<PAGE>   1
                                                                   EXHIBIT 10.21

* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as amended.


              THIRD AMENDMENT TO DISTRIBUTION AND SUPPLY AGREEMENT

   This "Third Amendment," effective as of the last date set forth on the
signature page hereof is by and between Corixa Corporation ("Corixa"), Schering
Corporation and Schering-Plough Ltd. (collectively "Schering"). Corixa and
Schering are sometimes referred to herein individually as a party and
collectively as the parties.

   WHEREAS, Schering and Ribi ImmunoChem Research, Inc. ("RIBI") had entered
into that certain Distribution and Supply Agreement effective March 11, 1998
(the "Agreement") and as amended on May 26, 1998 and July 22, 1999;

   WHEREAS, Corixa merged with RIBI on October 6, 1999, and thereby assumed all
rights and obligations of RIBI, including those set forth herein; and

   WHEREAS, the parties desire to further amend the Agreement to extend the
Defined Date;

   NOW, THEREFORE, in consideration of the foregoing facts and the mutual
agreements and covenants set forth herein, the parties agree that the Agreement
is hereby amended as follows:

   1. Except as expressly set forth in this Third Amendment, all capitalized
terms used herein shall have the meanings set forth in the Agreement.

   2. Section 5.1(b) shall be amended and restated in its entirety to read as
follows:

   (b) The term "Defined Date" shall mean [*].

   3. It is understood and agreed by the parties that, except as expressly
modified in this Third Amendment, all other provisions of the Agreement shall
remain in full force and effect.

   IN WITNESS THEREOF, the parties have caused this Amendment to be executed in
duplicate by their duly authorized representatives.

CORIXA CORPORATION                   SCHERING CORPORATION

By:   /s/  Mark McDade               By: /s/   David Poorvin
  --------------------------------       ------------------------------------
Mark McDade, President and COO           David Poorvin, Vice President

Date: 15 June `00                    SCHERING-PLOUGH, LTD.
     -----------------------------

                                     By: /s/   David Poorvin
                                         ------------------------------------
                                         David Poorvin, Prokurist

                                     Date:  15 June 2000
                                          -----------------------------------

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* Confidential Treatment Requested
<PAGE>   2
                        [SCHERING CORPORATION LETTERHEAD]

VIA FACSIMILE (406)363-6129
AND AIRBORNE EXPRESS

October 26,1999

Ribi ImmunoChem Research, Inc.
553 Old Corvallis Road
Hamilton, Montana 59840-3131
Attention: President

   Re: Distribution and Supply Agreement

Gentlemen:

   This letter is sent in connection with: (1) the Distribution and Supply
Agreement effective as of March 11, 1998 between Ribi ImmunoChem Research, Inc.
("RIBI") and Schering Corporation (the "U.S. Agreement") and (2) the
Distribution and Supply Agreement effective as of March 11, 1998 between RIBI
and Schering-Plough, Ltd. (the "Ex-U.S. Agreement"), both relating to
Melacine(R).

   On behalf of both Schering-Plough, Ltd and Schering Corporation this letter
shall serve as formal notice that pursuant to Sermon 5.1(b) of each of the U.S.
Agreement and Ex-U.S. Agreement, the term "Defined Date" shall be extended to
and shall mean [*].

   If you require any further information, please contact the undersigned at the
above address.

                                    Very truly yours,

                                    SCHERING CORPORATION
                                    SCHERING-PLOUGH, LTD.

                                    By: /s/   DAVID POORVIN
                                        ------------------------------------
                                        David Poorvin

Cc: Dr. Steven Gillis, President & CEO
    Corixa Corporation

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* Confidential Treatment Requested

                                       2


<PAGE>   3
                        DISTRIBUTION AND SUPPLY AGREEMENT
                                     between
                              SCHERING CORPORATION

                                       and

                         RIBI IMMUNOCHEM RESEARCH, INC.


                                       3


<PAGE>   4
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                         <C>
ARTICLE I DEFINITIONS..................................................................       1
1.1     Affiliate......................................................................       1
1.2     Approved Facility..............................................................       1
1.3     Calendar Quarter...............................................................       2
1.4     Calendar Year..................................................................       2
1.5     Competitive Product............................................................       2
1.6     Dose...........................................................................       2
1.7     Expanded Labeling..............................................................       2
1.8     First Commercial Sale..........................................................       2
1.9     GMPs...........................................................................       2
1.10    Health Registration(s).........................................................       2
1.11    Improvement....................................................................       2
1.12    Labeling.......................................................................       2
1.13    Manufacture....................................................................       3
1.14    Melacine(R) Melanoma Theraccine................................................       3
1.15    Minimum Labeling...............................................................       3
1.16    Net Sales......................................................................       3
1.17    Patent rights..................................................................       3
1.18    Product........................................................................       4
1.19    Product Specifications.........................................................       4
1.20    Proprietary Information........................................................       4
1.21    Regulatory Authority...........................................................       4
1.22    Requirements...................................................................       4
1.23    Ribi Know-How..................................................................       4
1.24    Territory......................................................................       4
1.25    Trademark......................................................................       4
1.26    Valid Patent Claim.............................................................       4

