of Clauses 1, 3, 5.1, 9, 10, 11, 12, 17, 20.12, 22, 23,
and 24 shall survive the termination of this Agreement under this Clause
20.10 or by mutual consent pursuant to Clause 20.1 in accordance with
their terms; all other terms and provisions of this Agreement shall cease
to have effect and be null and void upon the termination of this
Agreement under this Clause 20.10 or by mutual consent pursuant to Clause
20.1.
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CLAUSE 21
SHARE RIGHTS
21.1 The Shareholders agree that the Common Shares and the Preferred Shares
shall be separate classes of shares and shall carry the respective rights
and be subject to the restrictions on the transfer and distribution of
assets provided in the Newco Memorandum of Association and Bye-laws and
as set forth in this Agreement.
21.2 Except as otherwise provided in the Bermuda Companies Act of 1981 and in
the Newco Memorandum of Association and Bye-Laws, the Participants agree
that for a period of two years from the Closing, the Preferred Shares
issued to EIS shall not carry voting rights in Newco.
CLAUSE 22
CONFIDENTIALITY
22.1 The Parties acknowledge and agree that it may be necessary, from time to
time, to disclose to each other confidential and/or proprietary
information, including without limitation, inventions, works of
authorship, trade secrets, specifications, designs, data, know-how and
other information, relating to the Field, the Products, present or future
products, the Newco Intellectual Property, the Elan Intellectual Property
or the RPI Intellectual Property, as the case may be, methods, compounds,
research projects, work in process, services, sales suppliers, customers,
employees and/or business of the disclosing Party, whether in oral,
written, graphic or electronic form (collectively "Confidential
Information").
22.2 Any Confidential Information revealed by a Party to another Party shall
be maintained as confidential and shall be used by the receiving Party
exclusively for the purposes of fulfilling the receiving Party's rights
and obligations under this Agreement and the License Agreements, and for
no other purpose. Confidential Information shall not include:
22.2.1 information that is generally available to the public;
22.2.2 information that is made public by the disclosing Party;
22.2.3 information that is independently developed by the receiving
Party, as evidenced by such Party's records, without the aid,
application or use of the disclosing Party's Confidential
Information;
22.2.4 information that is published or otherwise becomes part of the
public domain without any disclosure by the receiving Party, or on
the part of the receiving Party's directors, officers, agents,
representatives or employees;
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22.2.5 information that becomes available to the receiving Party on a non-
confidential basis, whether directly or indirectly, from a source
other than the disclosing Party, which source did not acquire this
information on a confidential basis; or
22.2.6 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body or any
political subdivision thereof or as otherwise required by law,
rule or regulation; or
(ii) other requirement of law;
provided, however, that if the receiving Party becomes legally
required to disclose any Confidential Information, the
receiving Party shall give the disclosing Party prompt notice
of such fact so that the disclosing Party may obtain a
protective order or confidential treatment or other appropriate
remedy concerning any such disclosure. The receiving Party
shall fully co-operate with the disclosing Party in connection
with the disclosing Party's efforts to obtain any such order or
other remedy. If any such order or other remedy does not fully
preclude disclosure, the receiving Party shall make such
disclosure only to the extent that such disclosure is legally
required; or
22.2.7 information which was already in the possession of the receiving
Party at the time of receiving such information, as evidenced by its
records, provided such information was not previously provided to
the receiving party from a source which was under an obligation to
keep such information confidential; or
22.2.8 information that is the subject of a written permission to disclose,
without restriction or limitation, by the disclosing Party.
22.3 Each Party agrees to disclose Confidential Information of another Party
only to those employees, representatives and agents requiring knowledge
thereof in connection with their duties directly related to the fulfilling
of the Party's obligations under this Agreement, so long as such persons
are under an obligation of confidentiality no less stringent than as set
forth herein. Each Party further agrees to inform all such employees,
representatives and agents of the terms and provisions of this Agreement
and their duties hereunder and to obtain their consent hereto as a
condition of receiving Confidential Information. Each Party agrees that it
will exercise the same degree of care and protection to preserve the
proprietary and confidential nature of the Confidential Information
disclosed by a Party, as the receiving Party would exercise to preserve its
own Confidential Information. Each Party agrees that it will, upon request
of another Party, return all documents and any copies thereof containing
Confidential Information belonging to or disclosed by such other Party.
Each Party shall promptly notify the other Parties upon discovery of any
unauthorized use or disclosure of the other Parties' Confidential
Information.
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22.4 Notwithstanding the above, each Party may use or disclose Confidential
Information disclosed to it by another Party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with patent
applications, prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise submitting information to
tax or other governmental authorities, conducting clinical trials, or
granting a permitted sub-license or otherwise exercising its rights
hereunder; provided, that if a Party is required to make any such
disclosure of the other Party's Confidential Information, other than
pursuant to a confidentiality agreement, such Party shall inform the third
party recipient of the terms and provisions of this Agreement and their
duties hereunder and shall obtain their consent hereto as a condition of
releasing to the third party recipient the Confidential Information.
22.5 Any breach of this Clause 22 by any employee, representative or agent of a
Party is considered a breach by the Party itself.
22.6 The provisions relating to confidentiality in this Clause 22 shall remain
in effect during the Term and for a period of seven years following the
termination of this Agreement.
22.7 The Parties agree that the obligations of this Clause 22 are necessary and
reasonable in order to protect the Parties' respective businesses, and each
Party expressly agrees that monetary damages would be inadequate to
compensate a Party for any breach by the other Party of its covenants and
agreements set forth herein. Accordingly, the Parties agree and
acknowledge that any such violation or threatened violation will cause
irreparable injury to a Party and that, in addition to any other remedies
that may be available, in law or in equity or otherwise, any Party shall be
entitled to obtain injunctive relief against the threatened breach of the
provisions of this Clause 22, or a continuation of any such breach by the
other Party, specific performance and other equitable relief to redress
such breach together with its damages and reasonable counsel fees and
expenses to enforce its rights hereunder, without the necessity of proving
actual or express damages.
CLAUSE 23
COSTS
23.1 Each Shareholder shall bear its own legal and other costs incurred in
relation to preparing and concluding this Agreement and the Substantive
Documents.
23.2 All other costs, legal fees, registration fees and other expenses relating
to the transactions contemplated hereby, including the costs and expenses
incurred in relation to the incorporation of Newco, shall be borne by
Newco.
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CLAUSE 24
GENERAL
24.1 Good Faith:
----------
Each of the Parties hereto undertakes with the others to do all things
reasonably within its power that are necessary or desirable to give effect
to the spirit and intent of this Agreement.
24.2 Further Assurance:
-----------------
At the request of any of the Parties, the other Party or Parties shall (and
shall use reasonable efforts to procure that any other necessary parties
shall) execute and perform all such documents, acts and things as may
reasonably be required subsequent to the signing of this Agreement for
assuring to or vesting in the requesting Party the full benefit of the
terms hereof.
24.3 No Representation:
-----------------
Each of the Parties hereto hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty except as
expressly set forth herein or in any document referred to herein.
24.4 Force Majeure:
-------------
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay is caused by
or results from causes beyond its reasonable control, including without
limitation, acts of God, fires, strikes, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts
or other labor disturbances or intervention of any relevant government
authority, but any such delay or failure shall be remedied by such Party as
soon as practicable.
24.5 Relationship of the Parties:
---------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute Elan/EIS and RPI as partners, or Elan/EIS as an employee or
agent of RPI, or RPI as an employee or agent of Elan/EIS.
No Party hereto shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of another
Party or to bind another Party to any contract, agreement or undertaking
with any third party.
41
<PAGE>
24.6 Counterparts:
------------
This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which when
taken together shall constitute this Agreement.
24.7 Notices:
-------
Any notice to be given under this Agreement shall be sent in writing by
registered or recorded delivery post or reputable overnight courier such as
Federal Express or telecopied to:
Elan/EIS at:
Elan Corporation, plc
C/o Elan International Services, Ltd.
102 St. James Court
Flatts, Smiths FL04
Bermuda
Attention: President
Telephone: 441-292-9169
Fax: 441-292-2224
and
Elan International Services, Ltd.
102 St. James Court
Flatts, Smiths FL04
Bermuda
Attention: President
Telephone: 441-292-9169
Fax: 441-292-2224
RPI at:
Ribozyme Pharmaceuticals Incorporated
2950 Wilderness Place
Boulder, Colorado 80301
Attention: Chief Executive Officer
Telephone 303-449-6500
Fax: 303-449-6995
with a copy to:
Rothgerber Johnson & Lyons LLP
One Tabor Center, Suite 3000
42
<PAGE>
1200 Seventeenth Street
Denver, Colorado 80202
Attention: Woody Davis, Esq.
Telephone 303-623-9000
Fax: 303-623-9222
Newco at:
Medizyme Pharmaceuticals Ltd.
102 St. James Court
Clarendon House
Church St.
Hamilton, Bermuda
Attention: Secretary
Telephone: 441-295-1422
Fax: 441-292-4720
or to such other address(es) as may from time to time be notified by
any Party to the others hereunder.
Any notice sent by mail shall be deemed to have been delivered within
three Business Days after dispatch or delivery to the relevant courier
and any notice sent by telecopy shall be deemed to have been delivered
upon confirmation of receipt. Notices of change of address shall be
effective upon receipt. Notices by telecopy shall also be sent by
another method permitted hereunder.
24.8 Governing Law; Arbitration
--------------------------
24.8.1. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the
provisions thereof relating to the conflict of laws.
24.8.2. The Parties will attempt in good faith to resolve any dispute arising
out of or relating to this Agreement promptly by negotiation between
executives of the Parties. In the event that such negotiations do not
result in a mutually acceptable resolution, the Parties agree to
consider other dispute resolution mechanisms including mediation.
24.8.3 Any dispute under this Agreement which is not settled by mutual
consent under Clause 24.8.2 and which relates to (i) the
interpretation or enforcement of any provision of this Agreement or
the License Agreements, (ii) the interpretation or application of law,
or (iii) the ownership of any intellectual property, shall be finally
settled by binding arbitration, conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
by one arbitrator appointed in accordance with said rules. Such
43
<PAGE>
arbitrator shall be reasonably satisfactory to each of the Parties;
provided, that if the Parties are unable to agree upon the identity of
such arbitrator within 15 days of demand by either Party, then either
Party shall have the right to request the AAA to appoint the
arbitrator. Such arbitrator shall be an independent expert in
pharmaceutical product development and marketing (including clinical
development and regulatory affairs).
The arbitration shall be held in New York, New York.
The arbitrator shall determine what discovery will be permitted,
consistent with the goal of limiting the cost and time which the
Parties must expend for discovery; provided the arbitrator shall
permit such discovery as they deem necessary to permit an equitable
resolution of the dispute.
Any written evidence originally in a language other than English shall
be submitted in English translation accompanied by the original or a
true copy thereof.
The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the Parties and each
Party shall bear its own costs and attorneys' and witness' fees
incurred in connection with the arbitration.
In rendering judgment, the arbitrators may not provide for punitive or
similar exemplary damages.
A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within 30 days
following the final decision of the arbitrators or such other
reasonable period as the arbitrators determine in a written opinion.
Any arbitration under this Agreement shall be completed within one
year from the filing of notice of a request for such arbitration.
The arbitration proceedings and the decision shall not be made public
without the joint consent of the Parties and each Party shall maintain
the confidentiality of such proceedings and decision unless otherwise
permitted by the other Party.
The Parties agree that the decision shall be the sole, exclusive and
binding remedy between them regarding any and all disputes,
controversies, claims and counterclaims presented to the arbitrators.
Application may be made to any court having jurisdiction over the
Party (or its assets) against whom the decision is rendered for a
judicial recognition of the decision and an order of enforcement.
24.9 Severability:
------------
44
<PAGE>
If any provision in this Agreement is agreed by the Parties to be,
deemed to be or becomes invalid, illegal, void or unenforceable under
any law that is applicable hereto, such provision will be deemed
amended to conform to applicable laws so as to be valid and
enforceable or, if it cannot be so amended without materially altering
the intention of the Parties, it will be deleted, with effect from the
date of such agreement or such earlier date as the Parties may agree,
and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in any
way.
24.10 Amendments:
----------
No amendment, modification or addition hereto shall be effective or
binding on any Party unless set forth in writing and executed by a
duly authorized representative of all Parties.
24.11 Waiver:
------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged
with such waiver, and no waiver of any breach or failure to perform
shall be deemed to be a waiver of any future breach or failure to
perform or of any other right arising under this Agreement.
24.12 Assignment:
----------
None of the Parties shall be permitted to assign its rights or
obligations hereunder without the prior written consent of the other
Parties except as follows:
24.12.1 Elan, EIS and/or RPI shall have the right to assign their
rights and obligations hereunder to their Affiliates
provided, however, that such assignment does not result in
adverse tax consequences for any other Parties.
24.12.2 Elan and EIS shall have the right to assign their rights and
obligations hereunder to a special purpose financing or
similar entity established by Elan or EIS.
24.13 Whole Agreement/No Effect on Other Agreements:
---------------------------------------------
This Agreement (including the Schedules attached hereto) and the
Substantive Documents set forth all of the agreements and
understandings between the Parties with respect to the subject matter
hereof, and supersedes and terminates all prior agreements and
understandings between the Parties with respect to the subject matter
hereof. There are no agreements or understandings with respect to the
subject matter hereof, either oral or written, between the Parties
other than as set forth in this Agreement and the Substantive
Documents.
In the event of any ambiguity or conflict arising between the terms of
this Agreement and those of the Newco Memorandum of Association and
Bye-Laws, the terms of this Agreement shall prevail.
45
<PAGE>
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between any of the Parties unless specifically referred to, and solely
to the extent provided herein. In the event of a conflict between the
provisions of this Agreement and the provisions of the License
Agreements, the terms of this Agreement shall prevail unless this
Agreement specifically provide otherwise.
24.14 Successors:
----------
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
46
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized
representatives to execute this Agreement on the day first set forth above.
SIGNED
BY:_______________________
for and on behalf of
ELAN CORPORATION, PLC
in the presence of:__________________
SIGNED
BY:_______________________
for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
in the presence of:__________________
SIGNED
BY:_______________________
for and on behalf of
ELAN PHARMA INTERNATIONAL LIMITED
in the presence of:__________________
47
<PAGE>
SIGNED
BY:_______________________
for and on behalf of
RIBOZYME PHARMACEUTICALS, INC.
in the presence of:__________________
SIGNED
BY:_______________________
for and on behalf of
MEDIZYME PHARMACEUTICALS LTD
in the presence of:__________________
48
<PAGE>
SCHEDULE 1
ELAN LICENSE AGREEMENT
49
<PAGE>
SCHEDULE 2
RPI LICENSE AGREEMENT
50
<PAGE>
EXHIBIT 8
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.25B-2B OF THE SECURITIES EXCHANGE ACT OF 1934. [*] INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST AND IS FILED
SEPARATELY WITH THE COMMISSION.
Execution Copy 2A
LICENSE AGREEMENT
BETWEEN
RIBOZYME PHARMACEUTICALS, INC.
AND
MEDIZYME PHARMACEUTICALS LTD.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS......................................................... 1
2. RPI LICENSE TO NEWCO................................................ 6
3. INTELLECTUAL PROPERTY............................................... 8
4. NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY........................... 8
5. FINANCIAL PROVISIONS................................................ 9
6. RIGHT OF INSPECTION AND AUDIT....................................... 10
7. REPRESENTATIONS AND WARRANTIES...................................... 11
8. TERM AND TERMINATION................................................ 13
9. CONFIDENTIAL INFORMATION............................................ 16
10. GOVERNING LAW AND JURISDICTION; ARBITRATION......................... 17
11. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE........................ 19
12. ASSIGNMENT.......................................................... 19
13. NOTICES............................................................. 19
14. MISCELLANEOUS....................................................... 21
</TABLE>
<PAGE>
THIS AGREEMENT made this ___ day of January 2000
between:
(1) Ribozyme Pharmaceuticals, Inc., a Delaware corporation having its principal
place of business at 2950 Wilderness Place, Boulder, Colorado 80301.
(2) Medizyme Pharmaceuticals Ltd., a Bermuda exempted limited liability company
incorporated under the laws of Bermuda and having its registered office at
Clarendon House, Church St., Hamilton, Bermuda.
RECITALS:
---------
A. Simultaneously herewith, RPI, Elan, EIS, and Newco (capitalized terms used
herein are defined below) are entering into the JDOA for the purpose of
recording the terms and conditions of the joint venture and of regulating
their relationship with each other and certain aspects of the affairs of,
and their dealings with Newco.
B. Newco desires to enter into this Agreement with RPI so as to permit Newco
to utilize the RPI Intellectual Property in making, having made, importing,
using, offering for sale and selling the Products in the Field in the
Territory.
C. Simultaneously herewith Newco and Elan are entering into the Elan License
Agreement relating to Newco's use of the Elan Intellectual Property.
Now, Therefore, the Parties agree as follows:
1. DEFINITIONS
1.1. In this Agreement unless the context otherwise requires:
"Affiliate" shall mean any corporation or entity controlling, controlled or
under the common control of Elan or RPI, as the case may be. For the
purpose of this definition, "control" shall mean direct or indirect
ownership of fifty percent (50%) or more of the stock or shares entitled to
vote for the election of directors. For purposes of this Agreement, Newco
is not an Affiliate of Elan or EIS.
"Agreement" shall mean this license agreement (which expression shall be
deemed to include the Recitals and Schedules hereto).
Angiozyme(TM) shall mean a Ribozyme targeted against vascular endothelial
growth factor receptor (VEGF-R).
"Business Plan" shall have the meaning, as such term is defined in the
JDOA.
<PAGE>
"Confidential Information" shall have the meaning, as such term is defined
in Clause 9.
"Definitive Documents" shall mean the definitive agreements relating to the
transactions including finance, stock purchase, research and license
agreements.
"EIS" shall mean Elan International Services, Limited, a Bermuda exempted
limited liability company incorporated under the laws of Bermuda and having
its registered office at St James Court, Flatts, Smiths, FL04 Bermuda.
"Elan" shall mean Elan, plc and EPIL, and their respective successors and
permitted assigns.
"Elan, plc" shall mean Elan Corporation, plc, a public limited company
incorporated under the laws of Ireland acting through its division Elan
Pharmaceutical Technologies.
"Effective Date" shall mean the date of this Agreement.
"Elan Improvements" shall have the meaning as such term is defined in the
Elan License Agreement.
"Elan Intellectual Property" shall have the meaning as such term is defined
in the Elan License Agreement.
"Elan Know-How" shall have the meaning as such term is defined in the Elan
License Agreement.
"Elan License" shall have the meaning set forth in Clause 2.1 of the Elan
License Agreement.
"Elan Patents" shall have the meaning as such term is defined in the Elan
License Agreement.
"Elan Research License" shall have the meaning as such term is defined in
the Elan License Agreement.
"EPIL" shall mean Elan Pharma International Limited a private limited
company incorporated under the laws of Ireland.
"Existing RPI License Agreements" shall mean the following agreements: (a)
License Agreement, dated September 1993, between RPI and Competitive
Technologies Inc., as amended; (b) License Agreement, dated January 15,
1993, between RPI and Massachusetts Institute of Technology; (c) License
Agreement, dated February 7, 1992, between RPI and Garching Instruments
GmbH, as amended;
<PAGE>
and (d) License Agreement, dated November 11, 1994, between Ribonetics GmbH
and European Molecular Biological Laboratory, as assigned to RPI.
"Field" shall mean the [ * ] of the Target Ribozyme using the System
for the down regulation of HER-2.
"Financial Year" shall mean each year commencing on 1 January (or in the
case of the first Financial Year, the Effective Date) and expiring on 31
December of each year.
"HER-2" shall mean Human Epidermal Growth Factor Receptor Type 2.
"In Market" shall mean the sale of the Product in the Territory by Newco or
its Affiliates, or where applicable by a permitted sub-licensee, to an
unaffiliated third party, such as (i) the end-user consumer of the Product
(ii) a wholesaler, managed care organization, hospital or pharmacy or other
third party who effects the final commercial sale to the end-user consumer
of the Product, and shall exclude the transfer pricing of the Product(s) by
Newco to an Affiliate or a sub-licensee.
"JDOA" shall mean that certain Joint Development and Operating Agreement,
of even date herewith, by and between Elan, RPI, EIS and Newco.
"Licensed Technologies" shall mean the Elan Intellectual Property and the
RPI Intellectual Property.
"Licenses" shall mean the Elan License, the Elan Research License and the
RPI License.
"Management Committee" shall have the meaning, as such term is defined in
the JDOA.
"Net Sales" shall mean that sum determined by deducting the following
deductions from the aggregate gross In Market sales proceeds billed for the
Products by Newco or its Affiliate or a permitted sub-licensee, as the case
may be:
(i) transportation charges or allowances, if any, included in such
price;
(ii) trade, quantity or cash discounts, broker's or agent's commissions,
if any, allowed or paid;
(iii) credits or allowances, if any, given or made on account of price
adjustments, returns, promotional discounts, rebates and any and all
federal, state or local government rebates whether in existence now
or enacted at any time during the term of the Licenses; and
(iv) any tax, excise or governmental charge upon or measured by the sale,
<PAGE>
transportation, delivery or use of the Products.
"Newco" shall mean Medizyme Pharmaceuticals Ltd., Bermuda exempted limited
liability company incorporated under the laws of Bermuda.
"Newco Intellectual Property" shall mean the Newco Patents and the Newco
Know- How.
"Newco Know-How" shall mean any and all rights owned, licensed or
controlled by Newco to any scientific, pharmaceutical or technical
information, data, discovery, invention (whether patentable or not),
technique, process, procedure, system, formulation or design that is not
generally known to the public arising out of the conduct of the Project by
any person that does not constitute Elan Improvements or RPI Improvements.
"Newco Patents" shall mean any and all patents and patent applications
arising out of the conduct of the Project by any person that does not
constitute Elan Improvements or RPI Improvements and all rights therein,
and including all extensions, continuations, continuations-in-part,
divisionals, patents-of-additions, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts thereto
owned or licensed to Newco.
"Oligonucleotide" shall mean a [ * ] non-protein, non-peptide encoding
nucleic acid molecule including those with [ * ] used as a human
therapeutic and/or prophylactic compound comprising between [ * ] including
oligonucleotide analogs which may include natural or non-natural
heterocycles, sugars and/or backbone linkage modifications, capable of
specifically inhibiting the function, activity or expression of a gene. For
the purposes hereof Oligonucleotide (a) shall include [ * ], and (b) shall
exclude polymers in which the linkages are [ ]
"Party" shall mean RPI or Newco, as the case may be, and "Parties" shall
mean RPI and Newco.
"Product(s)" shall mean the pharmaceutical formulation incorporating the
Target Ribozyme and incorporated within or packaged with the System.
"Project" shall mean all activities as undertaken by Elan, RPI and Newco in
order to develop the Products.
"R&D Committee" shall have the meaning, as such term is defined in the
JDOA.
"R&D Plan" shall have the meaning, as such term is defined in the JDOA.
"R&D Program" shall mean any research and development program commenced by
<PAGE>
Newco pursuant to the Project.
"Ribozyme" shall mean an [ * ] which is directed to inhibit, by catalytic
cleavage, the translation of mRNA coding for a gene. For the avoidance of
doubt, Ribozyme does not include [ * ]
"RPI" shall mean Ribozyme Pharmaceuticals, Inc., a Delaware corporation and
its Affiliates, excluding Newco.
"RPI Improvements" shall mean improvements to the RPI Patents and/or the
RPI Know-How developed (i) by RPI whether or not pursuant to the Project,
(ii) by Newco or Elan or by a third party (under contract with Newco)
pursuant to the Project, and/or (iii) jointly by any combination of RPI,
Elan or Newco pursuant to the Project, except as limited by agreements with
third parties.
Subject to third party agreements, RPI Improvements shall constitute part
of RPI Intellectual Property and be included in the license of the RPI
Intellectual Property pursuant to Clause 2.1 solely for the purposes set
forth therein. If the inclusion of a RPI Improvement in the license of RPI
Intellectual Property is restricted or limited by a third party agreement,
RPI shall use reasonable commercial efforts to minimize any such
restriction or limitation.
"RPI Intellectual Property" shall mean the RPI Know-How, the RPI Patents
and the RPI Improvements.
"RPI Know-How" shall mean any and all rights owned, licensed or controlled
by RPI to any scientific, pharmaceutical or technical information, data,
discovery, invention (whether patentable or not), technique, process,
procedure, system, formulation or design relating to the Ribozyme that is
not generally known to the public.
"RPI License" shall have the meaning set forth in Clause 2.1.
"RPI Patents" shall mean any and all patents and patent applications as set
forth in Schedule 1, and all rights therein, and including all extensions,
continuations, continuations-in-part, divisionals, patents-of-additions,
re-examinations, re-issues, supplementary protection certificates and
foreign counterparts thereto owned by or licensed to RPI containing claims
relating to the Ribozyme.
"RPI Third Party Agreements" shall mean all agreements existing as of the
date hereof between RPI and third parties, including Affiliates, that
relate to or affect the Licenses, the Product, the Ribozyme for use in the
Field, and/or the transactions contemplated hereunder, including, without
limitation, the Existing RPI License Agreements.
"Strategic Investor" shall mean a company, corporation or person investing
in RPI
<PAGE>
or Newco for strategic purposes as evidenced by, inter alia, and shall
exclude financial institutions but not any of their direct or indirect
assignees or transferees that are not financial institutions.
"Substitute Ribozyme" shall have the meaning set forth in Clause 2.2 of the
JDOA.
"Substitute Target" shall have the meaning set forth in Clause 2.2 of the
JDOA.
"System" shall mean an ambulatory drug delivery system for direct
attachment to the body of a patient having a flexible diaphragm drug
reservoir, which is capable of delivering factory pre-programmed continuous
amounts of drug upon activation as disclosed and described in the Elan
Patents set forth in Schedule 1 of the Elan License Agreement.
"Target Ribozyme" shall mean a Ribozyme directed to HER-2 unless and until
a [ * ] directed to a [ * ] is designated to be the subject of the Project
pursuant to the designation of a [ * ] and [ * ] under the provisions of
Clause 2.2 of the JDOA, in which case the term [ * ] shall mean such
designated [ * ] directed to [ * ]
"Technological Competitor of Elan" shall mean a company, corporation or
person listed in Schedule 2 and successors thereof or any additional broad-
based technological competitor of Elan added to such Schedule from time to
time upon mutual agreement of the Parties.
"Term" shall have the meaning set forth in Clause 8.
"Territory" shall mean all the countries of the world.
"United States Dollar" and "US$" shall mean the lawful currency for the
time being of the United States of America.
1.2. In this Agreement:
1.2.1 The singular includes the plural and vice versa, and the masculine
includes the feminine and vice versa and the neuter includes the
masculine and the feminine.
1.2.2 Any reference to a Clause or Schedule shall, unless otherwise
specifically provided, be to a Clause or Schedule of this Agreement.
1.2.3 The headings of this Agreement are for ease of reference only and
shall not affect its construction or interpretation.
2. RPI LICENSE TO NEWCO
<PAGE>
2.1. RPI hereby grants to Newco for the Term an exclusive license (including the
limited right to grant sublicenses under Clause 2.6 below) (the "RPI
License") to the RPI Intellectual Property to make, have made, import, use,
offer for sale and sell the Products in the Field in the Territory, subject
to any contractual obligations that RPI has as of the Effective Date.
2.2 RPI hereby confirms that no obligations are in effect on the date hereof
between RPI and an unaffiliated third party relating to the Ribozyme for
use in the Field, other than the Existing RPI License Agreements.
RPI shall be responsible for payments related to the financial provisions
and obligations under the RPI Third Party Agreements (including amendments
thereto), including, without limitation, any royalty or other compensation
obligations. RPI shall satisfy its responsibility to make such payments by
offsetting against such payments the royalties that are otherwise due to
RPI by Newco pursuant to Clause 5 below.
For the avoidance of doubt, royalties, milestones or other payments which
arise from the process of the commercialization or exploitation of products
under the RPI Third Party Agreements (for example, a milestone payment
payable upon successful completion of Phase II clinical trials, the filing
of an NDA application, obtaining NDA approval, or first commercial sale)
shall be payments for which RPI will be responsible under this Clause 2.2.
2.3 To the extent royalty or other compensation obligations that are payable to
third parties with respect to the RPI Intellectual Property would be
triggered after the Effective Date, under any third party agreement entered
into by RPI after the Effective Date (the "RPI Post-Effective Date
Agreements"), by a proposed use of such RPI Intellectual Property in
connection with the Project, RPI will inform Newco of such royalty or
compensation obligations. If Newco agrees to utilize such RPI Intellectual
Property in connection with the Project, Newco will be responsible for the
payment of such royalty or other compensation obligations relating thereto.
For the avoidance of doubt, royalties, milestones or other payments which
arise from the process of the commercialization or exploitation of products
under the RPI Post-Effective Date Agreements (for example, a milestone
payment payable upon successful completion of Phase II clinical trials, the
filing of an NDA application, obtaining NDA approval, or first commercial
sale) shall be payments for which Newco will be responsible under this
Clause 2.3.
2.4 Elan shall be a third party beneficiary under this Agreement and shall have
the right to cause Newco to enforce Newco's rights under this Agreement
against RPI.
2.5 Notwithstanding anything contained in this Agreement to the contrary, RPI
shall have the right outside the Field and subject to the non-competition
provisions of Clause 4
<PAGE>
to exploit and grant licenses and sublicenses of the RPI Intellectual
Property.
For the avoidance of doubt, Newco shall have no right to use the RPI
Intellectual Property outside the Field.
2.6 Newco shall not assign any of its rights under the RPI License relating to
the RPI Intellectual Property without the prior written consent of Elan and
RPI.
Newco shall not sublicense any of its rights under the RPI License relating
to the RPI Intellectual Property without the prior written consent of Elan
and RPI, which consent shall not be unreasonably withheld or delayed;
provided, however, that the consent of Elan may be withheld in Elan's sole
discretion in the case of a proposed sublicense of such rights to a
Technological Competitor of Elan.
2.7 Any agreement between Newco and any permitted third party for the
development or exploitation of the RPI Intellectual Property shall require
such third party to maintain the confidentiality of all information
concerning the RPI Intellectual Property.
Insofar as the obligations owed by Newco to RPI are concerned, Newco shall
remain responsible for all acts and omissions of any permitted sub-
licensee, including Elan, as if they were acts and omissions by Newco.
3. INTELLECTUAL PROPERTY
3.1 Ownership of Intellectual Property:
-----------------------------------
3.1.1 Newco shall own the Newco Intellectual Property.
3.1.2 RPI shall own the RPI Intellectual Property.
4. NON-COMPETITION/AFTER ACQUIRED TECHNOLOGY
4.1 Subject to Clause 4.3, during the Term, RPI, alone or in conjunction with a
third party, shall not develop or commercialize [ * ] to inhibit the
translation of [ * ]
4.2 If after the Effective Date RPI acquires know-how or patent rights from a
third party relating to the System, or if RPI acquires or merges with a
third party entity that owns or has license rights to know-how or patent
rights relating to the System, then RPI shall offer to license such know-
how and patent rights to Newco (subject to existing contractual
obligations) solely for Newco to research, develop and otherwise engage in
the commercialization of the Product solely for use in the Field on such
terms as would be offered to an independent third party negotiating in good
faith on an arms-length basis.
<PAGE>
4.3 If Newco determines that Newco should not acquire such license as is
referred to in Clause 4.2, then RPI shall be free to fully exploit such
know-how and patent rights, with the Elan Intellectual Property licensed to
Newco, whether inside or outside the Field and to grant to third parties
licenses and sublicenses with respect thereto.
5. FINANCIAL PROVISIONS
5.1 Royalties:
----------
The intent of the Parties is to provide for equivalent economic benefit to
each of RPI and Elan, except in respect of the License Fee (as defined in
the Elan License Agreement). Accordingly, the Management Committee shall
decide by unanimous consent on the royalties which shall be payable by
Newco to RPI and Elan on Net Sales. When determining such royalties, the
Management Committee shall consider the royalty obligations of RPI under
the Existing RPI License Agreements, provided that any royalties payable by
Newco to RPI and Elan hereunder shall be distributed in equal amount to
each of RPI and Elan. RPI represents and warrants to Newco and Elan that
RPI's royalty obligations under the Existing RPI License Agreements do not
exceed an aggregate of [ * ]
5.2 Payment of royalties pursuant to Clause 5.1 shall be made quarterly in
arrears during each Financial Year within 30 days after the expiry of the
calendar quarter. The method of payment shall be by wire transfer to an
account specified by RPI. Each payment made to RPI shall be accompanied by
a true accounting of all Products sold by Newco's permitted sublicensees,
if any, during such quarter.
Such accounting shall show, on a country-by-country and Product-by-Product
basis, Net Sales (and the calculation thereof) and each calculation of
royalties with respect thereto, including the calculation of all
adjustments and currency conversions.
5.3 Newco shall maintain and keep clear, detailed, complete, accurate and
separate records for a period of 3 years:
5.3.1 to enable any royalties on Net Sales that shall have accrued
hereunder to be determined; and
5.3.2 to enable any deductions made in the Net Sales calculation to be
determined.
5.4 All payments due hereunder shall be made in United States Dollars. Payments
due on Net Sales of any Product for each calendar quarter made in a
currency other than United States Dollars shall first be calculated in the
foreign currency and then converted to United States Dollars on the basis
of the exchange rate in effect on the last working day for such quarter for
the purchase of United States Dollars with such
<PAGE>
foreign currency quoted in the Wall Street Journal (or comparable
publication if not quoted in the Wall Street Journal) with respect to the
currency of the country of origin of such payment, determined by averaging
the rates so quoted on each business day of such quarter.
5.5 If, at any time, legal restrictions in the Territory prevent the prompt
payment when due of royalties or any portion thereof, the Parties shall
meet to discuss suitable and reasonable alternative methods of paying RPI
the amount of such royalties. In the event that Newco is prevented from
making any payment under this Agreement by virtue of the statutes, laws,
codes or government regulations of the country from which the payment is to
be made, then such payments may be paid by depositing them in the currency
in which they accrue to RPI's account in a bank acceptable to RPI in the
country the currency of which is involved or as otherwise agreed by the
Parties.
5.6 RPI and Newco agree to co-operate in all respects necessary to take
advantage of any double taxation agreements or similar agreements as may,
from time to time, be available.
5.7 Any taxes payable by RPI on any payment made to RPI pursuant to this
Agreement shall be for the account of RPI. If so required by applicable
law, any payment made pursuant to this Agreement shall be made by Newco
after deduction of the appropriate withholding tax, in which event the
Parties shall co-operate to obtain the appropriate tax clearance as soon as
is practicable. On receipt of such clearance, Newco shall forthwith arrange
payment to RPI of the amount so withheld.
6. RIGHT OF INSPECTION AND AUDIT
6.1 Once during each Financial Year, or more often not to exceed quarterly as
reasonably requested by RPI, Newco shall permit RPI or its duly authorized
representatives, upon reasonable notice and at any reasonable time during
normal business hours, to have access to inspect and audit the accounts and
records of Newco and any other book, record, voucher, receipt or invoice
relating to the calculation of the royalty payments on Net Sales submitted
to RPI.
Any such inspection of Newco's records shall be at the expense of RPI,
except that if any such inspection reveals a deficiency in the amount of
the royalty actually paid to RPI hereunder in any Financial Year quarter of
5% or more of the amount of any royalty actually due to RPI hereunder, then
the expense of such inspection shall be borne solely by Newco. Any amount
of deficiency shall be paid promptly to RPI by Newco.
If such inspection reveals a surplus in the amount of royalties actually
paid to RPI by Newco, RPI shall reimburse Newco the surplus within 15 days
after determination.
<PAGE>
6.2 In the event of any unresolved dispute regarding any alleged deficiency or
overpayment of royalty payments hereunder, the matter will be referred to
an independent firm of chartered accountants chosen by agreement of RPI and
Elan for a resolution of such dispute. Any decision by the said firm of
chartered accountants shall be binding on the Parties.
7. REPRESENTATIONS AND WARRANTIES
7.1 RPI represents and warrants to Newco and Elan as follows:
7.1.1 RPI has the right to grant the RPI License;
7.1.2 there are no agreements between RPI and any third party that
conflict with the RPI License;
7.1.3 the patents and patent applications included in the RPI Patents are
free and clear of encumbrances and liens;
7.1.4 to the best of RPI's knowledge, there are no proceedings or
threatened proceedings against RPI in connection with the RPI
Intellectual Property in relation to the Field; and
7.1.5 the RPI Intellectual Property constitutes all intellectual property
owned or licensed by RPI that are reasonably applicable to the
Project as it relates to the Ribozyme.
7.2 RPI shall not amend, modify, waive or terminate any of its rights under any
RPI Third Party Agreement without the prior written consent of the
Management Committee (by the unanimous vote of its members); provided,
however, that such consent will be required only if such amendment,
modification, waiver or termination would have an adverse effect,
individually or in the aggregate, on the financial condition, prospects,
results of operation, business, and/or assets (including, without
limitation, the Licensed Technologies, and/or the Newco Intellectual
Property) of Newco.
7.3. RPI agrees and represents and warrants to Newco and Elan as follows: (i)
the RPI Third Party Agreements are valid and in full force and effect, (ii)
there are no existing or claimed defaults by RPI, and to RPI's knowledge by
any other party, under the RPI Third Party Agreements; and no event, act or
omission has occurred which (with or without notice, lapse of time or the
happening or occurrence of any other event) would result in a default under
the RPI Third Party Agreements by RPI, or to RPI's knowledge by any other
party, and (iii) RPI shall during the term of the Licenses, fully comply
with all terms and conditions of the RPI Third Party Agreements; RPI
<PAGE>
will enforce its rights under the RPI Third Party Agreements; and RPI will
not assign its rights under the RPI Third Party Agreements. RPI will keep
Newco and Elan fully informed with respect to RPI's arrangements under the
RPI Third Party Agreements that relate to Newco and/or the transactions
contemplated hereunder. RPI shall provide Newco and Elan with any written
notices delivered by any party under the RPI Third Party Agreements, which
written notices relate to or could affect Newco and/or the transactions
contemplated hereunder.
7.4 In addition to any other indemnities provided for herein, RPI shall
indemnify and hold harmless Newco and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including reasonable attorney's fees and
expenses) incurred or sustained by Newco arising out of or in connection
with any:
7.4.1 breach of any representation, covenant, warranty or obligation by
RPI hereunder; or
7.4.2 act or omission on the part of RPI or any of its respective
employees, agents, officers and directors in the performance of this
Agreement.
7.5 In addition to any other indemnities provided for herein, Newco shall
indemnify and hold harmless RPI and its Affiliates and their respective
employees, agents, officers and directors from and against any claims,
losses, liabilities or damages (including reasonable attorney's fees and
expenses) incurred or sustained by RPI arising out of or in connection with
any:
7.5.1 breach of any representation, covenant, warranty or obligation by
Newco hereunder; or
7.5.2 act or omission on the part of Newco or any of its agents or
employees in the performance of this Agreement.
7.6 The Party seeking an indemnity shall:
7.6.1 fully and promptly notify the other Party of any claim or
proceeding, or threatened claim or proceeding;
7.6.2 permit the indemnifying Party to take full care and control of such
claim or proceeding;
7.6.3 co-operate in the investigation and defense of such claim or
proceeding;
7.6.4 not compromise or otherwise settle any such claim or proceeding
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld conditioned or delayed; and
<PAGE>
7.6.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
7.7 EXCEPT AS SET FORTH IN THIS CLAUSE 7, RPI IS GRANTING THE LICENSES
HEREUNDER ON AN "AS IS" BASIS WITHOUT REPRESENTATION OR WARRANTY WHETHER
EXPRESS OR IMPLIED INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH
WARRANTIES ARE EXPRESSLY DISCLAIMED.
7.8 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, RPI AND NEWCO
SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION OR
WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE
EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL OR
INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF PROFITS OR
OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE
PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE.
8. TERM AND TERMINATION
8.1 The term of this Agreement shall commence as of the Effective Date and
shall, subject to the rights of termination outlined in this Clause 8,
expire on a Product-by-Product basis and on a country-by-country basis on
the last to occur of:
8.1.1 [ * ] starting from the date of the first commercial sale of the
Product in the country concerned; or
8.1.2 the date of expiration of the last to expire of the patents included
in the Elan Patents and the Elan Improvements and/or the RPI Patents
and the RPI Improvements
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have, in
addition to all other legal and equitable rights and remedies hereunder,
the right to terminate this Agreement upon 30 days' prior written notice to
the defaulting Party.