ARTICLE II CERTAIN DEVELOPMENT MATTERS.................................................       5

2.1     Research and Development Activities............................................       5
          2.1.1   Studies..............................................................       5
          2.1.2   Data.................................................................       5
          2.1.3   Other Studies........................................................       5
2.2     Improvements...................................................................       5

ARTICLE III REGULATORY MATTERS.........................................................       6

3.1     Product Registrations..........................................................       6
          3.1.1   Health Registrations.................................................       6
          3.1.2   Ownership of Health Registrations....................................       6
3.2     Agency Communications..........................................................       6
          3.2.1   Disclosures to the Regulatory Agencies...............................       6
          3.2.2   Agencies Queries.....................................................       7
          3.2.3   Agency Action Relating to Health Registration........................       7
3.3     Pricing and Reimbursement Approvals............................................       7
3.4     Governmental Inspections.......................................................       7
3.5     Labeling and Promotional Literature............................................       8
3.6     Notice of Adverse Reactions....................................................       8
3.7     Complaints.....................................................................       8
3.8     Recalls and Market Withdrawals.................................................       8
3.9     Debarment......................................................................       9

ARTICLE IV MARKETING RIGHTS; EXCHANGE OF INFORMATION; DEVELOPMENT AND
COMMERCIALIZATION......................................................................       9

4.1     Marketing Rights...............................................................       9
4.2     Exchange of Information........................................................       9
</TABLE>


                                       4


<PAGE>   5

<TABLE>
<S>                                                                                         <C>
4.3 Development and Commercialization..................................................       9
4.4 Excused Performance................................................................      10

ARTICLE V PAYMENTS; SUPPLY PRICE AND REPORTS...........................................      10

5.1 CONSIDERATION FOR DISTRIBUTION RIGHTS..............................................      10
5.2 Escrow.............................................................................      10
5.3 Milestone Payments.................................................................      11
5.4 Supply Price.......................................................................      12
5.5 Minimum Payments - Base Price/Margin Payment.......................................      12
5.6 Reports; Method of Payment.........................................................      13
5.7 Maintenance of Records; Audits.....................................................      13
5.8 Income Tax Withholding.............................................................      14

ARTICLE VI SUPPLY OF PRODUCT...........................................................      14

6.1 Supply of Schering's Requirements..................................................      14
6.2 Forecasts/Purchase Orders..........................................................      14
6.3 Additional Quantities..............................................................      15
6.4 Stoppage Due to Good Cause.........................................................      15
6.5 Right of Rejection.................................................................      15
6.6 Scarcity of Materials..............................................................      15
6.7 Returns............................................................................      16
6.8 Defective Product/Sample Analyses..................................................      16

ARTICLE VII DELIVERY AND RELATED MATTERS...............................................      16

7.1 Risk of Loss.......................................................................      16
7.2 Schedule...........................................................................      16
7.3 Storage............................................................................      16
7.4 Warranty...........................................................................      16

ARTICLE VIII MANUFACTURING; REGULATORY MATTERS; RECORDS................................      17

8.1 Specifications Amendments..........................................................      17
8.2 Ribi Approvals.....................................................................      17
8.3 Records............................................................................      17
8.4 Facility Compliance and Related Matters............................................      17
8.5 Quality Control Program............................................................      17
8.6 Approval for Manufacturing Changes; Third Party Manufacturing......................      17
8.7 Retention of Sample................................................................      18
8.8 Lot Failure........................................................................      18
8.9 Inspection by Schering.............................................................      18
8.10 Environmental and Other Laws and Regulations......................................      18


ARTICLE IX FORCE MAJEURE...............................................................      18

9.1 Force Majeure......................................................................      18

ARTICLE X PATENTS......................................................................      19

10.1 Filing, Prosecution and Maintenance of Patents....................................      19
10.2 Option of Schering to Prosecute and Maintain Patents..............................      19
10.3 Enforcement.......................................................................      19
        10.3.1 Notice and Discontinuance of Infringement...............................      19
        10.3.2 Continuance of Infringement.............................................      20
10.4 Certification Under Drug Price Competition and Patent Term Restoration Act........      20
10.5 Abandonment.......................................................................      21
</TABLE>


                                       5


<PAGE>   6
<TABLE>
<S>                                                                                         <C>
10.6 Patent Term Restoration...........................................................      21
10.7 Notices...........................................................................      21

ARTICLE XI CONFIDENTIALITY AND PUBLICATION.............................................      21

11.1 Nondisclosure Obligation..........................................................      21
11.2 No Publicity......................................................................      22
11.3 Publication.......................................................................      22

ARTICLE XII REPRESENTATIONS AND WARRANTIES.............................................      23

12.1 Representations and Warranties of Each Party......................................      23
12.2 Ribi's Representations............................................................      24
12.3 Continuing Representations........................................................      25
12.4 No Inconsistent Agreements........................................................      25