8.3 For the purpose of this Clause 8, a "Relevant Event" is committed or
suffered by a Party if:
8.3.1 it commits a material breach of its obligations under this Agreement
or the
<PAGE>
7.6.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceeding.
7.7 EXCEPT AS SET FORTH IN THIS CLAUSE 7, RPI IS GRANTING THE LICENSES
HEREUNDER ON AN "AS IS" BASIS WITHOUT REPRESENTATION OR WARRANTY WHETHER
EXPRESS OR IMPLIED INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH
WARRANTIES ARE EXPRESSLY DISCLAIMED.
7.8 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, RPI AND NEWCO
SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION OR
WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE
EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL OR
INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF PROFITS OR
OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE
PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE.
8. TERM AND TERMINATION
8.1 The term of this Agreement shall commence as of the Effective Date and
shall, subject to the rights of termination outlined in this Clause 8,
expire on a Product-by-Product basis and on a country-by-country basis on
the last to occur of:
8.1.1 15 years starting from the date of the first commercial sale of the
Product in the country concerned; or
8.1.2 the date of expiration of the last to expire of the patents included
in the Elan Patents and the Elan Improvements and/or the RPI Patents
and the RPI Improvements
("the Term")
8.2 If either Party commits a Relevant Event, the other Party shall have, in
addition to all other legal and equitable rights and remedies hereunder,
the right to terminate this Agreement upon 30 days' prior written notice to
the defaulting Party.
8.3 For the purpose of this Clause 8, a "Relevant Event" is committed or
suffered by a Party if:
8.3.1 it commits a material breach of its obligations under this Agreement
or the
<PAGE>
JDOA and fails to remedy it within 60 days of being
specifically required in writing to do so by the other Party;
provided, that if the breaching Party has proposed a course of
action to rectify the breach and is acting in good faith to rectify
same but has not cured the breach by the 60th day, such period shall
be extended by such period as is reasonably necessary to permit the
breach to be rectified;
8.3.2 a distress, execution, sequestration or other process is levied or
enforced upon or sued out against a material part of its property
which is not discharged or challenged within 30 days;
8.3.3 it is unable to pay its debts in the normal course of business;
8.3.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or amalgamation,
without the prior written consent of the other Party (such consent
not to be unreasonably withheld);
8.3.5 the appointment of a liquidator, receiver, administrator, examiner,
trustee or similar officer of such Party or over all or
substantially all of its assets under the law of any applicable
jurisdiction, including without limitation, the United States of
America, Bermuda or Ireland;
8.3.6 an application or petition for bankruptcy, corporate re-
organization, composition, administration, examination, arrangement
or any other procedure similar to any of the foregoing under the law
of any applicable jurisdiction, including without limitation, the
United States of America, Bermuda or Ireland, is filed, and is not
discharged within 60 days, or a Party applies for or consents to the
appointment of a receiver, administrator, examiner or similar
officer of it or of all or a material part of its assets, rights or
revenues or the assets and/or the business of a Party are for any
reason seized, confiscated or condemned.
8.4 Upon expiration or termination of the Agreement:
8.4.1. any sums that were due from Newco to RPI on Net Sales in the
Territory or in such particular country or countries in the
Territory (as the case may be) prior to the expiration or
termination of this Agreement as set forth herein shall be paid in
full within 60 days after the expiration or termination of this
Agreement for the Territory or for such particular country or
countries in the Territory (as the case may be);
8.4.2 any provisions that expressly survive termination or expiration of
this Agreement, including without limitation this Clause 8, shall
remain in full force and effect;
<PAGE>
8.4.3 all representations, warranties and indemnities shall insofar as are
appropriate remain in full force and effect;
8.4.4 the rights of inspection and audit set out in Clause 6 shall
continue in force for a period of one year;
8.4.5 all rights and licenses granted pursuant to this Agreement and to
the RPI Intellectual Property pursuant to the JDOA (including the
rights of Newco pursuant to Clause 11 of the JDOA with respect to
patent prosecution and maintenance; and the rights of Newco to the
RPI Intellectual Property pursuant to Clause 7.2 of the JDOA with
respect to the development and commercialization of Angiozyme(TM)
using the System) shall cease for the Territory or for such
particular country or countries in the Territory (as the case may
be) and shall revert to or be transferred to RPI, and Newco shall
not thereafter use in the Territory or in such particular country or
countries in the Territory (as the case may be) any rights covered
by this Agreement;
8.4.6 subject to Clause 8.4.7 and to such license, if any, granted by
Newco to RPI pursuant to the provisions of Clause 12 of the JDOA
(entitled "Cross Licensing/Exploitation of Products Outside the
Field"), all rights to Newco Intellectual Property shall be
transferred to and jointly owned by RPI and Elan and may be
exploited by both Elan and RPI separately, provided that Elan and
RPI will cooperate reasonably in the prosecution and maintenance of
patents claiming such technology and rights and provided further
that nothing hereunder shall grant, or be construed to grant, the
right (a) to Elan to make, have made, import, use, offer for sale or
sell the Target Ribozyme, and (b) to RPI to make, have made, import,
use, offer for sale or sell the System;
In the event of a dispute arising pursuant to this Clause 8.4.6,
Elan and RPI agree to negotiate in good faith on the course of
action to be taken with respect to determining their respective
entitlements pursuant to this Clause; and
8.4.7 the rights of permitted third party sub-licensees in and to the RPI
Intellectual Property shall survive the termination of the license
and sublicense agreements granting said intellectual property rights
to Newco; and Newco, Elan and RPI shall in good faith agree upon the
form most advantageous to Elan and RPI in which the rights of Newco
under any such licenses and sublicenses are to be held (which form
may include continuation of Newco solely as the holder of such
licenses or assignment of such rights to a third party or parties,
including an assignment to both Elan and RPI).
Any sublicense agreement between Newco and such permitted
sublicensee shall permit an assignment of rights by Newco and shall
contain appropriate confidentiality provisions.
<PAGE>
9. CONFIDENTIAL INFORMATION
9.1 The Parties agree that it will be necessary, from time to time, to disclose
to each other confidential and proprietary information, including without
limitation, inventions, works of authorship, trade secrets, specifications,
designs, data, know-how and other proprietary information relating to the
Field, the Products, processes, services and business of the disclosing
Party.
The foregoing shall be referred to collectively as "Confidential
Information".
9.2 Any Confidential Information disclosed by one Party to another Party shall
be used by the receiving Party exclusively for the purposes of fulfilling
the receiving Party's obligations under this Agreement and the JDOA and for
no other purpose.
9.3 Each Party shall disclose Confidential Information of the other Party only
to those employees, representatives and agents requiring knowledge thereof
in connection with fulfilling the Party's obligations under this Agreement.
Each Party further agrees to inform all such employees, representatives and
agents of the terms and provisions of this Agreement and their duties
hereunder and to obtain their agreement hereto as a condition of receiving
Confidential Information. Each Party shall exercise the same standard of
care as it would itself exercise in relation to its own confidential
information (but in no event less than a reasonable standard of care) to
protect and preserve the proprietary and confidential nature of the
Confidential Information disclosed to it by the other Party. Each Party
shall, upon request of the other Party, return all documents and any copies
thereof containing Confidential Information belonging to, or disclosed by,
such other Party.
9.4 Any breach of this Clause 9 by any person informed by one of the Parties is
considered a breach by the Party itself.
9.5 Confidential Information shall not be deemed to include:
9.5.1 information that is in the public domain;
9.5.2 information which is made public through no breach of this
Agreement;
9.5.3 information which is independently developed by a Party as evidenced
by such Party's records;
9.5.4 information that becomes available to a Party on a non-confidential
basis, whether directly or indirectly, from a source other than a
Party, which source did not acquire this information on a
confidential basis; or
9.5.5 information which the receiving Party is required to disclose
pursuant to:
<PAGE>
(i) a valid order of a court or other governmental body; or
(ii) any other requirement of law;
provided that if the receiving Party becomes legally required to
disclose any Confidential Information, the receiving Party shall
give the disclosing Party prompt notice of such fact so that the
disclosing Party may obtain a protective order or other
appropriate remedy concerning any such disclosure. The receiving
Party shall fully co-operate with the disclosing Party in
connection with the disclosing Party's efforts to obtain any such
order or other remedy. If any such order or other remedy does not
fully preclude disclosure, the receiving Party shall make such
disclosure only to the extent that such disclosure is legally
required.
9.6 The provisions relating to confidentiality in this Clause 9 shall remain in
effect during the term of this Agreement, and for a period of 7 years
following the expiration or earlier termination of this Agreement.
9.7 The Parties agree that the obligations of this Clause 9 are necessary and
reasonable in order to protect the Parties' respective businesses, and each
Party agrees that monetary damages would be inadequate to compensate a
Party for any breach by the other Party of its covenants and agreements set
forth herein.
Accordingly, the Parties agree that any such violation or threatened
violation shall cause irreparable injury to a Party and that, in addition
to any other remedies that may be available, in law and equity or
otherwise, each Party shall be entitled to obtain injunctive relief against
the threatened breach of the provisions of this Clause 9, or a continuation
of any such breach by the other Party, specific performance and other
equitable relief to redress such breach together with its damages and
reasonable counsel fees and expenses to enforce its rights hereunder,
without the necessity of proving actual or express damages.
10. GOVERNING LAW AND JURISDICTION; ARBITRATION
10.1. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the provisions
thereof relating to the conflict of laws.
10.2 The Parties will attempt in good faith to resolve any dispute arising out
of or relating to this Agreement promptly by negotiation between
executives of the Parties. In the event that such negotiations do not
result in a mutually acceptable resolution, the Parties agree to consider
other dispute resolution mechanisms including mediation.
<PAGE>
In the event that the Parties fail to agree on a mutually acceptable
dispute resolution mechanism, any such dispute shall be finally settled
by arbitration pursuant to Clause 10.3.
10.3 Any dispute under this Agreement which is not settled by mutual consent
under Clause 10.2 and which relates to (i) the interpretation or
enforcement of any provision of this Agreement, (ii) the interpretation
or application of law, or (iii) the ownership of any intellectual
property shall be finally settled by binding arbitration, conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") by one arbitrator appointed in accordance
with said rules. Such arbitrator shall be an independent expert in
pharmaceutical product development and marketing (including clinical
development and regulatory affairs) and shall be reasonably satisfactory
to each of the Parties; provided, that if the Parties are unable to agree
upon the identity of such arbitrator within 15 days of demand by either
Party, then either Party shall have the right to petition the AAA to
appoint an arbitrator.
The arbitration shall be held in New York, New York.
The arbitrator shall determine what discovery will be permitted,
consistent with the goal of limiting the cost and time which the Parties
must expend for discovery; provided the arbitrator shall permit such
discovery as they deem necessary to permit an equitable resolution of the
dispute.
Any written evidence originally in a language other than English shall be
submitted in English translation accompanied by the original or a true
copy thereof.
The costs of the arbitration, including administrative and arbitrators'
fees, shall be shared equally by the Parties and each Party shall bear
its own costs and attorneys' and witness' fees incurred in connection
with the arbitration.
In rendering judgment, the arbitrators may not provide for punitive or
similar exemplary damages.
A disputed performance or suspended performances pending the resolution
of the arbitration must be completed within 30 days following the final
decision of the arbitrators or such other reasonable period as the
arbitrators determine in a written opinion.
Any arbitration under this Agreement shall be completed within one year
from the filing of notice of a request for such arbitration.
The arbitration proceedings and the decision shall not be made public
without the joint consent of the Parties and each Party shall maintain
the confidentiality of such proceedings and decision unless otherwise
permitted by the other Party.
<PAGE>
The Parties agree that the decision shall be the sole, exclusive and
binding remedy between them regarding any and all disputes, controversies,
claims and counterclaims presented to the arbitrators. Application may be
made to any court having jurisdiction over the Party (or its assets)
against whom the decision is rendered for a judicial recognition of the
decision and an order of enforcement.
11. IMPOSSIBILITY OF PERFORMANCE - FORCE MAJEURE
Neither RPI nor Newco shall be liable for delay in the performance of any
of its obligations hereunder if such delay results from causes beyond its
reasonable control, including, without limitation, acts of God, fires,
strikes, acts of war, intervention of a government authority, but any such
delay or failure shall be remedied by such Party as soon as practicable.
12. ASSIGNMENT
This Agreement may not be assigned by either Party without the prior
written consent of the other, save that either Party may assign this
Agreement to its Affiliates or subsidiaries without such prior written
consent; provided that such assignment does not have any adverse tax
consequences on the other Party.
13. NOTICES
13.1 Any notice to be given under this Agreement shall be sent in writing in
English by registered airmail or telefaxed to the following addresses:
If to Newco at:
Medizyme Pharmaceuticals Ltd.
102 St. James Court
Clarendon House
Church St.
Hamilton, Bermuda
Attention: Secretary
Telephone: 441-295-1422
Fax: 441-292-4720
with a copy to Elan, plc and EPIL at:
Elan Corporation, plc
Elan Pharma International Limited
<PAGE>
C/o Elan International Services, Ltd.
102 St. James Court
Flatts,
Smiths FL04
Bermuda
Attention: Secretary
Telephone: 441 292 9169
Fax: 441 292 2224
If to RPI at:
Ribozyme Pharmaceuticals Incorporated
2950 Wilderness Place
Boulder, Colorado 80301
Attention: Chief Executive Officer
Telephone 303-449-6500
Fax: 303-449-6995
with a copy to:
Rothgerber Johnson & Lyons LLP
One Tabor Center, Suite 3000
1200 Seventeenth Street
Denver, Colorado 80202
Attention: Woody Davis, Esq.
Telephone 303-623-9000
Fax: 303-623-9222
If to Elan, plc and/or EPIL at:
Elan Corporation, plc
Elan Pharma International Limited
C/o Elan International Services, Ltd.
102 St. James Court
Flatts,
Smiths FL04
Bermuda
Attention: Secretary
Telephone: 441 292 9169
Fax: 441 292 2224
or to such other address(es) and telefax numbers as may from time to time
be notified by either Party to the other hereunder.
<PAGE>
13.2 Any notice sent by mail shall be deemed to have been delivered within seven
7 working days after dispatch and any notice sent by telex or telefax shall
be deemed to have been delivered within twenty 24 hours of the time of the
dispatch. Notice of change of address shall be effective upon receipt.
14. MISCELLANEOUS
14.1 Waiver:
-------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any other breach or failure to perform or of any
other right arising under this Agreement.
14.2 Severability:
-------------
If any provision in this Agreement is agreed by the Parties to be, or is
deemed to be, or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto:
14.2.1 such provision will be deemed amended to conform to applicable laws
so as to be valid and enforceable; or
14.2.2 if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect from the
date of such agreement or such earlier date as the Parties may
agree, and the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired or
affected in any way.
14.3 Further Assurances:
-------------------
At the request of any of the Parties, the other Party or Parties shall (and
shall use reasonable efforts to procure that any other necessary parties
shall) execute and perform all such documents, acts and things as may
reasonably be required subsequent to the signing of this Agreement for
assuring to or vesting in the requesting Party the full benefit of the
terms hereof.
14.4 Successors:
-----------
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
14.5 No Effect on Other Agreements/Conflict:
---------------------------------------
<PAGE>
No provision of this Agreement shall be construed so as to negate, modify
or affect in any way the provisions of any other agreement between the
Parties unless specifically referred to, and solely to the extent provided
herein.
In the event of a conflict between the provisions of this Agreement and the
provisions of the JDOA, the terms of the JDOA shall prevail unless this
Agreement specifically provides otherwise.
14.6 Amendments:
-----------
No amendment, modification or addition hereto shall be effective or binding
on any Party unless set forth in writing and executed by a duly authorized
representative of each Party.
14.7 Counterparts:
-------------
This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which when
taken together shall constitute this Agreement.
14.8 Good Faith:
-----------
Each Party undertakes to do all things reasonably within its power which
are necessary or desirable to give effect to the spirit and intent of this
Agreement.
14.9 No Reliance:
------------
Each Party hereby acknowledges that in entering into this Agreement it has
not relied on any representation or warranty save as expressly set out
herein or in any document referred to herein.
14.10 Relationship of the Parties:
----------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute Elan and Newco as partners, or Elan as an employee of Newco, or
Newco as an employee of Elan.
Neither Party hereto shall have any express or implied right or authority
to assume or create any obligations on behalf of or in the name of the
other Party or to bind the other Party to any contract, agreement or
undertaking with any third party.
<PAGE>
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
SIGNED
BY_______________________
For and on behalf of
Ribozyme Pharmaceuticals, Inc.
SIGNED
BY: _____________________
For and on behalf of
Medizyme Pharmaceuticals Ltd.
CONSENTED AND AGREED TO:
SIGNED
BY: ____________________
for and on behalf of
Elan Corporation, plc acting
through its division Elan
Pharmaceutical Technologies
SIGNED
BY: ____________________
for and on behalf of
Elan Pharma International Limited
<PAGE>
SCHEDULE 1
----------
RPI PATENTS
CECH PATENTS - US
<TABLE>
<CAPTION>
Title/Invention Patent No. Assignee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 RNA Ribozyme Polymerases, US 4,987,071 University Patents, Inc.
Dephosphorylases, Restriction
Endoribonucleases and Methods
-----------------------------------------------------------------------------------------------------
2 RNA Ribozyme Polymerases, and Methods US 5,037,746 University Patents, Inc.
- ------------------------------------------------------------------------------------------------------
3 RNA Ribozyme Polymerases, US 5,093,246 University Patents, Inc.
Dephosphorylases, Restriction
Endoribonucleases and Methods
- ------------------------------------------------------------------------------------------------------
4 RNA Ribozyme Restriction US 5,116,742 University Patents, Inc.
Endoribonucleases and Methods
- ------------------------------------------------------------------------------------------------------
5 RNA Ribozyme Which Cleaves Substrate RNA US 5,354,855 University Patents, Inc.
Without Formation of a Covalent Bond
- ------------------------------------------------------------------------------------------------------
6 RNA Ribozyme Polymerases, US 5,591,610 University Patents, Inc.
Dephosphorylases, Restriction
Endoribonucleases and Methods
- ------------------------------------------------------------------------------------------------------
</TABLE>
CECH PATENTS - FOREIGN
<TABLE>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 RNA Ribozyme Polymerases, European Patent No. University Patents, Inc.
Dephosphorylases, Restriction N0. 291533 B1
Endoribonucleases and Methods
- ------------------------------------------------------------------------------------------------------
2 RNA Ribozyme Polymerases, Japanese Patent No. University Patents, Inc.
Dephosphorylases, Restriction No. 2530906
Endoribonucleases and Methods
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
OTHER PATENTS/1/
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
1 ErbB-2/neu Targeted Ribozymes U.S. 5,599,704 RPI
- -----------------------------------------------------------------------------------------------------
2 Method and Reagent for Inhibiting Australian Pat.
Cancer Development No. 687001 RPI
- -----------------------------------------------------------------------------------------------------
3 [ * ] [ * ] RPI
- -----------------------------------------------------------------------------------------------------
4 [ * ] US Patent Pending RPI
- -----------------------------------------------------------------------------------------------------
5 [ * ] US Patent Pending RPI
- -----------------------------------------------------------------------------------------------------
</TABLE>
________________
/1/ In addition to the patents listed in this table, RPI has rights to several
patents covering various aspects of ribozyme technology such as chemical
stabilization of ribozymes, new ribozyme motifs, and manufacture of ribozymes,
all of which provide additional coverage for the HERZYME Ribozyme Product. RPI
has rights to 102 issued/allowed patents and over 100 applications pending
worldwide covering various aspects of Ribozyme Technology
<PAGE>
SCHEDULE 2/1/
TECHNOLOGICAL COMPETITORS OF ELAN
[ * ]
1. Including any and all divisions or subsidiaries of such entities and
successor entities.
<PAGE>
EXHIBIT 12
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.25B-2B OF THE SECURITIES EXCHANGE ACT OF 1934. [*] INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST AND IS FILED
SEPARATELY WITH THE COMMISSION.
THIS AGREEMENT is made this day of January 2000 between:
(1) AVECIA LIMITED acting through its LifeScience Molecules business whose
registered office is at Hexagon House, Blackley, Manchester, M9 8ZS,
England ("AVECIA");
(2) RIBOZYME PHARMACEUTICALS INCORPORATED of 2950 Wilderness Place, Boulder,
Colorado 80301, USA ("RPI").