ARTICLE XIII INDEMNIFICATION AND LIMITATION ON LIABILITY...............................      26

13.1 Indemnification by Schering.......................................................      26
13.2 Indemnification by Ribi...........................................................      26
13.3 Conditions to Indemnification.....................................................      26
13.4 Settlements.......................................................................      26
13.5 Limitation of Liability...........................................................      27
13.6 Insurance.........................................................................      27

ARTICLE XIV TERM AND TERMINATION.......................................................      27

14.1 Term and Expiration...............................................................      27
14.2 Termination by Schering...........................................................      27
14.3 Termination.......................................................................      27
        14.3.1 Termination for Cause...................................................      27
14.4 Effect of Termination.............................................................      28

ARTICLE XV TRADEMARKS..................................................................      28

15.1 Trademark.........................................................................      28
15.2 Infringement......................................................................      28
15.3 Limit on Ribi Use and Grant of Trademarks.........................................      28

ARTICLE XVI MISCELLANEOUS..............................................................      28

16.1 Assignment........................................................................      28
16.2 Governing Law and Jurisdiction....................................................      29
16.3 Waiver............................................................................      29
16.4 Independent Relationship..........................................................      29
16.5 Entire Agreement; Amendment.......................................................      29
16.6 Notices...........................................................................      30
16.7 Severability......................................................................      30
16.8 Recording.........................................................................      31
16.9 Further Action....................................................................      31
16.10 Counterparts.....................................................................      31
</TABLE>


SCHEDULES AND EXHIBITS

SCHEDULE 1.17 PATENT RIGHTS

SCHEDULE 1.19 PRODUCT SPECIFICATIONS

EXHIBIT 3.6 ADVERSE EVENT REPORTING PROCEDURE


                                       6


<PAGE>   7

                       DISTRIBUTION AND SUPPLY AGREEMENT.

   THIS AGREEMENT ("Agreement") effective as of March 11, 1998 ("Effective
Date"), between Schering Corporation, a corporation organized and existing under
the laws of the State of New Jersey having a place of business at 2000 Galloping
Hill Road, Kenilworth, New Jersey 07033 ("Schering") and Ribi ImmunoChem
Research, Inc., a corporation organized and existing under the laws of Delaware
having a place of business at 553 Old Corvallis Road, Hamilton, Montana
59840-3131("RIBI").

                                   WITNESSETH:

   WHEREAS, RIBI has developed RIBI Know-How (as hereinafter defined) and has
rights to Patent Rights (as hereinafter defined);

   WHEREAS, Schering desires to obtain exclusive distributorship rights in the
United States territory to the Product (as hereinafter defined), and RIBI
desires to grant such rights, upon the terms and conditions set forth herein;

   WHEREAS, Schering desires to purchase its requirements of Product from RIBI,
and RIBI desires to manufacture and supply to Schering such Product, upon the
terms and conditions set forth herein;

   NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

   As used in this Agreement, the following terms, whether used in the singular
or plural, shall have the respective meanings set forth below:

   1.1 The term "Affiliate" shall mean any individual or entity directly or
indirectly controlling, controlled by or under common control with, a party to
this Agreement For purposes of this Agreement, the direct or indirect ownership
of over fifty percent (50%) of the outstanding voting securities of an entity,
or the right to receive over fifty percent (50%) of the profits or earnings of
an entity shall be deemed to constitute control. Such other relationship as in
fact gives such individual or entity the power or ability to control the
management, business and affairs of an entity shall also be deemed to constitute
control.

   1.2 The term "Approved Facility" shall mean that RIBI facility located at
Hamilton, Montana and/or such other locations as RIBI shall determine and
referenced in the Health Registrations as an approved site for the Manufacture
of the Product. Such term includes all of the equipment, machinery and
facilities of RIBI at such location that are used in the Manufacture and storage
of Product.

   1.3 The term "Calendar Quarter" shall mean the respective periods of three
(3) consecutive calendar months ending on March 31, June 30, September 30 and
December 31.

   1.4 The term "Calendar Year" shall mean each successive period of twelve (12)
months commencing on January 1 and ending on December 31.

   1.5 The term "Competitive Product" shall mean a therapeutic vaccine with a
melanoma indication which has or attains a market share of twenty percent (20%)
or more in the Territory as measured by unit sales [*].

   1.6 The term "Dose" shall mean [*].

   1.7 The term "Expanded Labeling" shall mean [*].

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<PAGE>   8
   1.8 The term "First Commercial Sale" shall mean, with respect to any Product,
the first sale for end use or consumption of such Product in the Territory after
all required approvals have been granted by the U.S. Food and Drug
Administration ("FDA").

   1.9 The term "GMPs" shall mean good manufacturing practices for the methods
to be used in, and the facilities and controls to be used for, the manufacture,
processing, packing and holding of drugs, all as set forth from time to time by
the FDA.

   1.10 The term "Health Registration(s)" shall mean the technical, medical and
scientific licenses, registrations, authorizations and/or approvals of the
Product for the treatment of melanoma (including any prerequisite manufacturing
approvals or authorizations related thereto) that are required or deemed
necessary by the Regulatory Authority or any national, regional, state or local
regulatory agency, department, bureau or other-governmental entity in the
Territory for the manufacture, distribution, use or sale of Product in the
Territory. Health Registrations include, without limitation, the Biologics
Licensing Application and the Establishment Licensing Application filed with the
FDA and any replacement or corresponding applications thereto.

   1.11 The term "Improvement" shall mean [*].

   1.12 The term "Labeling" shall mean Minimum Labeling or Expanded Labeling.

   1.13 The term "Manufacture(d)" shall mean the manufacture [*] of the Product
in accordance with this Agreement. It is understood by the parties hereto that
Schering shall be responsible for [*].

   1.14 The term "Melacine(R) melanoma theraccine" shall mean a therapeutic
vaccine for the treatment or prevention of [*] in humans which comprises as a
first component a [*] melanoma cell lysate [*] and a second component, Detox(TM)
immunostimulant [3-O-deacylated monophosphoryl lipid A (3DMLA) and cell wall
skeleton (CWS)].

   1.15 The term "Minimum Labeling" shall mean [*].

   1.16 The term "Net Sales" shall mean [*]

   1.17 The term "Patent Rights" shall mean any and all patents and patent
applications (which for the purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention) which during the term of this Agreement are owned by RIBI or to which
RIBI through license or otherwise acquires rights, including those listed on
Schedule 1.17 which relate to Product and the divisions, continuations,
continuations-in-part, patents of addition, reissues, renewals, extensions,
registrations, confirmations, re-examinations, any provisional applications,
supplementary protection certificates or the like of any such patents and patent
applications and foreign equivalents thereof.

   1.18 The term "Product" shall mean Melacine(R) melanoma theraccine for sale
containing the Dose.

   1.19 The term "Product Specifications" shall mean the specifications and
quality control testing procedures for Product set forth in Exhibit 1.19 hereto,
as amended from time to time only by the express written agreement of RIBI and
Schering.

   1.20 The term "Proprietary Information" shall mean [*].

   1.21 The term "Regulatory Authority" shall mean the applicable government
regulatory authority in the Territory involved in granting the Health
Registrations for the Product. Such term includes, without limitation, the
United States Food and Drug Administration and any successor agency thereto
("FDA").

   1.22 The term "Requirements" shall mean all quantities of the Product that
shall be required by Schering for distribution, marketing, and sale of the
Product in the Territory during the term hereof.

   1.23 The term "RIBI Know-How" shall mean [*].

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<PAGE>   9
   1.24 The term "Territory" shall mean the United States of America and its
territories and possessions.

   1.25 The term "Trademark" shall mean Melacine(R) melanoma theraccine.

   1.26 The term "Valid Patent Claim" shall mean a claim of an issued and
unexpired patent included within the Patent Rights, which has not been revoked
or held unenforceable or invalid by a decision of a court or other government
agency of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, and which has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise.


                                   ARTICLE II
                           CERTAIN DEVELOPMENT MATTERS

   2.1 Research and Development Activities.

       2.1.1 Studies. RIBI shall incur all costs and expenses in connection with
the ongoing human clinical studies relative to the development of Product for
Expanded Labeling and, assuming such human clinical studies are successful as
determined by RIBI, costs associated with applications for Health Registrations
for the Product with the Minimum Labeling in the Territory and with the Expanded
Labeling in the Territory. In the event Schering desires to conduct the studies
and obtain the approvals necessary to obtain labeling for [*].

       2.1.2 Data. All data arising out of the studies performed by RIBI under
this Section 2.1 [*].

       2.1.3 Other Studies. Schering may, at its discretion, conduct additional
clinical trials with the Product. All data arising out of studies performed by
Schering [*].

       2.1.4 Records. RIBI shall maintain records, in sufficient detail and in
good scientific manner appropriate for patent and regulatory purposes, which
shall be complete and accurate and shall fully and properly reflect all work
done and results achieved in connection with or relating to Product (including
all data in the form required under all applicable laws, rules and .
regulations). Such records shall include [*] Schering shall have the right,
during normal business hours and upon reasonable notice, to inspect records
relative to such event. Schering shall maintain such records and the information
disclosed therein in confidence in accordance with Section 11.1. [*]

   2.2 Improvements. Any Improvements relating to the Product developed during
the term of this Agreement by or on behalf of RIBI shall be deemed to be [*].

                                   ARTICLE III
                               REGULATORY MATTERS

   3.1 Product Registrations.

       3.1.1 Health Registrations.

           (a) RIBI shall be responsible, at its cost and expense, for applying
for and maintaining Health Registrations to conform to U.S. law for the sale of
the Product by Schering in the Territory. RIBI shall [*] obtain Health
Registrations with Minimum Labeling within the Territory and with Expanded
Labeling within the Territory. RIBI's efforts shall be [*].

           (b) In the event Schering desires to obtain Health Registration for
[*].