WHEREAS
(A) AVECIA has experience and knowledge with regard to the manufacture of
oligonucleotides and intermediates for preparation of oligonucleotides,
process scale-up and GMP (as defined below).
(B) RPI is carrying out research and development work in relation to certain
ribozymes.
(C) It is intended that AVECIA will carry out a development programme upon and
subject to the terms and conditions of this Agreement with a view to
scaling up the process for production of such ribozymes and carrying out
initial production of such ribozymes as set out in Part II of this
Agreement and carrying out such production on behalf of RPI as set out in
Part III of this Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
PART I - DEFINITIONS AND INTERPRETATION
---------------------------------------
1. Headings and Definitions
------------------------
1.1 In this Agreement, the following terms and expressions shall have the
following meanings:
Angiozyme means RPI's proprietary anti-angiogenesis ribozyme
compound being jointly developed with Chiron
Corporation. Angiozyme is also designated as
Angiozyme.(TM)
S-1
<PAGE>
Anti-HCV means RPI's proprietary anti-hepatitis c virus Ribozyme
ribozyme compound being jointly developed with Eli
Lilly & Company. Anti-HCV Ribozyme is also designated
as Heptazyme.
Collaborator means any of Chiron Corporation, Eli Lilly & Company or
other corporate partner of RPI who is collaborating
with RPI to develop and commercialise a Product
manufactured under this Agreement, or any licensee of
RPI who is developing and commercialising a Product
manufactured under this Agreement. "Collaborators"
shall mean more than one of them.
Confidential means any information disclosed by RPI to AVECIA
Information pursuant to the Technology Transfer, and any technical
and commercial information relating to the Programme
and any other information of a confidential nature
disclosed (whether disclosed in writing, verbally, by
way of sample or by any other means and whether
directly or indirectly) by either party ("the
Disclosing Party") to the other ("the Receiving
Party"), including and without limitation any
information relating to the Disclosing Party's business
affairs.
GMP means current good manufacturing practices (as provided
for, respectively, in the Rules governing Medicinal
Products in the European Community Volume 4 (Guide to
Good Manufacturing Practice for Medicinal Products) and
by the US Food and Drug Administration as set out in
21CFR210 and 21CFR211, as amended from time to time)
the responsibilities of each party in respect of which
for each Product shall be agreed and defined in the
Quality Agreement, and shall be consistent with the
interpretation for Active Pharmaceutical Intermediates
in guidance documents provided by the Federal Drug
Administration and the International Conference on
Harmonisation.
Effective Date means 13/th/ December 1999.
Intellectual means all know-how, inventions, discoveries, Property
devices, data, patents, designs, copyrights, or other
industrial or intellectual property in all applications
therefor.
S-2
<PAGE>
JRC means the joint review committee provided for in Clause
4 and Schedule 2.
<PAGE>
Nominated means a contract manufacturer nominated by RPI to
Manufacturer carry out manufacture of the Product(s) on RPI's behalf
and which has agreed to enter into confidentiality
undertakings with AVECIA pursuant to Clause 12.4 below.
Process means the process for production of the Product(s) as
developed during the Programme.
Product means, unless stated specifically, Angiozyme, Anti-HCV
Ribozyme or such other Ribozyme product agreed by the
parties. "Products" shall be a reference to such
Ribozymes taken together.
Product means the specification designated by RPI for each of
Specification the Product(s) and as set out and
determined by the analytical test methods in the
Quality Agreement.
Programme means the programme for development of the Process
(including the Technology Transfer) referred to in
Clause 2 and more specifically detailed in Schedule 1.
Quality means the agreement made between AVECIA and
Agreement RPI in respect of each Product, the terms of which
shall be agreed by the JRC prior to commencement of
manufacture and supply of each Product on a case by
case basis. A draft of the Quality Agreement is
attached as Schedule 3.
Ribozyme means a ribonucleic acid-based molecule able to cause
catalytic cleavage of itself or another molecule
independent of protein.
Technical means the agreement made between AVECIA and
Agreement RPI, the terms of which shall be agreed by the JRC,
detailing the process information and analytical
methods to be communicated to AVECIA during the
Technology Transfer. A draft of the Technical Agreement
is attached as Schedule 4.
Technology means the communication by RPI of technical
Transfer information, including processes and analytical
methods, relating to the Products to AVECIA as may be
required
S-4
<PAGE>
by AVECIA to carry out the Programme and as
further set forth in the Technical Agreement.
1.2 The headings of the several sections of this Agreement are intended
for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
1.3 References to recitals, clauses, paragraphs and Schedules are to
recitals, clauses and paragraphs of and Schedules to this Agreement.
The Schedules and any attachments form part of this Agreement and
shall have the same force and effect as if expressly set out in the
body of the Agreement and any reference to the Agreement shall include
the Schedules and any attachments.
PART II - THE PROGRAMME
-----------------------
2. Performance of the Programme
----------------------------
2.1 The Technology Transfer shall be deemed to have commenced on the
Effective Date. During the Technology Transfer, RPI shall give all
appropriate technical assistance reasonably requested by AVECIA in
relation to the Technology Transfer.
2.2 AVECIA will carry out the work as detailed in the Programme (as may be
amended from time to time in writing by the JRC).
2.3 Subject to Clause 4.2 below, the Programme has four stages as set out
below and as more specifically detailed in Schedule 1 ("Stage(s)"),
provided that AVECIA shall, at all times during any Stage, have the
flexibility to carry out the requirements of the Programme in such
manner and at such times as AVECIA shall see fit and at its sole
discretion and subject to the overall supervision of the JRC and the
provisions of Clause 4.
Stages in Programme
Stage Description
----- -----------
1 Technology Transfer of process and analytical methods
2 Process development - deprotection and purification scale-up
of the Products as determined by the JRC
3 preparation of GMP manufacturing documentation
4 Process scale up - GMP manufacture of 1kg of a mutually
agreed Product
S-5
<PAGE>
2.4 The process information and analytical methods to be communicated to
AVECIA during the Technology Transfer shall be agreed and detailed in
the Technical Agreement. Stage 2 of the Programme shall commence when
the JRC confirms that the Technology Transfer is complete according to
the verification protocol (set forth in the Quality Agreement) to
ensure such information has been received and correctly interpreted.
2.5 Stage 3 of the Programme shall not commence until:
(a) the identity of the first Product to be produced during Stage 4
using the Process is confirmed;
(b) the analytical methods for the Products have been transferred
from RPI to AVECIA; and
(c) the JRC confirms AVECIA's ability to manufacture the Product to
be produced during Stage 4 using the Process.
2.6 For the avoidance of doubt, any time periods specified in Schedule 1
shall be indicative only unless provided for specifically in this
Clause 2.
2.7 AVECIA shall be responsible for obtaining all raw materials and
reagents in order to produce the Product, including solvents, gases,
amidites and other laboratory consumables and the solid support, to be
utilised in conjunction with synthesis of a Product during the
Programme.
2.8 For the avoidance of doubt, it shall not be considered a breach of
this Agreement by AVECIA if an objective of the Programme is not
achieved:
(a) so long as AVECIA uses reasonable commercial and technical
diligence and makes good faith efforts to perform its obligations
to the fullest extent, and any failure to meet an objective of
the Programme shall not relieve RPI of its obligations to make
payment in accordance with Clause 3; or
(b) due to delay caused or contributed to by RPI.
3. Payment for the Programme and First Kilogram of Product
-------------------------------------------------------
Subject to Clauses 4.2 and 13 below, RPI shall pay to AVECIA the following
sums at the time stated:
(a) on signature of this Agreement by both parties: [ * ]; and
(b) upon receipt of Product by RPI but subject to Clause 4.5 below: [ * ]
per gram of Product manufactured to the Product Specification during
Stage 4 of the
S-6
<PAGE>
Programme and available for delivery to RPI by AVECIA (subject to a
maximum of [ * ]for up to one kilogram of the Product manufactured
during stage 4 of the Programme unless otherwise agreed under Clause
5.3 below).
For the avoidance of doubt, a gram of Product shall mean a gram of nucleic
acid material which meets the Product Specification, net of any
accompanying salts, water or other residual solvents.
4. Reporting, Variation and Completion of the Programme
----------------------------------------------------
4.1 The Programme and the progress by AVECIA under the Programme shall be
supervised by the JRC which shall be established within the period of
30 days following the date of this Agreement. Such supervision by the
JRC shall take place in accordance with the provisions set out in
Schedule 2.
4.2 The parties may agree to alter the Programme either to extend the
projected duration of any of the Stages or to change any of the work
contained in any of the Stages provided that the parties shall first
agree in writing the terms of such extension and alteration of the
Programme including any amended payment terms.
4.3 The parties shall conduct regular information exchange on at least two
(2) weekly intervals by telephone or in a manner to be agreed by the
JRC, provided that where AVECIA considers that, for the purposes of
optimising or improving the Process, revisions or changes in methods
should be undertaken by AVECIA during the performance of the
Programme, AVECIA shall notify the JRC without delay of the reasons
therefor and the actions which it proposes to take.
4.4 Completion of the Programme will be deemed to have occurred when the
quantity of Product specified in Stage 4 has been manufactured in
accordance with the Product Specification and has been made available
for delivery to RPI pursuant to Clause 5 below.
4.5 RPI shall pay to AVECIA within thirty (30) days of the completion of
the Programme any sums required to be paid pursuant to Clause 3 above
which may remain outstanding at the completion of the Programme.
Notwithstanding the foregoing, and subject to Clause 13, in respect of
the Product held by AVECIA pursuant to Clause 5.1(a), RPI shall not be
obligated to make any payments to AVECIA pursuant to Clause 3(b) prior
to 1/st/ January 2001, unless RPI requests delivery of the Product
prior to 1/st/ January 2001, in which case RPI shall make payments to
AVECIA for the quantity of Product requested by RPI within 30 days of
the date of the invoice for the Product.
S-7
<PAGE>
5. Delivery of First Kilogram of Product under Stage 4
---------------------------------------------------
5.1(a) Manufacture of the one kilogram (1kg) of the Product specified in
Stage 4 shall take place on the date(s) agreed by the parties.
AVECIA shall hold such manufactured Product in stock at its
facilities and at its expense under the terms of the Quality
Agreement, including the storage and stability instructions
provided by RPI to AVECIA. Any Product so held by AVECIA shall be
deemed to have been delivered and any risk shall immediately pass
to RPI, except insofar as any damage occurs to the Product as a
result of the negligence of AVECIA.
(b) Avecia shall use its best endeavours to deliver one kilogram
(1kg) of Product as specified in Stage 4. However, if AVECIA
shall manufacture at least [ * ] and up to [ * ], RPI shall be
obliged to purchase all such Product from AVECIA during 2000
subject to Clause 5.3 below. Subject to the foregoing, during
2000 AVECIA shall deliver quantities of Product at RPI's request
from time to time, such request not to be for less than 250 grams
of Product.
5.2 In the event that only a portion of the Product produced during
Stage 4 is delivered to RPI, RPI shall be responsible only to pay
for the quantity of the Product delivered.. If the quantity of
the Product supplied by AVECIA is less than [ * ], then AVECIA
agrees to synthesise sufficient Product in order to supply the
shortfall quantity of Product to RPI, and the price for such
shortfall quantity shall be no more than that paid by RPI for the
initial delivered quantity. In the event that AVECIA then
produces more than the 1 kilogram (1kg) of Product specified in
Stage 4, the provisions of Clause 5.3 shall apply.
5.3 In the event that AVECIA produces more than the 1 kilogram (1kg)
of Product specified in Stage 4, RPI agrees to purchase such
additional quantity up to a maximum of [ * ] at a price to be
negotiated in good faith by the parties. Such agreed price shall
be less than [ * ] per gram and shall be determined according to
the yield and price matrix attached as Schedule 5 hereto. In the
event that AVECIA produces more than [ * ] of the Product, RPI
shall have an option, but not an obligation, to purchase such
additional quantity of the Product at its sole discretion at a
price per gram which does not exceed the price per gram paid for
the additional [ * ] of the Product.
5.4 Avecia will arrange for shipment and insurance of the Product
produced during Stage 4 of the Programme to RPI as directed by
RPI at RPI's cost and expense. The Products will be shipped and
packaged by Avecia in accordance with RPI's shipping and
packaging instructions as may be agreed from time to time.
Deliveries will be made FOB Avecia's Grangemouth facility
(Incoterms 2000) and will be shipped to RPI's address as set
forth in this Agreement, or as otherwise directed by RPI in
writing. Risk and title in respect of all Product
S-8
<PAGE>
supplied to RPI under this Agreement shall pass on delivery at
AVECIA's Grangemouth facility.
6. Intellectual Property arising during the term of this Agreement
---------------------------------------------------------------
6.1 Pre-Existing and Independently Developed Intellectual Property.
--------------------------------------------------------------
Subject to the obligations of confidentiality contained in Clause 12
below and subject to Clause 6.2 below, each party shall be entitled to
apply for registrations of its Intellectual Property provided that
nothing in this Agreement shall affect the ownership by either party
of any Intellectual Property owned or in the possession of that party
at the date of this Agreement, or Intellectual Property developed
independently of this Agreement by any employee of that party without
reference to any of the Confidential Information disclosed by the
other party.
6.2 Ownership.
---------
(a) All rights in patents, inventions, processes, discoveries,
biological samples and other research materials and any other
novel or valuable information reflected in any medium which
arises or is created during the course of this Agreement shall be
the property of the creating party. The Parties shall promptly
report to each other any inventions, discoveries, biological
samples or other research materials made to the Process or to the
Products under the Agreement.
(b) Intellectual Property, whether or not patentable, which may arise
under this Agreement and made solely by an employee or agent of
RPI shall be owned by RPI ("RPI Inventions").
(c) Intellectual Property, whether or not patentable, made jointly by
an employee or agent of RPI and AVECIA shall be jointly owned
("Joint Inventions").
(d) Intellectual Property, whether or not patentable, which may arise
under this Agreement and made solely by an employee or agent of
AVECIA shall be owned by AVECIA ("AVECIA Inventions").
(e) Inventorship will be determined according to applicable patent
law.
(f) AVECIA and RPI shall promptly disclose to each other in writing
each invention and discovery conceived and/or reduced to practice
under this Agreement.
(g) Intellectual Property arising from this Agreement and in the
possession of a party shall be treated as having been disclosed
to that party by the
S-9
<PAGE>
party owning such Intellectual Property pursuant to this Clause
6.2, and the expressions "Disclosing Party" and "Receiving Party"
defined and used in connection with the obligations of
confidentiality contained in Clause 12 shall be construed
accordingly.
(h) In the event of a Joint Invention, RPI and AVECIA, and any wholly
owned group company of either, shall each be entitled to work
under such joint invention, but otherwise no sub-licensing shall
be permitted without the written consent of the joint inventor,
such consent not to be unreasonably withheld or delayed.
6.3 Limited Licence to carry out the activities under this Agreement.
-----------------------------------------------------------------
Each party grants to the other a limited, non-exclusive, royalty-free
licence to do all things necessary in order to carry out the
obligations and responsibilities under this Agreement under its
Intellectual Property (whether pre-existing Intellectual Property
under Clause 6.1 above or Intellectual Property arising as a result of
the Agreement under Clause 6.2(b) or (d) above). Such licence shall
expire at the completion of the Agreement and shall not be
transferable or sub-licensable.
6.4 Maintenance of Patents.
----------------------
(a) Subject to Clauses 6.1 and 6.4(e), RPI shall be responsible for
filing, prosecuting and maintaining patent applications and
resulting patents, if any, on RPI Inventions and on any Joint
Inventions insofar as they do not relate to synthesis or
manufacture of oligonucleotides other than Ribozymes.
(b) Subject to Clauses 6.1 and 6.4(e), AVECIA shall be responsible
for filing, prosecuting and maintaining patent applications and
resulting patents, if any, on AVECIA Inventions or on any Joint
Inventions relating to synthesis or manufacture of
oligonucleotides other than Ribozymes.
(c) Reasonable patent expenses for any Joint Invention will be shared
equally by the Parties, and reimbursed promptly upon presentation
of an invoice by the filing party.
(d) The non-filing party shall have the right to review and comment
in a timely manner on any such patent filings (applications and
response to office actions) prior to submission to the relevant
patent offices. Each party shall be solely responsible for
filing, prosecuting and maintaining patent applications and
resulting patents on any invention owned solely by it.
S-10
<PAGE>
(e) Each of AVECIA and RPI shall solely own its respective technology
and any technology or other technology developed solely by it and
each shall be responsible for filing, prosecuting and monitoring
patent applications and resulting patents, if any, related
thereto.
6.5 Reservation of All Other Rights. Except as expressly set forth in
-------------------------------
this Agreement, nothing contained herein shall be construed as to
create any right to:
(a) AVECIA in any Intellectual Property of RPI or any other
proprietary technology (whether pre-existing Intellectual
Property under Clause 6.1 above or Intellectual Property arising
as a result of this Agreement under Clause 6.2(b)) of RPI
including, without limitation, any of RPI's patent rights
relating to the design, synthesis, delivery, development,
testing, use and sale of Ribozymes; or
(b) RPI in AVECIA Intellectual Property or any other proprietary
technology (whether pre-existing Intellectual Property under
Clause 6.1 above or Intellectual Property arising as a result of
this Agreement under Clause 6.2(d))of AVECIA.
PART III - SUBSEQUENT MANUFACTURE OF THE PRODUCT
------------------------------------------------
7. Sale and Purchase
-----------------
7.1 Minimum Order. Unless this Agreement has been terminated under
-------------
Clauses 13 or 21 below, RPI agrees that, following completion of the
Programme, it shall purchase a minimum of [ * ] of the Products in
aggregate ("the Product Minimum") from AVECIA during the calendar
years 2000 to 2002, pursuant to the pricing and delivery provisions
contained in Clauses 7.2 and 7.3 below.
7.2 Price for Product. The parties shall negotiate in good faith the
-----------------
pricing schedule for the Products, on a per gram basis, to be
manufactured by AVECIA following completion of the Programme prior to
the manufacture of each order of Product. An example of the pricing
schedule is attached as Schedule 5 hereto. The price for quantities of
Products manufactured by Avecia following completion of the Programme
shall be based on:
(a) yields achieved dependent upon usage of raw materials; and on
(b) order volume, provided that for individual orders of less than
500 grams of Product the price per gram for such Product shall
not exceed [ * ] of the per gram price for Product(s) ordered
for delivery in multiples of 500 grams or more.
S-11
<PAGE>
7.3 Delivery Schedule. The parties shall agree on a schedule for
-----------------
delivery of Products by AVECIA to RPI ("the Delivery Schedule"). The
minimum order shall be 500 grams of Product except as otherwise
agreed subject to the pricing provisions of Clause 7.2 above.
7.4 Delivery. AVECIA will arrange for shipment and insurance of the
--------
Products ordered for delivery to RPI at RPI's direction and at RPI's
cost and expense. The Products will be shipped and packaged by
AVECIA in accordance with RPI's shipping and packaging instructions
as may be agreed from time to time. Deliveries will be made FOB
Avecia's Grangemouth facility (Incoterms 2000) and will be shipped
to RPI's address as set forth in this Agreement, or as otherwise
directed by RPI in writing. Risk and title in respect of all Product
supplied to RPI under this Agreement shall pass on delivery at
AVECIA's Grangemouth facility
7.5 Delivery Quantities
-------------------
(a) In the event that AVECIA delivers less than [ * ]of the amount of
Product required to be delivered pursuant to the delivery schedule
agreed under Clause 7.3 above, RPI shall, subject to Clause 8, pay
AVECIA for the actual amount of Product delivered. Avecia shall
synthesise sufficient Product to complete the order and will supply
this to RPI and the price for such completion quantity shall be no
more, on a per gram basis, than that paid by RPI for the initial
delivered quantity under that order. For the avoidance of doubt, if
AVECIA delivers [ * ] of the amount of Product, RPI shall, subject
to Clause 8, be obligated to pay AVECIA only for the [ * ] of the
Product delivered.