       3.1.2 Ownership of Health Registrations.

           (a) Each Health Registration shall be filed in RIBI's name or the
name of a designated RIBI Affiliate. RIBI shall execute such "rights of
reference" or other documents that may be required by the FDA to permit Schering
to sell and distribute Product under

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<PAGE>   10
this Agreement. Notwithstanding the filing name on the Health Registration,
Schering shall retain the exclusive rights to sell and distribute Product under
the terms of this Agreement.

           (b) RIBI shall not assign or transfer the Health Registration, or any
amendment or supplement thereto, without the [*] except [*].

   3.2 Agency Communications.

       3.2.1 Disclosures to the Regulatory Agencies. RIBI or the designated RIBI
Affiliate shall be responsible for [*]. Any disclosures to the Regulatory
Authorities by RIBI shall be [*]. RIBI shall not require any [*] to make such
disclosure. Prior to disclosure to any Regulatory Authority which would be [*].
Whenever possible, RIBI shall furnish to Schering a copy of all [*].

       3.2.2 Agencies Queries. RIBI shall notify Schering within [*] of receipt
by RIBI of any and all queries received from the Regulatory Authorities
concerning the registration or Labeling of the Product in the Territory. RIBI
shall promptly provide notice to Schering of, and Schering shall have the right
to provide RIBI with comments or suggestions regarding such queries, if such
queries may impact the Product in the Territory.

       3.2.3 Agency Action Relating to Health Registration. Each party shall
immediately notify the other party of any information it receives regarding any
threatened or pending action by any Regulatory Authority which may affect the
safety or efficacy claims of the Product or the continued marketing of the
Product. Schering shall be responsible for [*] of Product covered by Health
Registrations and shall promptly inform RIBI of all reportable events of which
it becomes aware. Upon receipt of any such information, the parties shall [*].

   3.3 Pricing and Reimbursement Approvals. If applicable, Schering shall be
responsible for obtaining and maintaining any pricing and reimbursement
approvals required for the sale by Schering of the Product in the Territory.
RIBI shall provide information in its possession which may assist Schering upon
request by Schering.

   3.4 Governmental Inspections. Each party shall advise and provide a
reasonable description to the other party of any governmental visits to, or
written or oral inquiries about, any facilities or procedures for the [*] of
Product, [*] after the commencement of such visit or inquiry. Each party shall
furnish to the other party, (a) within [*] after receipt, any report or
correspondence issued by the governmental authority in connection with such
visit or inquiry, including but not limited to, any FDA Form 483, Establishment
Inspection Reports, warning letters, and (b) copies of any and all responses or
explanations relating to items set forth above, in each case [*].

   3.5 Labeling and Promotional Literature. Prescribing information and all
labeling copy, including all changes therein (including changes proposed by any
Regulatory Authority), to accompany the Product marketed by Schering shall be
determined by [*]. Schering is responsible for [*] for the Product, as well as
the promotional literature or advertising copy for the Product marketed by
Schering. Schering shall provide RIBI with [*]. Such [*], promotional literature
and advertising shall be in compliance with all relevant and applicable laws and
regulations. RIBI shall take any necessary action to authorize Schering or the
designated Schering Affiliate to make any communications with Regulatory
Authorities relating to Schering's promotion and advertising activities and the
parties shall cooperate with the other in such communications with Regulatory
Authorities on such matters.

   3.6 Notice of Adverse Reactions. Each party shall promptly report to the
other party any information regarding adverse events ("AEs") related to the use
of the Product in accordance with the Adverse Event Reporting Procedures (as may
be amended from time to time upon mutual agreement) set forth as Exhibit 3.6 and
incorporated herein by reference.

   3.7 Complaints. Schering and RIBI shall promptly notify each other of any
complaints associated with the Product (it being understood that the procedure
for AEs is governed by Section 3.6 above). RIBI SHALL have [*] to investigate
such complaints or AEs and to provide such information or assistance as
requested by RIBI. Schering shall be responsible for [*]. The parties shall
exchange reports on the resolution of complaints monthly during [*] and
thereafter shall exchange reports from time to time as appropriate and mutually
agreed. In the event the parties' expenses to undertake the activities described
in this paragraph result in, or may result in, [*].

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<PAGE>   11
   3.8 Recalls and Market Withdrawals.

       (a) If at any time (i) any governmental or regulatory authority in the
Territory issues a request, directive, or order that the Product be recalled or
withdrawn, or (ii) a court of competent jurisdiction orders such a recall or
withdrawal in the Territory, or (iii) either party determines in its sole
discretion that the Product should be recalled or withdrawn, the parties shall
take all appropriate corrective actions.

       (b) [*]

   3.9 Debarment. RIBI represents and warrants that it has not been debarred and
is not subject to debarment and that it will not use in any capacity, in
connection with the services to be performed under this Agreement, any person
who has been debarred pursuant to section 306 of the Federal Food, Drug, and
Cosmetic Act, 21 U.S.C. Section 335a, or who is the subject of a conviction,
described in such section. RIBI agrees to immediately inform Schering in writing
if it or any person who is performing services hereunder is debarred or is the
subject of a conviction described in section 306, or if any action, suit, claim,
investigation, or legal or administrative proceeding is pending or, to the best
of the RIBI's knowledge, is threatened, relating to the debarment or conviction
of the RIBI or any person performing services hereunder.

                                   ARTICLE IV
           MARKETING RIGHTS: EXCHANGE OF INFORMATION: DEVELOPMENT AND
                                COMMERCIALIZATION

   4.1 Marketing Rights. Upon the terms and conditions set forth herein, RIBI
hereby grants Schering exclusive rights of distribution of the Product in the
Territory. The distribution rights of Schering shall [*].

   4.2 Exchange of Information. During the term of this Agreement, RIBI shall
[*]. Such RIBI Know-How and other information shall be [*[*]. RIBI shall provide
[*].

   4.3 Development and Commercialization. Schering shall use [*].

   4.4 Excused Performance. In addition to the provisions of Article IX hereof,
the obligations of Schering with respect to [*] shall not excuse or delay the
obligation of Schering to make the Minimum Payment as provided for in Section
5.5 of this Agreement except as otherwise set forth in this Agreement

                                   ARTICLE V
                       PAYMENTS: SUPPLY PRICE AND REPORTS

   5.1 Consideration for Distribution Rights.

       (a) In consideration for the exclusive distribution rights granted herein
and subject to the terms and conditions contained herein, Schering shall pay to
RIBI [*] within [*] after the execution and delivery of this Agreement. If [*]
then [*].

       (b) The term "Defined Date" shall mean [*].

   5.2 Escrow. As soon as reasonably practicable following the Effective Date,
the parties shall enter into an escrow agreement ("Escrow Agreement") containing
the following terms and conditions:

       (a) [*]

       (b) [*]

       (c) [*]

       (d) [*]

   5.3 Milestone Payments. Subject to the terms and conditions contained in this
Agreement, Schering shall pay to RIBI the following milestone payments:

       (a) [*] upon [*]; and

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<PAGE>   12
       (b) [*] upon [*].

RIBI shall notify Schering in writing within [*] upon the achievement of each
milestone. Within [*] of such notice, Schering shall make payment of the
appropriate milestone amount in accordance with Section 5.6(b). The milestone
payment shall be payable [*].

   5.4 Supply Price.

       (a) Subject to the terms and conditions of this Agreement, Schering shall
pay to RIBI a supply price for Manufactured Melacine(R) melanoma theraccine for
commercial sale equal to [*]. Schering shall pay RIBI [*] for the Product
purchased within [*] after delivery and acceptance of each shipment of Product
by Schering; provided, [*].

       (b) RIBI may [*]. "Manufacturing cost" shall mean [*].

   5.5 Minimum Payments - Base Price/Margin Payment.

       (a) Commencing with [*] ("Commencement Date"):

           (i) for the [*];

           (ii) for the [*]; and

           (iii) for the [*].

       (b) When calculating said Minimum Payment [*]. Said Minimum Payment after
[*] shall be paid to RIBI [*]. Failure to make such Minimum Payment in a [*] and
RIBI shall have the [*].

   5.6 Reports; Method of Payment.

       (a) Within [*] following the close of each Calendar Quarter, following
the [*], Schering shall furnish to RIBI a written report for the Calendar
Quarter showing the Net Sales of Product sold by Schering and/or its Affiliates
in the Territory during such Calendar Quarter and the applicable Margin Payment
payable under this Agreement for such Calendar Quarter. Simultaneously with the
submission of the written report, in the event the Margin Payment is [*],
Schering shall pay to RIBI, for the account of Schering or the applicable
Affiliate a sum equal to [*] calculated in accordance with this Agreement [*].

       (b) Payments to be made by Schering to RIBI under this Agreement shall be
paid by check made to the order of RIBI or by bank wire transfer in immediately
available funds to such bank account in the United States designated in writing
by RIBI from time to time. All payments shall be in U.S. dollars.

   5.7 Maintenance of Records; Audits.

       (a) Schering shall keep complete and accurate records in sufficient
detail to enable the Margin Payments hereunder to be determined. Upon the
written request of RIBI and not more than once in each Calendar Year, Schering
shall permit an independent certified public accounting firm of nationally
recognized standing selected by RIBI and reasonably acceptable to Schering, at
RIBI's expense, to have access during normal business hours to such of the
records of Schering as may be reasonably necessary to verify the accuracy of the
Margin Payment reports hereunder for any year ending not more than [*] prior to
the date of such request and no later than [*] after written request is made.
The accounting firm shall disclose to RIBI only whether the Margin Payment
reports are correct or incorrect and the specific details concerning any
discrepancies. No other information shall be provided to RIBI.