(b) In the event that Avecia manufactures Product in quantities
exceeding the amount ordered for delivery under the delivery
schedule, RPI agrees to purchase upto [ * ] of the order volume at a
price to be negotiated in good faith by the parties in respect of
the additional [ * ], according to the yield and price matrix
attached as Schedule 5, but such amount shall not cost more per gram
than for the said amount ordered In the event AVECIA produces more
than [ * ] of the Product, RPI shall have an option, but no
obligation, to purchase such additional quantity of the Product at
its sole discretion at a price per gram not to exceed the price per
gram paid for the additional quantity of the Product.
7.6 Delay in Delivery. In the event that the AVECIA delivers any
-----------------
Product later than four weeks from the date of delivery set out in
the Delivery Schedule other than as a result of Force Majeure as set
out in Clause 21, RPI shall be entitled to a five per cent reduction
in the price of the Product delivered one month late and to an
additional ten per cent reduction in price for each of the next two
complete month's delay thereafter. In the event AVECIA is unable to
deliver the Product within three months from the date set out in the
Delivery Schedule, then RPI shall have the option to either
terminate the Agreement pursuant to
S-12
<PAGE>
Clause 13.3(b) or to manufacture or have manufactured by a Nominated
Manufacturer the Product. In the event RPI chooses the latter
option, then in order to satisfy RPI's requirement for that quantity
of the Product ordered, AVECIA, subject to Clause 12, agrees (i) to
make a good faith effort to provide, at no cost to RPI or to a
Nominated Manufacturer, the technical information necessary for such
manufacture of the Product; and (ii) to grant to RPI or a Nominated
Manufacturer a personal, royalty free licence under AVECIA's
relevant Intellectual Property to enable RPI or such Nominated
Manufacturer to undertake the manufacture of the Product7.7 Invoices
--------
and Payment Terms. AVECIA shall issue an invoice at the price agreed
-----------------
under Clause 7.2, as adjusted pursuant to Clause 7.6 if relevant,
above in respect of each shipment of the Product to RPI on despatch
by AVECIA of the Product for delivery to RPI. RPI shall pay all such
invoices in full within thirty days from the date of invoice,
provided that RPI shall not have rejected such delivery of Product
under Clause 8.1. In the event that payment is made by RPI before
any Product is examined by RPI pursuant to Clause 8.2, AVECIA will
reimburse RPI for the price of such Product if it is found that the
Product does not meet the Product Specification.
7.8 Responsibility for Raw Materials. AVECIA shall be responsible for
--------------------------------
obtaining all raw materials and reagents in order to produce the
Product, including solvents, gases, amidites and other laboratory
consumables and the solid support, to be utilised in conjunction
with synthesis of a Product.
7.9 Third Party Price Notice. After a period of [ * ] from signature
------------------------
of this Agreement, RPI shall be entitled to give AVECIA written
notice if a third party under a supply agreement with RPI of at
least three years duration is able to supply identical products in
identical volumes to RPI at a price which is at least ten per cent
lower than the price for the Products agreed under Clause 7.2 above
("Third Party Price Notice"). RPI and AVECIA shall meet to discuss
the position and if agreement on price is not reached within 30 days
of receipt of such Third Party Notice, then RPI may purchase the
quantity so offered from the third party and the amounts of such
Products purchased shall be construed as falling within the amounts
of Products to be delivered according to the Product Minimum
referred to in Clause 7.1. RPI shall not be obliged to divulge the
identity of such third party, but at the request of AVECIA shall in
lieu provide satisfactory evidence, signed by an independent notary
public certifying the genuineness of the competitive offer.
7.10 Non-use of RPI's Intellectual Property. Other than as provided in
--------------------------------------
this Agreement, AVECIA agrees that it will not use for its internal
purpose or for third parties any Intellectual Property of RPI
(whether pre-existing Intellectual Property under Clause 6.1 above
or Intellectual Property arising as a result of this Agreement under
Clause 6.2(b) above) or Confidential Information acquired under this
Agreement.
S-13
<PAGE>
8. Quality of the Product
----------------------
8.1 The Product manufactured and delivered by AVECIA to RPI under Clause 7
above shall conform to the Product Specification for such Product.
8.2 RPI shall examine all Product delivered to it pursuant to this
Agreement in accordance with the methods of analysis set out in the
Quality Agreement for such Product. RPI shall notify AVECIA of any
failure of the Product to meet the Product Specification within [ * ]
days of receipt of the relevant Product. RPI shall be entitled to
reject any Product which does not meet the Product Specification
("Rejected Product")
8.3 (a) RPI will return any Rejected Product to AVECIA and, if AVECIA
agrees with RPI's notification of failure, AVECIA shall replace
the Rejected Product at no additional cost to RPI within [ * ]
days of receiving notice from RPI under Clause 8.2 or on a new
delivery date as mutually agreed to in writing by the Parties.
(b) In the event AVECIA is unable to replace the Rejected Product
within such time, RPI shall be entitled to exercise its Standby
Rights (as set out in Clause 9.1 below) to enable RPI or a
Nominated Manufacturer to manufacture sufficient Product to
replace the Rejected Product, and AVECIA, subject to Clause 12,
agrees to make a good faith effort to provide, at no cost to RPI
or to a Nominated Manufacturer, the technical information
necessary for such manufacture of the Product. In addition,
AVECIA will reimburse to RPI that element of the reasonable cost
of the Product manufactured by the Nominated Manufacturer which
is in excess of the price which RPI would have had to pay to
AVECIA. The amounts of such Products manufactured by the
Nominated Manufacturer shall be construed as falling within the
amounts of Product to be purchased by RPI in accordance with the
Product Minimum in Clause 7.1 above.
(c) If AVECIA disagrees with RPI's notification of failure the JRC
shall consider the matter and in the event no agreement is then
reached, the parties shall jointly appoint an expert to determine
whether the Product is a Rejected Product, and the costs and fees
of the expert shall be borne by the losing party. During the
period of dispute resolution under this Clause 8.3(c):-
(i) If RPI requests AVECIA to resynthesise the quantity of the
Rejected Product, AVECIA shall in good faith resynthesise
the
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<PAGE>
Product and deliver it to RPI within [ * ] of receiving
such a request from RPI. Subject to Clause 8, RPI will
make payment for the resynthesised quantity within [ * ]
of delivery. If the dispute is resolved in favour of
AVECIA, RPI agrees to purchase from AVECIA both batches of
the Product, and such additional quantity of the Product
resynthesised by AVECIA shall not count towards the
Product Minimum. If the dispute is resolved in favour of
RPI, RPI will make payment only for the resynthesised
Product.
(ii) In the event AVECIA is unable to replace the Rejected
Product within the time stated in Clause 8.3(c)(i) above,
RPI shall be entitled to exercise its Standby Rights (as
set out in Clause 9.1 below) to enable RPI or a Nominated
Manufacturer to manufacture sufficient Product to replace
the Rejected Product, and AVECIA, subject to Clause 12,
agrees (i) to make a good faith effort to provide to RPI
or to a Nominated Manufacturer, at RPI's cost, the
technical information necessary for such manufacture of
the Product; and (ii) to grant to RPI or a Nominated
Manufacturer a personal, royalty free licence under
AVECIA's relevant Intellectual Property to enable RPI or
such Nominated Manufacturer to undertake such manufacture.
If the dispute is resolved in favour of AVECIA, RPI agrees
to purchase from AVECIA the entire amount of the Product
in dispute and to make immediate payment, and any
additional quantity of the Product manufactured by RPI or
its Nominated Manufacturer shall not count toward the
Product Minimum. If the dispute is resolved in favour of
RPI, AVECIA will reimburse to RPI that element of the
reasonable cost of the Product manufactured by the
Nominated Manufacturer which is in excess of the price
which RPI would have had to pay to AVECIA, together with
any costs paid by RPI in respect of the transfer of the
technical information by AVECIA, and the originally
ordered quantity of the Product shall be construed as
falling within the amount of Product to be purchased by
RPI in accordance with the Product Minimum.
(iii) If RPI does not request AVECIA to resynthesise the
Rejected Product, then AVECIA shall not be required to
start the resynthesis until the dispute is resolved or
until RPI make such a request, whichever is the sooner.
For the avoidance of doubt, no act or omission of RPI
under this Sub-clause 8.3(c)(iii) shall cause the Product
Minimum to be reduced by the amount of the Rejected
Product.
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<PAGE>
8.4 In the absence of notification that the Product does not meet the
Product Specification within the period set out in Clause 8.1 above,
the relevant consignment of the Product shall be deemed to have been
accepted by RPI in full compliance with the Product Specification.
9. Licence under AVECIA Intellectual Property to Manufacture the Product
---------------------------------------------------------------------
9.1 If AVECIA is unable to meet the delivery requirements set out in the
Delivery Schedule agreed under Clause 7.3 above, then subject to
Clause 12, AVECIA shall grant to RPI or a Nominated Manufacturer a
personal licence on reasonable commercial terms under AVECIA's
relevant Intellectual Property to enable RPI or such Nominated
Manufacturer to undertake the manufacture of Products, in order to
satisfy its requirements for Products ("Standby Rights"). In the
event that RPI wishes to exercise its Standby Rights, RPI will provide
Avecia with written notice thereof in advance of such exercise and,
subject to Clause 8, the volume of products manufactured under the
Standby Rights will be subtracted from the Product Minimum.
9.2 Manufacture of Products in excess of Product Minimum. In the event
----------------------------------------------------
that RPI's requirements for delivery of the Product over the period
from 1/st/ January 2000 to 31/st/ December 2002, as set out in the
Delivery Schedule, are in excess of the Product Minimum, then provided
that RPI shall purchase the greater of the Product Minimum or [ * ] of
its total requirements for delivery of the Product from AVECIA, RPI
shall have the ability to exercise its Standby Rights for manufacture
of the balance of the Product required during such period. AVECIA, at
its cost, shall have the right to have an independent third party
certify RPI's delivery requirements each twelve months within the
above said period, subject to Clause 12.
9.3 Any royalty payable under the licence granted as a result of the
exercise of the Standby Rights shall be dependent upon the volume of
Products to be manufactured by AVECIA on behalf of RPI and shall not
exceed [ * ]of the selling price of Products made by such a Nominated
Manufacturer. Neither RPI nor the Nominated Manufacturer, shall be
obligated to make any payments to AVECIA for the exercise of Standby
Rights pursuant to Clause 7.6 or pursuant to Clause 8.3 unless the
dispute is resolved in AVECIA's favour.
9.4 Without prejudice to Clause 13.5, upon the expiry or termination of
this Agreement, RPI may request a licence under AVECIA's Intellectual
Property, and the parties will negotiate in good faith the commercial
terms of such royalty bearing licence.
PART IV - GENERAL TERMS
-----------------------
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<PAGE>
10. Quality Agreements
------------------
AVECIA and RPI shall enter into a quality agreement in respect of each
Product on a case by case basis, the terms of which shall be agreed by the
JRC prior to manufacture and supply of each Product.
11. Warranties, Liability and Indemnity
-----------------------------------
11.1 Intellectual Property Warranty and Indemnity
--------------------------------------------
(a) Each party warrants to the other that:
(i) it has the necessary right and authority to enter into this
Agreement and that to the best of its knowledge at the date
of this Agreement it is the rightful owner or licensee of
all of its Intellectual Property; and
(ii) to the best of its knowledge at the date of this Agreement,
the use of Intellectual Property made available by it to the
other party pursuant to this Agreement for the purposes set
out in this Agreement will not infringe the Intellectual
Property of a third party.
(b) Subject to Clause 11.5, each party ("the Indemnifying Party")
will indemnify and hold harmless the other ("the Indemnified
Party") against any and all liability, loss, damages, costs,
legal costs, professional and other expenses whatsoever incurred
or suffered by Indemnified Party in respect of any claim or
action that the use of the Indemnifying Party's Intellectual
Property by the Indemnified Party in its performance of this
Agreement infringes the Intellectual Property of any third party
(an "Intellectual Property Infringement") provided that the
Indemnified Party:
(i) gives notice to the Indemnifying Party of any Intellectual
Property Infringement forthwith on becoming aware of the
same;
(ii) gives the Indemnifying Party the sole conduct of the defence
to any claim or action in respect of Intellectual Property
Infringement and does not at any time admit liability or
otherwise settle or compromise or attempt to settle or
compromise the said claim or action except upon the express
instructions of the Indemnifying Party; and
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<PAGE>
(iii) acts in accordance with the reasonable instructions of the
Indemnifying Party and gives the Indemnifying Party such
assistance as it shall reasonably require in respect of
the conduct of such defence.
11.2 Liability for the Products. Liability in respect of any Product
--------------------------
delivered to RPI and not rejected by RPI within the period set out in
Clause 8.2 above (including, without limitation, the use to which it
is put) following delivery to RPI of such Product shall rest solely
on RPI and RPI shall indemnify AVECIA against any liability, loss,
damages, costs, legal costs, professional and other expenses
whatsoever incurred or suffered by AVECIA arising out of or in
respect of such Product following its delivery to RPI including,
without limitation, RPI's use of the Product following delivery.
11.3 Liability for Manufacture of the Products. Liability in respect of
-----------------------------------------
manufacture of the Products, whether by use or operation of the
Process (or any part of the Process) or otherwise, by RPI or by a
Nominated manufacturer on behalf of RPI shall rest solely on RPI. RPI
shall indemnify AVECIA against any liability, loss, damages, costs,
legal costs, professional and other expenses whatsoever incurred or
suffered by AVECIA arising out of or in respect of manufacture of the
Products, whether use or operation of the Process (or any part of the
Process) or otherwise by RPI or by a Nominated Manufacturer on behalf
of RPI.
11.4 Limit on AVECIA's Liability. Subject to the unlimited liability
---------------------------
provisions of Clause 11.1, AVECIA's total liability (whether for
breach of contract, negligence, breach of statutory duty and/or other
tort, or otherwise):
(a) in connection with or as a result of the work carried out during
the Programme shall be limited to the aggregate amount received
by AVECIA from RPI under this Agreement at the time such
liability arises; or
(b) in connection with the manufacture of the Product pursuant to
Part III of this Agreement shall in no event exceed the purchase
price paid by RPI for the ordered quantity of Product in respect
of which the claim is made or liability has arisen.
11.5 No liability for consequential loss. Neither party shall be liable to
-----------------------------------
the other for any indirect, consequential or special loss, loss of
profits or damage howsoever arising.
11.6 No exclusion of liability for personal injury. Nothing in this
---------------------------------------------
Agreement shall remove or limit the liability of either party in
respect of death or personal
S-18
<PAGE>
injury arising out of the negligence or wilful default of that party
its servants or agents.
12. Confidentiality
---------------
12.1 In consideration of the Disclosing Party disclosing the Confidential
Information to the Receiving Party, the Receiving Party hereby
undertakes to maintain confidential all such Confidential Information
and it will accordingly not directly or indirectly disclose any of
the Confidential Information in whole or in part, other than under
Clause 12.4 below. For the purposes of this Clause 12, Intellectual
Property arising from the Programme and in the possession of a party
shall be treated as having been disclosed to that party by the party
owning such Intellectual Property pursuant to Clause 6.2 above, and
the expressions "Disclosing Party" and "Receiving Party" shall be
construed accordingly.
12.2 The foregoing restrictions on the Receiving Party shall not apply to
any Confidential Information which:
(a) the Receiving Party can prove was already in its possession and
at its free disposal before the disclosure hereunder to it;
(b) is hereafter disclosed to, purchased or otherwise legally
acquired by the Receiving Party by or from a third party who has
not derived it directly or indirectly from the Disclosing Party;
(c) is or becomes available to the public whether in printed
publications or otherwise through no act or default on the part
of the Receiving Party or its agents or employees; or
(d) the Receiving Party can prove to the reasonable satisfaction of
the Disclosing Party has been developed independently of the
Programme by any employee of the Receiving Party without
reference to any of the Confidential Information disclosed by
the Disclosing Party.
12.3 In order to secure the obligations set out in this Clause 12 the
Receiving Party agrees to exercise every reasonable precaution to
prevent and restrain the unauthorised disclosure and use of
information subject to confidentiality, including restricting access
to such information to such of its employees as are bound to keep
such information confidential and need to have such access for the
purpose of this Agreement.
12.4 The Receiving Party may disclose Confidential Information: (i) in the
case of AVECIA to Avecia Inc., 1405 Foulk Road, PO Box 15457,
Wilmington, DE 19850-5457 and to Boston Biosystems Inc. of 75A
Wiggins Avenue, Bedford,
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<PAGE>
Massachusetts; and (ii) in the case of RPI to its Nominated
Manufacturer(s) (each a "Permitted Recipient"), provided that the
Receiving Party shall procure that prior to such disclosure each
Permitted Recipient to which Confidential Information is to be
disclosed is made aware of the obligations contained in this
Agreement and enters into confidentiality obligations in
substantially the same terms as those contained in this Agreement
directly with the Disclosing Party.
12.5 The provisions of this Clause 12 shall survive termination or expiry
of this Agreement and shall continue for a period of 10 years from
the date of that termination or expiry.
12.6 The parties shall remain bound by the obligations in the Mutual
Confidentiality Agreement signed by them and dated 23/rd/ December
1998, but in the event of any conflict between the terms of that
Mutual Confidentiality Agreement and the terms of this Agreement, the
latter shall prevail.
13. Duration and Termination
------------------------
13.1 Duration. This Agreement and the Programme shall be deemed to have
--------
commenced on the Effective Date and shall continue (unless terminated
in accordance with the provisions of Clauses 13.2, 13.3, 13.4 or 21)
until the expiry of the period of three years from the date of
commencement of manufacture of the Product pursuant to Part III of
this Agreement following completion of the Programme.
13.2 (A) Termination by mutual agreement. Subject to Clause 13.5 below,
-------------------------------
this Agreement may be terminated by mutual agreement at any time
prior to completion of the Programme in the event that both
parties agree that the Programme is not technically feasible.
(B) Termination for technical non-feasibility. Subject to Clause 13.5
below, this Agreement may be terminated by either party on or
after 1 January 2001 if it has not been agreed that the Programme
is technically feasible in respect of the Product Specification,
quantity and timeframe.
13.3 Termination by RPI. Subject to Clause 13.5 below, RPI may terminate
------------------
this Agreement in the following ways:
(a) by [ * ] written notice to AVECIA if RPI is unable to, or
elects not to, pursue development of any of the Products;
(b) forthwith upon written notice if Avecia has been unable to
deliver the Product within [ * ] of the date for delivery
of such Product specified in the Delivery Schedule or, in
respect of the kilogramme of the Product
S-20
<PAGE>
ordered under the Programme, on or before [ * ] for reasons
not relating to technical feasibility as referred to in
Clauses 13.2(A) and 13.2(B)
(c) forthwith if AVECIA is in breach of this Agreement (other
than under Clause 13.3(b) above) and AVECIA does not
rectify such breach within [ * ] of receipt of written
notice from RPI requiring rectification of the breach,
provided that it is intended that the parties will discuss
any alleged breach and its remediation as soon as it is
known; or
(d) forthwith upon written notice if AVECIA has a liquidator,
receiver, manager receiver or administrator appointed, or
ceases to continue trading or is unable to pay debts as
defined in Section 227 of the Insolvency Act 1986 (England
and Wales).
13.4 Termination by AVECIA. Subject to Clause 13.5 below, AVECIA may
---------------------
terminate this Agreement in the following ways:
(a) forthwith if RPI is in breach of this Agreement (other than
under Clause 13.3(b) above) and RPI does not rectify such
breach within [ * ] of receipt of written notice from
AVECIA requiring rectification of the breach, provided that
it is intended that the parties will discuss any alleged
breach and its remediation as soon as it is known; or
(b) forthwith upon written notice if RPI has a liquidator,
receiver, manager receiver or administrator appointed, or
ceases to continue trading or is unable to pay debts as
defined in Section 227 of the Insolvency Act 1986 (England
and Wales), or equivalent occurs in the USA or any other
jurisdiction in which RPI is incorporated or resident.
13.5 Consequences of Termination. Termination under Clauses 13.2 -
---------------------------
13.4 above shall have one or more of the following consequences
according to the table set out below:
A RPI shall pay to AVECIA all sums payable up to the date of
termination but not yet paid, together with all reasonable
costs already incurred by AVECIA at the date of termination
or costs incurred by AVECIA after termination which could
not reasonably be avoided.
B The parties shall agree upon a sum payable by RPI in
respect of work done by AVECIA under the Programme for
which monies have not yet become payable under Clause 3
above and in the absence of agreement upon such sum the
provisions of Clause 26 shall apply.
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<PAGE>
C Any moneys paid by RPI to AVECIA up to the date of
termination shall be non-refundable, subject to D below
where applicable.
D Termination of this Agreement prior to the commencement of
Stage 3 of the Programme can only take place if agreed by
the JRC. In such event, AVECIA shall reimburse to RPI
within 30 days of the date of termination, a proportion of
the [ * ]received from RPI under Clause 3(a) as follows:
(i) termination prior to completion of Stage 1 - [ * ]
(ii) termination between Stages 1 and 2 - [ * ]; or
(iii) termination between Stages 2 and 3 - [ * ]
E AVECIA shall grant to RPI or a Nominated Manufacturer (at
RPI's option), a royalty-free, non-exclusive world-wide
licence under AVECIA's Intellectual Property including any
AVECIA Invention arising under Clause 6.2(d) above
necessary for RPI or a Nominated Manufacturer (at RPI's
option) to manufacture Products identified for manufacture
under this Agreement Any such licence granted under this
Clause 13.5(E) shall expire at such time asa quantity of
Product is manufactured which fulfills the Product Minimum
requirement in Clause 7.1, plus any amount ordered by RPI
and accepted by AVECIA, and in this respect RPI will
provide, or procure its Nominated Manufacturer to provide,
all necessary manufacturing information and records to
Avecia:
F Any licence granted under Clauses 6.3, 9.1 or 9.2 shall
terminate.
G RPI shall purchase all quantities of Product ordered by RPI
and manufactured by AVECIA but not yet delivered to RPI,
including any quantity of Product held by AVECIA pursuant
to Clause 5.1(a), at the price agreed under Clause 7.2
above.
Termination Clauses and Consequences
Clause Consequences
------ ------------
Clause 13.2 A [ * ]
Clause 13.2B [ * ]
Clause 13.3 (a) [ * ]
Clause 13.3 (b) [ * ]
Clause 13.3 (c) [ * ]
Clause 13.3 (d) [ * ]
Clause 13.4 (a) [ * ]
Clause 13.4 (b) [ * ]
* In the event of termination under Clause 13.2 , the amount to
be paid to AVECIA shall not exceed [ * ]
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<PAGE>
** In the event of termination under Clause 13.2 only, the
amount to be repaid by AVECIA to RPI shall be limited to
[ * ] of the [ * ] received from RPI under Clause 3(a)
irrespective of the Stage in the Programme at which
termination takes effect.
*** In the event of termination under Clause 13.3(a) only, the
amount payable by RPI to AVECIA under Clause 13.5 A for costs
incurred by AVECIA after termination which could not
reasonably be avoided, shall not exceed [ * ]
13.6 Termination or expiry of this Agreement, for whatever reason,
shall not prejudice the acquired rights of either party.
13.7 For the avoidance of doubt, it shall not be considered a breach
of this Agreement if an objective of the Programme is not
achieved so long as AVECIA uses all reasonable commercial
endeavours to perform its obligations.
13.8 The provisions of Clauses 3, 6.2, 6.4, 6.5, 9, 11, 12, 13.7 - 26
shall survive the termination or expiry of this Agreement. In the
event that RPI or any Nominated Manufacturer breaches any of the
surviving clauses of this Agreement, any licence granted as a
result of the operation of consequence E under Clause 13.5 above
shall terminate.
14. Payment
-------
All amounts payable to AVECIA under this Agreement shall be paid in US
Dollars in accordance with the following details:-
[ * ]
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<PAGE>
15. Announcements And Publicity
---------------------------
15.1 Subject to Clause 15.2, the parties agree that neither of them
will make any official press release, announcement or other
formal publicity relating to the transactions which are the
subject of this Agreement, or any ancillary matter, including
without limitation use the name of the other in any form of
advertising or public promotion, without first obtaining in each
case the prior written consent of the other party (which consent
will not be unreasonably withheld), except as required by law.
15.2 The parties agree that any publication, abstract or patent
application resulting from this Agreement will be sent to the
other at least 60 days prior to filing or submission for prior
approval. The authorship on any publication and/or abstract will
be based on mutual agreement between the parties or as deemed
scientifically appropriate. A publication resulting from this
Agreementwill be delayed or prohibited if, in the reasonable
opinion of the other party, it will be necessary to delay or
prohibit such publication in order to file or procure patent
application or rights protection in respect of any invention or
discovery arising from this Agreement.Notwithstanding the
foregoing, AVECIA shall have no right to publish or disclose to a
third party, any information relating to the Products without the
prior written permission of RPIunless such information falls
within any of the exceptions in Clause 12.2.
16. Assignment and Transfer
-----------------------
16.1 This Agreement shall inure to the benefit of, and be binding
upon, the successors and assignees of the parties. This Agreement
may not be assigned or transferred by either of the parties
hereto without the prior written consent of the other, which will
not be unreasonably withheld; provided, however, that either
party may assign or transfer its rights and obligations under
this Agreement to an affiliate of that party or a successor to
all or substantially all of its assets or business relating to
this Agreement, whether by sale, merger, operation of law or
otherwise by giving written notice to the other party.
16.2 AVECIA may transfer this Agreement to any entity which AVECIA may
establish to undertake its contract manufacturing of Product,
provided that AVECIA owns or controls at least 50% of the voting
stock of such entity and such transfer is pre-approved by RPI.
17. Variation
---------
No variation or amendment of this Agreement shall bind either party unless
made in writing in the English language and agreed to in writing by duly
authorised officers of both parties.
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<PAGE>
18. Illegality
----------
If any provision of this Agreement is agreed by the parties to be illegal
void or unenforceable under any law that is applicable hereto or if any
court of competent jurisdiction in a final decision so determines, this
Agreement shall continue in force save that such provision shall be deemed
to be excised herefrom with effect from the date of such agreement or
decision or such earlier date as the parties may agree.
19. Waiver
------
A failure by either party hereto to exercise or enforce any rights
conferred upon it by this Agreement shall not be deemed to be a waiver of
any such rights or operate so as to bar the exercise or enforcement thereof
at any subsequent time or times.
20. Notices
-------
20.1 All notices, instructions and other communications given hereunder
or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered
or certified mail, return receipt requested, postage prepaid, or
(ii) via a reputable nationwide overnight courier service, in each
case to the address set forth below. Any such notice, instruction or
communication shall be deemed to have been delivered upon receipt.
If made to RPI, all notices shall be addressed to:
Ribozyme Pharmaceuticals, Inc.
2950 Wilderness Place
Boulder, CO 80301
Attention: Vice President Corporate Development
Tel: (303) 449-6500
Fax: (303) 449-6995
with a copy to:
Rothgerber, Johnson and Lyons
1200 17th Street, Suite 3000
Denver, CO 80202
Attention: Herbert H. Davis III, Esq.
Tel: (303) 623-9000
Fax: (303) 623-9222
If made to AVECIA, all notices shall be addressed to:
Avecia Limited
Hexagon House
Blackley, Manchester, M9 8ZS
Attention: Vice-President, LifeScience Molecules
Business
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<PAGE>
Tel: 0161 721 2404
Fax: 0161 721 5202
with a copy to:
Legal Affairs Department
Avecia Limited
Hexagon House
Blackley, Manchester, M9 8ZS
Attention: Company Secretary
Tel: 0161 721 1217
Fax: 0161 721 1886
or, in each case, to such other address as may be specified in
writing to the other parties.
20.2 Any party may give any notice, instruction or communication in
connection with this Agreement using any other means (including
personal delivery, telecopy or ordinary mail), but no such notice,
instruction or communication shall be deemed to have been delivered
unless and until it is actually received by the party to whom it was
sent. Any party may change the address to which notices,
instructions or communications are to be delivered by giving the
other parties to this Agreement notice thereof in the manner set
forth in this Clause 20.
21. Force Majeure
-------------
Neither party shall be liable to the other party in any manner whatsoever
for any failure or delay in performing its obligations under this Agreement
if and to the extent, and for the duration, that such is due to force
majeure, which expression for the purposes of this Agreement means any
cause beyond the reasonable control of the party in question which for the
avoidance of doubt and without prejudice to the generality of the
foregoing shall include governmental actions, war, riots, civil commotion,
fire, flood, epidemic, labour disputes (excluding labour disputes involving
the work force or any part thereof of the party in question, restraints or
delays affecting shipping or carriers, inability or delay in obtaining
supplies of adequate or suitable materials and act of God. Without
prejudice to Clause 13.1, any said failure or delay shall not give either
party the right to terminate this Agreement except, and to the extent that
such force majeure continues for a period exceeding three months.
Termination as a result of Force Majeure shall give rise to consequences
[ * ] as set out in the table at Clause 13.5.
22. Good Faith and Duty to Mitigate
-------------------------------
22.1 Each of the parties shall at all times act in good faith in carrying
out the terms of this Agreement.
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<PAGE>
22.2 Each of the parties shall use all reasonable endeavours to mitigate
any costs, losses or expenses due to be incurred or suffered by the
other party in connection with the performance or non-performance of
this Agreement.
23. Further Assurances
------------------
At any time or from time to time on and after the Effective Date,
each of AVECIA and RPI shall at the request, cost and expense of
the other:
(a) deliver to the other such records, data or other documents
consistent with the provisions of this Agreement;
(b) execute, and deliver or cause to be delivered, all such
assignments, consents, documents or further instruments of
transfer or licence required by this Agreement; and
(c) take or cause to be taken all such other actions, as may
reasonably be deemed necessary or desirable in order to obtain
the full benefits of this Agreement and the transactions
contemplated hereby.
24. Maintenance of Records and Right to Inspect Manufacturing
---------------------------------------------------------
24.1 AVECIA agrees to maintain good records of sufficient detail to
allow the critical examination of all the data and the analysis
documentation in a form that is Food and Drug Administration
compliant (collectively, "Records"). Records, including those
associated with lots produced, must be kept and maintained
safely for at least two (2) years by AVECIA. Prior to disposal
of these Records, AVECIA agrees to give RPI the option of
transferring the Records and their use to RPI. If AVECIA is no
longer in the contract oligonucleotide synthesis business, then
RPI shall have the right to immediately obtain and use all
Records including the Drug Master File related to the
production of the Product covered by this Agreement.
24.2 Upon RPI's written request, AVECIA will allow RPI and/or its
Collaborator(s) to review its GMP processes and procedures as
such processes relate to bulk drug and the preparation of
Product. Such audit shall be subject to the confidentiality
provisions of Clause 12. Such reviews shall occur as soon as
reasonably practical. RPI and/or its Collaborator(s) shall have
the right to inspect all manufacturing and testing facilities
and operations (including third parties) to assure compliance
with GMP requirements and regulatory commitments. AVECIA will
assure compliance with regulatory commitments and will correct
any deficiencies prior to manufacturing of any Product
contemplated under this Agreement, subject to any provisions
set out in the Technical Agreement or any Quality Agreement.
AVECIA will promptly
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<PAGE>
notify RPI of any regulatory inspections and
inquiry/communications which involve a Product and give RPI an
opportunity to assist AVECIA in responding to any such
inquires.
25. Entire Agreement
----------------
25.1 This Agreement contains the entire agreement between the parties
and supersedes any previous agreements relating to this
Agreement and any understandings between the parties with
respect thereto, and may not be modified except by an instrument
in writing signed by the duly authorised representatives of the
parties.
25.2 In the event of any conflict between the Agreement and the
Schedules, then the former takes precedence .
26. Law and Jurisdiction
--------------------
26.1 This Agreement is governed by and shall be construed and
interpreted in accordance with the laws of the US State of
Delaware.
26.2 The parties shall meet as soon as possible to discuss and to
attempt to resolve all matters not specifically provided for in
this Agreement or in the constitution of the JRC and which
require a decision and all differences, disputes or
disagreements which may arise out of or in connection with this
Agreement or the JRC. If the parties are unable to resolve any
such matter or dispute then it shall be referred to the Vice-
President, Life Science Molecules business and the RPI Vice
President Corporate Development, who shall meet within thirty
(30) days of being requested to do so and shall in good faith
attempt to resolve the matter or dispute.
26.3 The parties agree to refer any matter or dispute which is not
able to be resolved pursuant to Clause 26.2 to the Centre for
Dispute Resolution ("CEDR") in London, England in an attempt to
settle the same in good faith by Alternative Dispute Resolution
("ADR"). The site for ADR shall be London, England, if initiated
by RPI and Boulder, Colorado, if initiated by Avecia.
26.4 Neither of the parties shall be deemed to be precluded from
taking such interim formal steps as may be considered necessary
to protect such party's position while the procedures referred
to in Clauses 26.2 and 26.3 are pursued.
26.5 In the event that the matter or dispute remains unresolved by
such ADR procedure within thirty days of commencement of such
procedure, then the parties shall be at liberty to take such
other proceedings (as defined below) as they think fit.
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<PAGE>
26.6 Except as provided for in Clauses 26.2, 26.3 and 26.4, in
relation to any legal action or proceedings to enforce this
Agreement or arising out of in connection with this Agreement
("proceedings") each of the parties irrevocably submits to the
exclusive jurisdiction of the Delaware Courts if initiated by
RPI and Denver Courts if initiated by Avecia .
27. Counterparts
------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same instrument.
28. Independent Contractor
----------------------
Nothing in this Agreement shall create, or be deemed to create, a
partnership or the relationship of principal and agent or employer and
employee between the parties. Each party agrees to perform under this
Agreement solely as an independent contractor.
29. Representation by Counsel. The parties acknowledge that each of them
-------------------------
has been represented by counsel in connection with the negotiation and
drafting of this Agreement and that no rule of strict construction
should be applied to either of them as the drafter of all or any part
of this Agreement.
S-29
<PAGE>
IN WITNESS whereof, the authorised representatives of the parties have executed
this Agreement on the date first above written.
SIGNED for and on behalf of AVECIA LIMITED
Signature .........................
Name .........................
Position .........................
SIGNED for and on behalf of RIBOZYME PHARMACEUTICALS INCORPORATED
Signature .........................
Name Alene Holzman
Position Vice President, Corporate Development.
S-30
<PAGE>
SCHEDULE 1
----------
The Programme
-------------
PROPOSAL
PROCESS SCALE UP and GMP MANUFACTURE of OLIGONUCLEOTIDE
Angiozyme
for
Ribozyme Pharmaceutical Inc.
Date Prepared: December 1999
Proposal No: PP.050 Version 3
Author: John C. Krukiel, Commercial Development Manager
ABBREVIATIONS
If needed
S-1
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
PAGE
<S> <C> <C>
1. Project Objective 4
2. Project Scope 4
3. Molecule Description 4
4. Project Plan 5
4.1 Technology Transfer of Process and Analytical Methods
4.2 Process Development - Deprotection and Purification scale up of Products
as determined by the JRC.
4.3 Preparation of GMP Manufacturing Documentation
4.4 Process Scale Up - GMP Manufacture of Kilo 1 mutually agreed
Product.
5. Summary Reports / Regulatory Submission 8
5.1 Preparation of Development Reports
5.2 of documentation
6. Packaging and Despatch 8
Appendix 1. Technology Transfer Plan including Oligo Pilot II production 9
Appendix 2. Provisional Product Specifications 10
Appendix 3. Development Quality Standard 11
Appendix 3.2 GMP Quality Standard 12
Appendix 4 Draft Quality Agreement 13
</TABLE>
S-2
<PAGE>
1. PROJECT OBJECTIVE
This proposal describes technology transfer, process development, process scale
up and manufacture of 1 kg of mutually agreed product.
The data generated from the technology transfer and scale up program is meant to
provide a degree of assurance that the process detailed in the Batch
Manufacturing Instructions will produce product suitable for use in clinical
trials.
The sequence of the oligonucleotide is described below.
2. PROJECT SCOPE
The project will consist of five stages:
* Technology Transfer of Process and Analytical Methods
* Process Development - Deprotection and Purification scale up of the ribozyme
* products as determined by the JRC
* Preparation of GMP Manufacture Documentation
* Process Scale Up - GMP Manufacture of Kilo 1 of a mutually agreed product
Prior to the start of the project and bi-weekly following initiation, a joint
review committee(JRC) composed of members from RPI and Avecia LSM will meet. A
full review of all work completed will be presented, the project plan and
specifications reviewed, and project progression agreed.
Throughout the project any changes made to the work detailed in the proposal
will be jointly agreed with RPI, managed and documented in accordance with
Avecia LSM's project management procedures.
Stability studies are not currently within the scope of this project. If
required they will be the subject of a separate quotation.
3. MOLECULE DESCRIPTION:
The oligonucleotide product is classified as Active Pharmaceutical Ingredient
"Ribozyme Sequence in Here"
Provisional Specifications listed in Appendix 2.
4. PROJECT PLAN
4.1 TECHNOLOGY TRANSFER OF PROCESS AND ANALYTICAL METHODS
RPI has generated experience in the manufacture of ribozymes and it is
recognised that this knowledge must be transferred to Avecia LSM manufacturing
personnel in order for the supply of products to commence. A Technology
transfer plan/agreement will be agreed. This document will detail the
activities, information requirement, success criteria and timetable for
technology transfer of the manufacturing process and the analytical methods.
It is anticipated that RPI will provide Avecia with the following information:
* Raw material suppliers, specifications and testing procedures
* RPI and [ * ] Process description and process equipment specifications
* Details of in-process tests and specifications
* Toxicological information on the oligonucleotide
* Analytical Methods(final product and intermediates) and supporting
documentation(reagent requirements, equipment etc.)
* Reference samples
S-3
<PAGE>
The Technology Transfer project will be conducted in four phases:
* Information transfer and definition of Initial process
* Analytical methods technical transfer at Avecia LSM
* Oligo Pilot II production of development material at Avecia LSM, utilising
RPI's current process parameters
* Technical clearance to manufacture
- --------------------------------------------------------------------------------
Time Requirement [ * ]
- --------------------------------------------------------------------------------
Quality Standard Development (Appendix 3)
- --------------------------------------------------------------------------------
Facility Multi Use Development Facility-Grangemouth
- --------------------------------------------------------------------------------
4.2 PROCESS DEVELOPMENT - DEPROTECTION AND PURIFICATION
SCALE UP OF THE PRODUCTS AS DETERMINED BY THE JRC.
Deprotection
The aim of this stage is to evaluate the deprotection process and provide a
recommended route for the large scale GMP manufacture in the form of a Process
Description.
The Deprotection process development will start with a full review and analysis
of samples and records generated during the technology transfer stage.
Conditions will be defined which provide material of the appropriate purity in a
reproducible manner.
During large scale manufacture there will be opportunities to further
investigate the cleavage mixture, time course and reaction temperature.
Purification
The aim of this stage is to evaluate the purification process and provide a
recommended route for the large scale GMP manufacture in the form of a Process
Description.
The Purification process development will start with a full review and analysis
of samples and records generated during the technology transfer stage.
Procedures to ensure consistent column loading will be defined. Chromatography
gradient and flow rate will be further investigated.
Samples obtained from the OPII production runs at Avecia LSM will be utilised
to gain full understanding of the purification parameters. The material will be
loaded on small scale Biotage rig, with a view of extrapolating the data to the
large scale Biotage rig in the Grangemouth Pharmaceutical Manufacturing
Facility.
These investigations will have the following objectives:
* Define procedures to ensure consistent column loading
* Investigate the impact of variation in column gradient and flow rate
* investigate impact of increased column loading, with a view to increasing
throughput
- --------------------------------------------------------------------------------
Time Requirement [ * ]
- --------------------------------------------------------------------------------
Quality Standard Development (Appendix 3)
- --------------------------------------------------------------------------------
Facility Multi Use Development Facility-Grangemouth
- --------------------------------------------------------------------------------
S-4
<PAGE>
4.3 PREPARATION OF GMP BATCH MANUFACTURING
DOCUMENTATION
Product specific Process Instructions (provisional Batch Manufacturing
Instructions) for oligonucleotide product will be written based on the work
carried out during the scale up studies.
- --------------------------------------------------------------------------------
Time Requirement [ * ]
- --------------------------------------------------------------------------------
4.4 PROCESS SCALE UP - GMP MANUFACTURE OF KILO 1 MUTUALLY AGREED PRODUCT.
Avecia LSM will carry out the GMP manufacture of mutually agreed Product at the
range of [ * ] on the Oligo Process. The objective of the scale up program
is to demonstrate the process described in the process description produces
material of the required quality and specification.
Avecia LSM will manufacture the scale up batches to the agreed specification
using the Process instructions, material generated from this stage will be
suitable for use in toxicology and human clinical trials.