       (b) If such accounting firm correctly concludes that an additional amount
is owed for the audit period, Schering shall pay the additional Margin Payment
within [*] of the date RIBI delivers to Schering such accounting firm's written
report so correctly concluding. The fees charged by such accounting firm shall
be paid by RIBI; provided, however, in the event that the additional amount owed
by Schering exceeds [*] of the total Base Price/Margin Payment owed RIBI for the
audit period, then Schering shall pay the fees charged by such accounting firm.

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<PAGE>   13
       (c) Upon the expiration of [*] following the end of any year, the
calculation of Base Price/Margin Payments with respect to such year shall be
[*].

       (d) RIBI shall treat all financial information subject to review under
this Section 5.7 in accordance with the confidentiality provisions of this
Agreement, and shall cause its accounting firm to enter into an acceptable
confidentiality agreement with Schering obligating it to retain all such
financial information in confidence pursuant to such confidentiality agreement.

   5.8 Income Tax Withholding. If at any time, any jurisdiction within the
Territory requires the withholding of income taxes or other taxes imposed upon
payments set forth in this Article V, Schering shall [*].

                                   ARTICLE VI
                                SUPPLY OF PRODUCT

   6.1 Supply of Schering's Requirements. Subject to the terms and conditions of
this Agreement, RIBI shall Manufacture and supply to Schering, and Schering
shall purchase from RIBI, Schering's Requirements of Product in the Territory.

   6.2 Forecasts/Purchase Order. Not less than [*] before RIBI is obligated to
deliver Product to Schering, Schering shall provide RIBI with a forecast
estimating Schering's [*] Requirements of the Product for the [*] period
beginning [*] from the date said initial forecast is provided to RIBI. With such
initial forecast, Schering shall also provide RIBI with a [*]. Thereafter, on a
[*] basis, Schering shall provide RIBI with an updated forecast for the
succeeding [*], accompanied by a [*] and so on during the term of this
Agreement. In the event the terms of any purchase order are inconsistent with
this Agreement, the terms of this Agreement shall prevail. By way of example and
not limitation, [*].

   6.3 Additional Quantities. In the event that Schering wishes to increase the
quantity of the Product ordered in a purchase order, then RIBI shall make [*] to
modify its production schedule so to deliver such additional quantities of
Product to Schering as [*].

   6.4 Stoppage Due to Good Cause. Upon Schering's written request, [*].

   6.5 Right of Rejection. Schering shall have the right to refuse delivery of
and or to reject within [*] of delivery to Schering of Product which fails to
comply with Product Specifications, GMP regulations or any other applicable
Regulatory Authority requirements, rules [*]. Product not rejected within said
[*] shall be deemed accepted by Schering. In the event rejected Product in fact
is noncompliant as set forth in this Section 6.5, RIBI shall [*].

   6.6 Scarcity of Materials. In the event RIBI notifies Schering that it is
unable to obtain, [*] the materials or supplies necessary to supply the Product
hereunder, then Schering [*].

   6.7 Returns. In the event Product is returned to Schering as [*] and is
otherwise [*] RIBI shall [*].

   6.8 Defective Product/Sample Analyses. In the event Product is returned to
Schering as [*], RIBI shall have the responsibility to [*]. Depending upon the
facts and circumstances surrounding the return of such Product and the outcome
[*], the matter shall be handled as provided for elsewhere herein, or if not
addressed elsewhere herein, the parties agree to discuss in good faith the
appropriate manner in which to proceed.

                                   ARTICLE VII
                          DELIVERY AND RELATED MATTERS

   7.1 Risk of Loss. Delivery of each order of Product shall be made [*]. RIBI
shall arrange for transportation of the Product to a destination designated by
Schering and by a common carrier designated by Schering. Title to and risk of
loss of the Product shall pass [*]. RIBI shall promptly invoice Schering for all
Product shipped. Invoices shall be accompanied by the certificate of analysis
[*].

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<PAGE>   14
   7.2 Schedule. RIBI shall deliver each shipment of the Product to the
designated common carrier pursuant to Section 7.1 hereof in accordance with the
schedule set forth in the relevant purchase order. RIBI shall in no event be
obligated to deliver Product in less than [*] from receipt of a firm written
purchase order.

   7.3 Storage. RIBI, at its own expense, shall maintain adequate facilities for
storage of the Product pending delivery to a carrier pursuant to Section 7.1
hereof.

   7.4 Warranty. RIBI warrants that, at the time of delivery of the Product to
the designated common carrier as provided for in Section 7.1 above, the Product
will [*].

                                  ARTICLE VIII
                   MANUFACTURING: REGULATORY MATTERS: RECORDS

   8.1 Specifications Amendments. RIBI may not amend and/or supplement the
Product Specifications without the written approval of Schering, which will not
be unreasonably withheld or delayed.

   8.2 RIBI Approvals. Except as otherwise specifically set forth herein, RIBI
shall be responsible for obtaining and maintaining all approvals from the
Regulatory Authorities and any other governmental authorities required in
connection with the performance of its obligations hereunder.

   8.3 Records. RIBI shall maintain all records necessary to comply with all
applicable laws, rules and regulations in the Territory and, if different, the
country of Manufacture of the Product. Specifically, but without limitation,
RIBI shall maintain all records reasonably necessary to support GMPs and other
applicable regulatory requirements in the Territory. All records shall be
available for inspection and audit by Schering and its representatives and
agents upon reasonable request during normal business hours. Schering shall have
the right to make copies of any records relevant to and in connection with any
litigation in which it is a party relating to Product. All such records shall be
maintained for such period as may be required by law, rule or regulation;
provided, however, that all records relating [*] shall be retained at least
until the [*] of the end of the approved shelf life for all Product.

   8.4 Facility Compliance and Related Matters. RIBI [*] maintain the Approved
Facility in compliance with all applicable laws, rules and regulations,
including GMPs, at all times during the term of this Agreement. RIBI shall be
responsible for all costs and expenses related to the compliance of the Approved
Facility with such laws, rules and regulations. RIBI agrees to Manufacture the
Product at an Approved Facility.

   8.5 Quality Control Program. RIBI shall maintain a quality control program
consistent with GMPs, as required by the applicable Regulatory Authorities in
the Territory and, if different, the country of Manufacture of the Product. RIBI
shall provide Schering with a written description of such program, as amended or
supplemented, from time to time.

   8.6 Approval for Manufacturing Changes: Third Party Manufacturing. RIBI
agrees not to make changes in any materials, equipment or methods of production
or testing used in the Manufacture of the Product that would affect Health
Registrations or Product without Schering's prior written approval, which will
not be unreasonably withheld or delayed. RIBI shall notify Schering promptly of
any such changes that may be required by GMPs or other applicable law, rule or
regulation in the Territory or the country of Manufacture. RIBI agrees not to
[*] without the prior written consent of Schering, which shall not be
unreasonably withheld. Manufacture of Product shall comply with all of the
representations and warranties given by RIBI in this Agreement.

   8.7 Retention of Samples. RIBI shall retain a sufficient quantity of each lot
of Product to perform confirmatory control testing and stability testing. RIBI
shall maintain samples of each lot in a suitable storage facility until at least
the [*] of the end of the approved shelf life of all Product from such lot, or
such longer period as may be required under applicable law, regulation or rule.
All such samples shall be available for inspection by Schering upon reasonable
notice.

   8.8 Lot Failure. RIBI agrees to notify Schering within [*] of discovery of
any lot failure which could result in RIBI's inability to fulfill Schering's
purchase orders in a timely manner. RIBI agrees to notify Schering within [*] of
any failure of a released batch lot during stability testing, which stability
testing shall be conducted by RIBI.

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<PAGE>   15
   8.9 Inspection by Schering. Schering shall have the right, during normal
business hours and with reasonable advance notice, to visit the Approved
Facility for the purpose of observing the manufacturing, packaging, testing, and
storage of the Product, and to inspect for compliance with GMPs and other
applicable regulatory requirements.

   8.10 Environmental and Other Laws and Regulations. In carrying out its
obligations under this Agreement, RIBI shall have sole responsibility for
compliance with all applicable environmental and health and safety laws, as
amended from time to time (the "Laws"). RIBI represents and warrants that [*].
RIBI shall [*] notify Schering [*] of any event, including [*] give rise to
liability on the part of RIBI under the Laws. Schering reserves the right to
conduct an environmental inspection of RIBI's facility, during normal business
hours and with reasonable advance notice, for the purpose of determining
compliance with this Section 8.10. Schering shall share the results of any such
environmental inspection with RIBI. Such inspection, if any, shall not relieve
RIBI of its sole obligation to comply with the Laws and does not constitute a
waiver of any right otherwise available to Schering.

                                   ARTICLE IX
                                  FORCE MAJEURE

   9.1 Force Majeure. Failure of either party hereto to perform its obligations
under this Agreement (except the obligation to make payments when due) shall not
subject such party to any liability to the other party or place it in breach of
any term or condition of this Agreement if such failure is caused by any cause
beyond the reasonable control of such non-performing party, including without
limitation acts of God, fire, explosion, flood, drought, war, riot, sabotage,
embargo, strikes or other labor trouble, failure of suppliers to deliver on
schedule materials, equipment or machinery, interruption of or delay in
transportation, a national health emergency, or compliance with any order or
regulation of any government entity acting with color of right; provided,
however, that the party affected shall promptly notify the other party of the
condition constituting force majeure as defined herein and shall exert
reasonable efforts to overcome any such causes and to resume performance of its
obligations with all possible speed. If a condition constituting force majeure
as defined herein exists for more than [*], the parties shall meet to negotiate
a mutually satisfactory solution to the problem, if practicable.

                                    ARTICLE X
                                     PATENTS

   10.1 Filing, Prosecution and Maintenance of Patents. RIBI agrees to maintain
in the Territory, the existing Patent Rights owned in whole or in part by RIBI
and covering the Product. RIBI shall keep Schering advised of the status of the
actual and prospective patent filings (including, without limitation, the grant
of any Patent Rights) and upon the request of Schering, provide advance copies
of any papers related to the maintenance of such Patent