Avecia LSM will manufacture 1kg oligonucleotide to the agreed specification
following the Process Instructions and documented analytical methods.
The manufacture program following oligonucleotide assembly will proceed only if
there is agreement by the joint review committee that the process for
deprotection and purification, as detailed in the process instructions, can
operate efficiently at scales above [ * ]. If it is deemed that this
process is insufficient to produce the quality and quantity of oligonucleotide
product RPI require, than the decision will be made to continue scale up
development work.
Note: Further development may be required in the GMP phase, this work will be
documented and all changes subject to QA approval.
The Oligonucleotide will be supplied in a form agreed upon by both parties.
A Certificate of Analysis will be supplied.
Avecia LSM will retain a sample of product (exact amount to be agreed) for use
as retention material and in further analytical studies.
- --------------------------------------------------------------------------------
Time Requirement [ * ]
- --------------------------------------------------------------------------------
Quality Standard GMP (Appendix 3.2)
- --------------------------------------------------------------------------------
Facility Pharmaceutical Manufacturing Facility-Grangemouth
- --------------------------------------------------------------------------------
5. SUMMARY REPORTS / REGULATORY SUBMISSION
5.1 Preparation of Development Reports
Avecia LSM will compile interim reports at each stage of the process development
programme and following GMP manufacture.
The reports will be retained in the Avecia LSM QA Archives.
- --------------------------------------------------------------------------------
Time Requirement Within [ * ] weeks of each stage completion
- --------------------------------------------------------------------------------
S-5
<PAGE>
5.2 Preparation of Documentation
If required Avecia LSM will provide information to support RPI's regulatory
submissions.
- --------------------------------------------------------------------------------
Time Requirement [ * ]
- --------------------------------------------------------------------------------
6. PACKAGING AND DESPATCH
Specification of primary packaging of the oligonucleotide to be agreed.
7. COSTING
8. TIMELINES
S-6
<PAGE>
SCHEDULE 2
----------
Joint Review Committee (JRC)
----------------------------
1. Purpose
-------
1.1 The purpose of the JRC is to be responsible for co-ordinating and
supervising the implementation of the Programme.
1.2 The JRC is to assist in ensuring that lines of communications are
established and maintained between the parties and to this end shall be
responsible for nominating a representative in both parties who shall be
the main but not sole point of contact for the other party.
1.3 It shall be the responsibility of the JRC to circulate copies of all
reports and information that it receives from one party to the other
without delay.
1.4 The JRC is to be the primary arena for the settlement of any disagreements
between the parties relating to the interpretation and implementation of
the Programme.
2. Period of Existence
-------------------
The JRC shall remain in being until whichever is the earlier of the
completion of the Programme or the termination of the Agreement.
3. Membership
----------
3.1 The JRC shall have four members including the Chairman. Two members
including the Chairman shall be appointed in writing by AVECIA and two
members shall be appointed in writing by RPI.
3.2 It is envisaged that the members of the JRC appointed by each party shall
vary with regard to their particular disciplines dependent on the
particular stage reached in the Programme. Either party may invite further
representatives with appropriate skills to attend meetings of the JRC in a
non-voting capacity.
3.3 Either party may at any stage change a representative member on the JRC by
giving written notice of such change to the other party.
4. Meetings
--------
4.1 The initial meeting of the JRC shall take place within the period of sixty
(60) days following the date of this Agreement at AVECIA Grangemouth,
Scotland or RPI, Boulder.
4.2 Subsequent meetings of the JRC shall be held every two (2) months
alternating between Boulder, and Grangemouth, Scotland if not otherwise
agreed by the JRC.
4.3 If for any reason following the agreement of the Programme either party
wishes a meeting of the JRC to be held between the regular two (2) monthly
meetings, it may arrange such meeting on giving at least fifteen (15) days'
notice in writing to the other party, such meeting shall be held at the
offices of the party not requesting the meeting.
5. Procedure at Meetings
---------------------
5.1 The Chairman of the JRC shall be responsible for preparing and circulating
an agenda for any meeting of the JRC at least ten (10) days prior to the
meeting (which agenda shall include any item considered important by either
party) and appointing a secretary for such meeting, who need not be a
representative member of the Committee, who shall be responsible for the
preparation and circulation of minutes of the meeting within thirty (30)
days of the conclusion of such meeting.
S-7
<PAGE>
5.2 Any resolution put to the JRC must, to be passed, be accepted by at least
three (3) members of the JRC present in person.
5.3 Each representative of the JRC shall have one vote. The Chairman shall not
have a second or casting vote.
5.4 Any dispute which cannot be resolved by the JRC shall so far as it comes
within the ambit of section 1.4 above be dealt with according to the
provisions of such section, any other dispute shall be dealt with in
accordance with clause 26 of the Agreement.
6. Amendment to JRC Constitution
-----------------------------
6.1 The JRC may amend its rules set out herein provided that a resolution
amending such rules is circulated in writing thirty (30) days prior to the
meeting and such resolution is passed in accordance with Section 5.2.
S-8
<PAGE>
SCHEDULE 3
----------
Quality Agreement
-----------------
Draft QA Agreement
The attached agreement is a draft template which has yet to be discussed with
RPI's QA representatives. It's format and content may change as a result of
these discussions. It is included as part of this proposal to define the set of
assumptions that have been made in the preparation of this proposal.
S-9
<PAGE>
Avecia LSM
Quality Assurance Agreement between Avecia LSM and RPI for the Technology
Transfer and Manufacture of Angiozyme
Issued By: _____________________________________________
Avecia LSM QA Manager
Approved By: ______________________________________________
RPI Manufacturing Director
Approved By: ______________________________________________
RPI QA Director
Approved By: ______________________________________________
Avecia Grangemouth Works QA Manager
Approved By: ______________________________________________
Avecia LSM Commercial Manager
Revision Summary
S-10
<PAGE>
Contents
1. Introduction
2. Background information on Angiozyme
3. Responsible personnel
4. Communication
5. Technology Transfer
6. Quality Assurance
7. Purchasing, supply and testing of raw materials and packaging
8. Manufacturing Facility
9. Manufacture
10. Sampling, testing and release of bulk active pharmaceutical ingredient
11. Control and supply of samples
12. Transport and Distribution
13. Complaints and recall
14. Safety, Health and Environment
15. Stability
16. Validation
17. Subcontracting
18. Deviations and Change Control
19. Documentation and Archiving
20. Regulatory
S-11
<PAGE>
1. Introduction
The purpose of this agreement is to ensure that the responsibilities of RPI
and Avecia LifeScience Molecules in the Technology Transfer and subsequent
manufacture of Angiozyme are clearly defined. This is to ensure that
misunderstandings are avoided, which could lead to a product or work of
unsatisfactory quality.
The agreement will address the following:-
* Roles and responsibilities in ensuring that Avecia LSM complies with cGMP
and other relevant legislation.
* Responsibility for the release of Angiozyme active pharmaceutical
ingredient for further processing for use in humans.
* Agreement on access to Avecia LSM facilities for RPI's personnel.
* Arrangements for changes or amendments to aspects of this agreement.
Channels of communication.
* Supply of relevant information following a regulatory inspection, which
may impact on the continued supply of the product.
The agreement addresses the initial issues surrounding the technology
transfer of RPI's manufacturing process to Avecia LSM and then focuses on
the Quality Assurance issues surrounding the ongoing supply of Angiozyme to
GMP for human use.
2. Background information on Angiozyme
Angiozyme is a........
It will be supplied to RPI as a powder in bulk form and subsequently
formulated under the control of RPI.
It is currently in Phase .. clinical trials for the treatment of ..........
As the drug product progresses through clinical trials, it is the
responsibility of RPI to inform Avecia LSM and to initiate a joint review of
the contents of this technical agreement, to ensure that the quality
standards described within it still meet the requirements of the regulators.
Responsible Personnel
S-12
<PAGE>
<TABLE>
<CAPTION>
XXX Avecia
<S> <C> <C>
Commercial [ * ]
Technology Manager [ * ] [ * ]
Manufacturing Technology [ * ]
Transfer
Production [ * ]
Analytical Technology Transfer [ * ]
Analytical [ * ]
Quality Assurance [ * ] [ * ]
[ * ]
Facility and Plant Commissioning
[ * ]
Safety, Health and Environment
Regulatory [ * ] [ * ]
Document Controller [ * ] [ * ]
</TABLE>
4. Communication
S-13
<PAGE>
The commercial representatives of each company will be informed of supply or
receipt of documents and of the occurrence of meetings or visits.
4.1 Documents
The document control representatives from each company will be responsible
for the supply or receipt of documents.
All inter-company document transfers will be logged.
The document controller in receipt of a document will formally acknowledge
receipt.
The document controller shall maintain a centralised archive of all
documents received, with copies disseminated to appropriate team members in
a controlled manner.
All documents will be numbered and, if appropriate, version controlled.
The document controller will be responsible for recalling documents that
have been replaced with new versions.
4.2 Review meetings
Meetings should be held between functional nominees as appropriate to ensure
smooth transfer of information and progress on actions.
5. Technology Transfer
The manufacturing and analytical Technology transfer activities associated
with this project are covered in more detail in the following documents:-
Manufacturing Technology Transfer Plan for Angiozyme
Analytical Technology Transfer Plan for Angiozyme
These activities will follow the general framework outlined below:-
5.1 Initiation
Agree aims of the Technology transfer and the criteria for successful
transfer.
Identify information required from each side prior to initial manufacture.
Establish review milestones to ensure transfer is proceeding smoothly.
5.2 Initial Manufacture
Agree Technical support arrangements between RPI and Avecia LSM.
5.3 Validation
S-14
<PAGE>
Establish responsibilities for all aspects of validation. See also section
17. below.
5.4 Completion
Agree documents required and who approves against pre-agreed objectives.
6. Quality Assurance
Avecia shall manufacture Angiozyme to the best of its knowledge in
compliance with GMP as detailed in the 'Guidance for Industry;
Manufacturing, Processing, or Holding Active Pharmaceutical Ingredients'
Draft Guidance, March 1998, published by the FDA.
RPI shall confirm their satisfaction with the compliance level applied by
Avecia LSM at audit.
Findings from audit(s) will be communicated in writing to Avecia LSM and any
corrective actions mutually agreed between representatives from the 2
companies. In the event of a difference in interpretation of the required
quality standard, the view taken by RPI will be accepted by Avecia, provided
this standard is not below that recommended by Avecia. If it is a
significantly higher standard than recommended by Avecia, then the 2 parties
will meet and agree by negotiation how the situation should be managed.
7. Purchasing, supply and testing of raw materials and packaging
RPI will provide Avecia LSM with a materials listing for the manufacture of
Angiozyme, together with purchasing specifications. RPI will inform Avecia
of any changes in these specifications as they occur.
Avecia LSM will purchase materials to the specifications provided by RPI.
RPI will specify the suppliers for the critical raw materials (amidites and
CPG) in agreement with Avecia. Avecia will be responsible for selecting its
own suppliers for non-critical reagents. Avecia LSM will take responsibility
for all testing and clearance of raw materials used in the manufacture of
Angiozyme, on completion of the technology transfer of appropriate test
methods from RPI.
RPI shall confirm the suitability of Avecia's vendor certification and raw
material testing and sampling procedures at audit.
8. Manufacturing Facility
Avecia LSM and RPI will jointly conduct a risk assessment of any differences
between the Avecia and RPI manufacturing facilities and how they are
operated.
S-15
<PAGE>
The process will be operated under class 100,000 conditions, with additional
protection provided for the later stages of the process, which may be
especially vulnerable to microbial contamination. Details of this additional
protection will be jointly discussed and agreed between representatives of
the 2 companies.
[ * ]
The facility and equipment will be qualified and cleaned prior to initial
manufacture in accordance with Avecia's procedures.
RPI will audit the manufacturing facility, equipment and supporting
documentation prior to initial manufacture to assess their suitability for
use.
Findings from the audit will be communicated to Avecia in writing and any
corrective actions mutually agreed.
9. Manufacturing
The manufacturing process will be the subject of a formal Technology
transfer programme between RPI and Avecia (see section 5 above)
RPI will provide Avecia with full details of the existing manufacturing
process, including, in process tests and specifications for both the
intermediates and the active pharmaceutical ingredient (if available)
Avecia will establish the existing process in the development laboratories
in PTD and then conduct an experimental program to scale the process up for
transfer to the manufacturing facility within Grangemouth Works. RPI will be
kept fully informed of the experimental program and of any proposed
modifications to the process, which will be approved by representatives from
both companies.
Avecia will prepare formal process instructions for manufacture to the
scaled up process. RPI Technical and QA representatives will review this
documentation and any comments shall be incorporated by Avecia.
All specifications will be formally accepted and agreed between RPI and
Avecia personnel and subject to change control.
In addition to the documents described above, RPI shall either provide the
following, or pre-approve proposals from Avecia LSM:-
Format and content of the Certificate of analysis
S-16
<PAGE>
Labelling requirements
Definition of a batch
Lot or batch numbering system
Sampling plans
Sampling methods
10. Sampling, testing and release of active pharmaceutical ingredient
On completion of the formal technology transfer of the analytical release
methods for Angiozyme active ingredient, Avecia LSM will take responsibility
for the release of this product for further processing for human use. RPI
will conduct some repeat verification testing, this will be pre-agreed with
Avecia.
QA release will involve the QC release testing of the active ingredient,
together with a complete review of all batch documentation by Avecia
Grangemouth Works QA.
RPI will review the Avecia test procedures, to ensure that there are no
errors in the translation from RPI documentation.
RPI will be responsible for the validation of all the release test methods
and will ensure any repeat validation considered appropriate on transfer to
Avecia's analytical sites is prescribed as part of the Analytical Technology
Transfer protocol.
RPI will initially provide any necessary analytical reference standards,
together with their characterisation data. This may be reviewed at a future
date, as it becomes necessary to qualify further reference standards.
RPI will audit Avecia's laboratories to assess their suitability for use.
Audit observations will be communicated in writing to Avecia LSM and
corrective actions mutually agreed.
RPI will be responsible for specifying packaging and shipping conditions
which have been demonstrated to preserve the product's quality and integrity
during transport.
11. Control and Supply of Samples
Avecia will take and retain samples of Angiozyme in accordance with sampling
plans pre-agreed between RPI and Avecia QA representatives. As a minimum,
Avecia LSM will retain sufficient material from each batch to allow full
repeat testing at least twice.
Retention samples will be retained for at least one year after the
expiration date of the batch, or, if Angiozyme has a defined retest period,
for 3 years after the batch is distributed. Retention samples will be
packaged and stored under conditions prescribed by RPI.
S-17
<PAGE>
RPI will provide details of any sample requirements for shipment to their
premises, prior to manufacture of the batch concerned. This is to ensure
material is manufactured at the appropriate scale to cover sample
requirements and that arrangements for sampling can be made in a timely
manner.
Responsibility for analytical reference standards is covered in section 10
above.
12. Transport and Distribution
RPI will provide Avecia LSM with formal specifications for packaging and
shipping of Angiozyme.
Avecia LSM will be responsible for ensuring the requirements of these
specifications are met.
On departure from Avecia's Grangemouth site, responsibility for the API
passes to RPI.
13. Complaints and Recall
Any complaints from RPI to Avecia LSM should be directed to the Avecia LSM
commercial representative, who will then be responsible for informing the
Avecia LSM QA representative. The Avecia LSM QA representative will assemble
a team to address the complaint and, if appropriate, carry out an
investigation. The complaint will be handled in accordance with the Avecia's
quality procedures.
Avecia shall be responsible for advising RPI immediately of any systematic
failure discovered which may cast doubt on reliability of previous
manufacture or analysis. Communication in such situations will be involve
the Commercial and QA representatives from Avecia LSM and the QA
representative at RPI. RPI will be responsible for the implementation of any
decision they might take to recall the product as a result.
14. Safety, Health and Environment
Avecia will take responsibility for ensuring that the facilities, procedures
and equipment used for manufacture are designed and operated in accordance
with relevant legislation.
RPI will be responsible for all toxicological and Eco-tox data required for
the product to gain appropriate registration for manufacture, shipment and
use within the USA and Europe.
Avecia and RPI shall advise each other of any events that give raise to
concerns about the safety profile of the process.
S-18
<PAGE>
Avecia shall take responsibility for all on site incidents and will advise
RPI of all significant events that may have an impact on product
manufacturing rate, economics, safety profile or product quality.
RPI is responsible for the API on its departure from Avecia's Grangemouth
site.
15. Stability
RPI will take responsibility for all stability studies relating to Angiozyme
active pharmaceutical ingredient and will provide Avecia LSM with the
details of appropriate storage conditions to maintain its quality and
integrity.
RPI will provide Avecia LSM with information to allow Avecia LSM to assign
an expiry or retest date to material manufactured at Avecia LSM.
16. Validation
Avecia LSM will take responsibility for the qualification of the facilities
and equipment used in the manufacture of Angiozyme at Avecia Grangemouth
Works. RPI will audit this qualification activity.
RPI is responsible for the validation of all analytical test methods used
for the release of raw materials and in in-process testing and release of
the final active pharmaceutical ingredient.
Angiozyme is currently in Phase 1 clinical trials. As the drug moves to
later stage clinical trials RPI and Avecia LSM will discuss and agree
responsibilities for further process or analytical development and process
validation activities.
17. Subcontracting
Avecia LSM will not subcontract any activity associated with the
manufacture of Angiozyme without prior notification and approval from RPI.
Avecia LSM will take responsibility for the certification of all
subcontractors to the required regulatory standards.
Avecia LSM will make any appropriate audit reports available to RPI on
request.
18. Deviations and Change Control
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<PAGE>
QA representatives from RPI, Avecia Grangemouth Works and Avecia LSM shall
meet and agree a shared understanding of the definitions of changes and
deviations. Discussion will cover what changes are considered significant
and would require prior approval by RPI and similarly for deviations, what
would be considered significant and require notification of RPI.
Any significant change proposed by either RPI or Avecia shall be
communicated in writing via the QA representatives in each organisation. The
change will then be considered by a team of representatives from the
appropriate departments, in accordance with local change control procedures.
If appropriate a formal programme of work will be proposed and formally
agreed by representatives from each company.
Deviations will be handled through Avecia Grangemouth Works Deviation and
non-conformance procedure.
19. Documentation and Archiving
Avecia LSM will be responsible for the retention and storage of all batch
documentation in a secure QA archive. Documentation will be stored for a
minimum of ( whichever of those listed below is the longest):-
a) The term of the commercial agreement.
b) Five years after the expiry date of the batch manufactured.
RPI personnel may audit the batch documentation on request, given reasonable
notice.
Copies of the master batch records will be made available to RPI on request.
20. Regulatory
Avecia LSM will provide RPI with appropriate CMC information in support of
regulatory submissions.
The format and content of this information will be pre-agreed by
representatives from Avecia LSM and RPI's QA/Regulatory functions.
RPI will be responsible for submitting this information to the regulators as
part of their regulatory submission, but will allow Avecia LSM QA function
to review the information concerning Avecia prior to submission, to ensure
there are no errors in transcription which may result in Avecia being
misrepresented.
RPI will be responsible for requesting information from Avecia LSM
QA/Regulatory function as appropriate e.g. for annual updates.
S-20
<PAGE>
Avecia LSM QA representative will be responsible for informing RPI of
proposed changes to any activity associated with the manufacture of
Angiozyme, prior to implementation, to ensure that its regulatory impact can
be assessed and any necessary action agreed.
Avecia LSM will inform RPI of any corrective actions from a regulatory
inspection that may have an impact on the continued supply of Angiozyme.
S-21
<PAGE>
SCHEDULE 4
----------
Avecia LifeScience Molecules
DNA Medicines
Technology Transfer Plan
Manufacture of Angiozyme
at
Grangemouth Works
December 1999
_______________________________________________________________________________
Issued By:______________________________________ Date:_____________________
(Business Operations Manager)
_______________________________________________________________________________
Approved By:___________________________________ Date:_____________________
(Quality Assurance)
_______________________________________________________________________________
S-22
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE NO.
<S> <C>
1 Introduction..................................................... 3
2 Aims............................................................. 3
3 Initiation....................................................... 4
4 Project Nominees................................................. 5
5 Communication.................................................... 6
5.1 Documentation............................................... 6
5.2 Reviews.....................................................
6 Information Transfer............................................. 6
7 Initial manufacture.............................................. 7
7.1 Commissioning support....................................... 7
7.2 Initial manufacture......................................... 7
7.3 Change control.............................................. 7
8.1 Technology transfer completion................................... 8
8.1 Criteria for successful technology transfer.................
8.2 Technology transfer review and sign-off.....................
8.3 Post technology transfer....................................
9 Appendices 9
Appendix I: Flow chart for technical transfer
Appendix II: Timetable for RPI Technology Transfer Plan
Appendix III Information required from RPI
Appendix IV: Information required form Avecia
Appendix V : Information required to complete technology transfer
Appendix VI: Technology transfer acceptance document
</TABLE>
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<PAGE>
1 INTRODUCTION
This plan details the mechanism by which the RPI Angiozyme process will be
technology transferred between RPI and LifeScience Molecules Grangemouth
Works and sets out the activities, information required and timetable in
order to successfully complete the technology transfer exercise.
A well managed technology transfer is key to the establishment of a
manufacturing process which is consistent in operation and generates
Angiozyme of equivalent quality to that manufactured by RPI.
Material provided by LSM in Grangemouth will be used in a process
registered in the United States and the rest of the world. As such:
technology transfer, commissioning, validation and change control must be
undertaken to ensure that material produced in the Campaign is equivalent
to material produced by RPI for submissions to the FDA.
The material produced by this manufacture will be used for: Phase ()
Clinical Trials
Technology transfer will be conducted in three phases:
Initiation: Identification of responsible personnel
agreement on information to be transferred (protocol)
transfer of information
Commissioning: Pre manufacture Technical Transfer review
Initial manufacture
Note: The pre manufacturing technical transfer review must include
agreement of and actions to minimise the risks that may result from the
differences between the facilities at RPI and that at Grangemouth
Completion: Post manufacturing review of success of technology
transfer Sign -off of Technology transfer protocol
A flow chart outlining the process is attached as Appendix I
It is intended that sign-off will take place following the initial
campaign, subject to successfully meeting the required standards and
criteria.
2 AIMS
The purpose of technology transfer is to supply technical expertise and
associated information to enable Avecia Life Science Molecules, Grangemouth
facility, to successfully undertake manufacture of RPI Angiozyme in light
of the fact that the LSM and RPI facilities are not identical.
The agreed timetable is detailed in Appendix II.
The critical success factors for successful transfer are as follows:
. Avecia Life Science Molecules, Grangemouth Works will manufacture an
initial quantity of Angiozyme by the end of [ *. ] Future
manufacture may be carried out following the initial Campaign.
. The Grangemouth Works manufacturing process will be specified by the
current RPI process. Processing will be carried out within the scope
of the pre-determined parameters.
. An established change control mechanism should be used for any changes.
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. The quality of the Angiozyme supplied by Avecia Life Science Molecules
Grangemouth Works must be within specification and typical of
manufacture from RPI.
. Technology transfer, plant operation, processing and cleaning will be
carried out to Grangemouth Works Quality standards.
3 INITIATION
Technology transfer of RPI Angiozyme will be formally initiated in [ *. ]
Functional nominees are identified below and a checklist of relevant
documents is given in Appendices III and IV.
4 PROJECT NOMINEES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FUNCTION RPI CONTACT No LSM CONTACT No
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Technology Transfer Leader [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Chemistry [ * ] [ * ] [ * ] [ *-]
- -------------------------------------------------------------------------------
Process Engineering [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Quality Assurance [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Engineering [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Analytical Methods and [ * ] [ * ] [ * ] [ * ]
Specifications
- -------------------------------------------------------------------------------
Safety, Health and Environment [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Manufacture and waste disposal [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
Raw Materials and purchasing [ * ] [ * ] [ * ] [ * ]
- -------------------------------------------------------------------------------
</TABLE>
5 COMMUNICATION
5.1 DOCUMENTATION
The Technology transfer managers on each site will be formally responsible
for ensuring document issue and control.
All documents must be numbered and where appropriate version controlled
The transfer of all documents will must be done within a change control
system
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<PAGE>
A copy of all documents outlined in Appendices III and IV (information
required before commissioning) and Appendix V (information required before
technology transfer completion) must be supplied via the QA
representatives. This data will form the basis of the respective sites
technology transfer documentation.
5.2 REVIEWS
Meetings should be held between functional nominees as appropriate to
ensure complete transfer of information and progress on actions.
A formal pre-commissioning review will take place to ensure information
transfer is complete and that all relevant information has been
incorporated into Grangemouth Works systems.
Performance of the initial manufacture should be reviewed and documented as
early as possible after the campaign.
Following completion of the Campaign a technology transfer review will be
held prior to sign-off to ensure documentation is complete and
satisfactory.
6 INFORMATION TRANSFER
Information requirements from RPI and LifeScience Molecules are specified
in Appendices III and IV.
This data must be in place prior to the start of manufacture.
Key Elements:
Process guide and reporting ranges.
Quality Assurance.
Plant cleaning
Control of change
Analytical methods, standards and specifications
Raw material sources and specifications
Safety, Health and Environmental data
Hazard data sheets
Process Waste Streams
Pre commissioning review: Approval to manufacture
7 INITIAL MANUFACTURE
7.1 COMMISSIONING SUPPORT
Prior to commissioning, the arrangement for technical support between RPI
and LifeScience Molecules will be agreed.
Visits to each site of relevant staff of each discipline in preparation for
manufacture will be encouraged. This will include the requirements for
technical and analytical support from RPI
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<PAGE>
Throughout the technical transfer process progress will be monitored via a
steering committee which will include
[ * ]
7.2 Initial Manufacture
A project Plan should be prepared for the plant before commissioning. The
following issues should be addressed:
. Engineering Validation including Installation and Operational
Qualifications carried out by LifeScience Molecules.
. Cleaning - Demonstration of appropriate levels of cleaning, between
different materials manufactured in the facilities and the manufacture
of RPI Angiozyme will be carried out to current Grangemouth Works
systems.
. Analytical technical transfer plan
. Training of Avecia personnel by RPI including recording of any training
received
7.3 CHANGE CONTROL
An agreed procedure will be issued defining requirements for change
control.
During Technology Transfer the starting point for Change Control will be
defined as the information supplied by RPI to define the technology.
Amendments to the RPI technology should be covered by the Grangemouth Works
change control procedure and should not be adopted without prior
authorisation from RPI.
8 TECHNOLOGY TRANSFER COMPLETION
On completion of Technology Transfer responsibility will pass to
Grangemouth Works to control change independently.
Elements that cannot be changed without prior authorisation should be
identified as part of the technology transfer completion review.
8.1 CRITERIA FOR SUCCESSFUL TECHNOLOGY TRANSFER
A number of criteria are outlined below which must be met before technology
transfer can be formally completed.
8.1.1 Process
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<PAGE>
. Demonstrate that specified processing parameters can be operated to and
that product, which meets specification, typical of material produced
in RPI, can be manufactured.
. Demonstrate operation of an effective mechanism for control of change
opposite process technology.
. Demonstrate the ability to operate the process at the required capacity
and operational quality.
8.1.2 Raw Materials
. Demonstrate that a secure supply of raw materials and starting material
from agreed suppliers has been established.
. Demonstrate control of change procedure for raw material supplies.
8.1.3 Waste Streams
. Demonstrate that a secure suitable waste disposal routes has been
established.
8.1.4 Analytical and Specifications
. Demonstrate a complete implementation of technology.
. Demonstrate satisfactory operation of the transferred methods before
data is used for batch release.
. Operate an effective mechanism for control of change of analytical
technology.
8.1.5 Safety, Health & Environment
. Demonstrate that adequate hygiene procedures and practices are in place
to ensure that manufacture of Angiozyme does not result in adverse
occupational health effects.
. Demonstrate that adequate precautions are built into plant design and
layout and procedures to ensure the safe operation of the process.
. Demonstrate adequate environmental protection measures and secure
authorisation from relevant pollution inspectorate.
8.1.6 Regulatory Compliance
. Demonstrate that the process can be operated satisfactorily to cGMP.
. Demonstrate compliance with the agreed manufacturing process,
analytical methods and specifications.
8.1.7 Engineering
. Demonstrate that the plant has been built and validated to the
appropriate regulatory standard.
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<PAGE>
8.2 TECHNOLOGY TRANSFER REVIEW AND SIGN-OFF
Following the initial manufacturing campaign there will be a review to
define whether the critical success factors listed in 8.1 have been met.
The review will comprise the preparation and approval of documents
(appendix V) and a meeting to agree a list of any outstanding actions.
In the event of Grangemouth Works conducting a second or subsequent
campaign of Angiozyme prior to sign-off of technology transfer a written
plan will be agreed between RPI and Grangemouth Works covering outstanding
issues.
After a final review to confirm that technology transfer has been
successfully concluded then the Technology Transfer Completion Document
will be issued for authorisation.
Completion is targeted for end of November 2000.
8.3 POST TECHNOLOGY TRANSFER
As part of technology transfer sign off a plan will be agreed in the event
of any future manufacturing campaigns. Routes of communications between
the two sites will be clearly identified emphasising the need for
continuity. A technical manager will be nominated from each site to act as
first line contacts for transfer of information.
S-29
<PAGE>
APPENDIX I
[FLOOR PLAN APPEARS HERE]
S-30
<PAGE>
APPENDIX II
Timetable for Angiozyme Technology Transfer Plan: Target Dates
Initiation of Technology Transfer [ * ]
Technology Transfer Plan Preparation [ * ]
Information Transfer [ * ]
Pre-commissioning Review
Commissioning/ Initial Manufacture
Equivalence Testing
Completion Review and Audit
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<PAGE>
APPENDIX III
Information Required From RPI
<TABLE>
<CAPTION>
1 PROCESS
- ---------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.1 Process Guide for Angiozyme in [ * ] [ * ]o
controlled format
- ---------------------------------------------------------------------------------------------------------------------------
1.2 RPI approval that Avecia materials of [ * ] [ * ]
construction are suitable for
manufacture of Angiozyme
- ---------------------------------------------------------------------------------------------------------------------------
1.3 Report of any know critical parameters [ * ] [ * ]
associated with the process (synthesis,
cleavage/deprotection, purification ,UF,
Lyophilisation) which may impacts on
the quality of final product
- ---------------------------------------------------------------------------------------------------------------------------
1.4 Environmental Control standards: [ * ] [ * ]
Confirmation that LSM standards for
control of the manufacturing
environment are adequate for the
manufacture of Angiozyme
- ---------------------------------------------------------------------------------------------------------------------------
1.5 RPI to define acceptable hold points [ * ] [ * ]
and conditions for storage of
in-process material and intermediates
- ---------------------------------------------------------------------------------------------------------------------------
1.6 Schedule of technical support during [ * ] [ * ]
manufacture
- ---------------------------------------------------------------------------------------------------------------------------
1.8 Report on development of manufacture [ * ] [ * ]
of Angiozyme
- ---------------------------------------------------------------------------------------------------------------------------
1.9 Requirements for Clearance of Final [ * ] [ * ]
Product
- ---------------------------------------------------------------------------------------------------------------------------
1.10 Ultra-filtration development reports [ * ] [ * ]
including summary of optimised
conditions and [ * ]
- ---------------------------------------------------------------------------------------------------------------------------
1.11 Freeze drying development report [ * ] [ * ]
including agreement on any further
characterisation of technologies
- ---------------------------------------------------------------------------------------------------------------------------
1.12 Report on assessment of risk arising [ * ] [ * ]
from differences between RPI and Avecia
facilities Scale/MOC/ Operating methods/
Process control
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-32
<PAGE>
<TABLE>
<CAPTION>
PROCESS
- ------------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.13 Controlled copy of all documents [ * ]
associated with purification including
efficiency test and results, sample
strength (OD, %FLP), solvent
gradients, solvent temperatures,
fraction times and any associated
stability data.
- ------------------------------------------------------------------------------------------------------------------------------
1.14 Controlled copies of all document [ ]
associated with recycle of product
- ------------------------------------------------------------------------------------------------------------------------------
1.15 Details of lagging material used for [ * ]
insulation HPLC column.
- ------------------------------------------------------------------------------------------------------------------------------
1.16 Detailed report of any known critical [ * ]
parameters associated with the
purification of product including all
available stability data.
- ------------------------------------------------------------------------------------------------------------------------------
1.17 Synthesis method for manufacture of [ * ]
Angiozyme on APB Oligo Pilot
- ------------------------------------------------------------------------------------------------------------------------------
1.18 Details of all stability trials on raw [ * ]
materials, in-process samples and
final product for assignment of shelf
life.
- ------------------------------------------------------------------------------------------------------------------------------
1.19 Compositions of waste streams [ * ]
- ------------------------------------------------------------------------------------------------------------------------------
1.20 Details of serious deviations from [ * ]
normal operations outlining causes,
impact and preventative measures adopted.
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 RAW MATERIALS
- ----------
- ------------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.1 Raw Material Master List indicating [ * ] [ * ]
critical raw materials to be purchased
from RPI named suppliers
- ------------------------------------------------------------------------------------------------------------------------------
2.2 Reports on any audits of Raw Material [ * ] [ * ]
Vendors which Avecia will use.
- ------------------------------------------------------------------------------------------------------------------------------
2.3 Raw Material Specifications including [ * ] [ * ]
packaging materials
- ------------------------------------------------------------------------------------------------------------------------------
2.4 Details of any special storage or [ * ]
handling procedures for raw materials
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULES 5 ANALYTICAL AND SPECIFICATIONS
- -----------
S-33
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.1 Analytical Technology Transfer Plan [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
3.2 Methods of analysis and Specification [ * ] [ * ]
for Angiozyme.
- -------------------------------------------------------------------------------------------------------------------------------
3.3 Specification and methods for analysis [ * ] [ * ]
of Raw Materials including
packaging materials.
- -------------------------------------------------------------------------------------------------------------------------------
3.4 Methods and specifications for [ * ] [ * ]
in-process and intermediate tests
- -------------------------------------------------------------------------------------------------------------------------------
3.5 Methods and specifications for [ * ] [ * ]
cleaning verification tests
- -------------------------------------------------------------------------------------------------------------------------------
3.6 Analytical reference standards [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
3.7 Sampling requirements [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
3.8 Analytical Technical transfer report [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
3.9 Transfer protocol for individual methods [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
3.10 Validation reports of method developed at RPI [ * ] [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 REGULATORY
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4.1 QA agreement which outlines [ * ] [ * ]
responsibilities for validation.
- -------------------------------------------------------------------------------------------------------------------------------
4.2 Format and content guidance for CMC [ * ]
information required for regulatory
submission
(This is Product Dependent)
Angiozyme [ * ]
Heptazyme
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-34
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5 HEALTH AND SAFETY
- ----------
- ------------------------------------------------------------------------------------------------------------------------------
Information RPI Avecia Target Completion
Responsible Responsible Date Date
person Person
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5.1 Substance Information sheets (HDS) and [ * ] [ * ]
information on RPI Operating methods
used when handling Angiozyme
- ------------------------------------------------------------------------------------------------------------------------------
5.2 Substance information sheets on raw [ * ] [ * ]
materials (MSDS)
- ------------------------------------------------------------------------------------------------------------------------------
5.3 Available analytical methods for [ * ] [ * ]
Angiozyme for any occupational
hygiene monitoring undertaken by RPI
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 CONTROL OF CHANGE
- ----------
- ------------------------------------------------------------------------------------------------------------------------------
Information Responsible Avecia Target Completion
person Responsible Date Date
Person
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.1 Procedure for obtaining RPI [ * ] [ * ]
authorisation for proposed
amendments
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 TRAINING
- ----------
- ------------------------------------------------------------------------------------------------------------------------------
Information Responsible Avecia Target Completion
person Responsible Date Date
Person
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.1 A plan for training personnel involved [ * ] [ * ]
in the manufacture of RPI products
including method of recording any
training received
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-35
<PAGE>
APPENDIX IV
Information Required From LSM
<TABLE>
<CAPTION>
SCHEDULE 5 PROCESS
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person Person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.1 A commissioning plan for Angiozyme [ * ]
including engineering and equipment
qualification reports
- -------------------------------------------------------------------------------------------------------------------------------
1.2 Justified assurance that the plant has [ * ]
been cleaned prior to start of
manufacture of Angiozyme
- -------------------------------------------------------------------------------------------------------------------------------
1.3 Process record sheet for Angiozyme for [ * ]
RPI comments and approval
- -------------------------------------------------------------------------------------------------------------------------------
1.4 Latest "for construction" line diagrams. [ * ]
An "as-built" plant diagram will be
provided as soon as practicable For
use as reference documents for control
of change
- -------------------------------------------------------------------------------------------------------------------------------
1.5 Materials of construction for plant: [ * ] [ * ]
Avecia to generate MOC document for
RPI approval
- -------------------------------------------------------------------------------------------------------------------------------
1.6 A batch timetable for the initial Campaign [ * ]
- -------------------------------------------------------------------------------------------------------------------------------
1.7 A schedule for technical cover during [ * ]
commissioning
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 RAW MATERIALS
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.1 Evidence that suppliers of raw [ * ]
materials to be used in the
Grangemouth campaign have been approved
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S-36
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5 ANALYTICAL AND SPECIFICATIONS
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person Person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.1 Grangemouth Works methods of analysis [ * ]
and specifications to be used for Raw
Materials, intermediates and API for
RPI to check and approve.
- -------------------------------------------------------------------------------------------------------------------------------
3.2 Analytical results from cross [ * ]
correlation studies.
. Raw materials
. Intermediates
. API
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 HEALTH AND SAFETY
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person Person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.1 Assurance that all appropriate risk [ * ]
assessments have been completed prior
to start of manufacture.
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 ENVIRONMENTAL
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.1 Evidence of approval for manufacture from [ * ]
the appropriate authorities.
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE 5 CONTROL OF CHANGE
- ----------
- -------------------------------------------------------------------------------------------------------------------------------
Information Avecia RPI Target Completion
Responsible Responsible Date Date
person person
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.1 Guidelines for Grangemouth [ * ]
Works, system of pre-approval of change
control to be agreed with RPI.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
APPENDIX V
Information And Reports Required Before Technology Transfer Can Be Concluded
<TABLE>
<S> <C>
1 PROCESS SOURCE
1.1 Pre Manufacturing technology transfer review LSM
1.2 Manufacturing Report LSM
SCHEDULE 5 Control of change procedure for routine manufacture
- ----------
1.4 Summary report on suitability of Angiozyme produced at Grangemouth RPI
1.5 Summary report on the suitability of the process RPI
for future manufacture
SCHEDULE 5 RAW MATERIALS
- ----------
2.1 Report on raw material sources LSM
SCHEDULE 5 ANALYTICAL
- ----------
3.1 Summary of all results, and review of operation LSM
of methods
3.2 Cross validation reports LSM
4 HEALTH, SAFETY & ENVIRONMENT
4.1 Report on health and hygiene monitoring LSM
4.2 Confirmation of acceptable occupational health LSM
position
4.3 Waste disposal routes used LSM
5 TECHNOLOGY TRANSFER
5.1 Technology Transfer Closure Report RPI/LSM
5.2 Definition of responsibilities and routes of RPI/LSM
communication post technology transfer
</TABLE>
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<PAGE>
APPENDIX VI :
TECHNOLOGY TRANSFER ACCEPTANCE DOCUMENT
The RPI Angiozyme process has been transferred from RPI to LifeScience
Molecules Grangemouth Works and the reports required by the Technology Transfer
Plan completed.
- --------------------------------------------------------------------------------
The Product Name: Number of Stages:
- --------------------------------------------------------------------------------
CAS nomenclature Stage Name:
- --------------------------------------------------------------------------------
The attached completion report provides a summary of technology transfer and any
actions outstanding.
- --------------------------------------------------------------------------------
For RPI:
Quality Assurance Manager:
_________________________________ Date: _______________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For RPI:
Technology Transfer Manager:
_____________________________________ Date: ____________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For Avecia:
Quality Assurance Manager:
_________________________________ Date: _______________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For Avecia:
Technology Transfer Manager:
_____________________________________ Date: ____________________
- --------------------------------------------------------------------------------
S-39
<PAGE>
SCHEDULE 5
----------
Yield and Price Matrix
----------------------
Order size (Kg)
---------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Raw material cost ($/g of 1 3 5
product)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[ * ] [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------------------------------------
[ * ] [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------------------------------------
[ * ] [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
S-40
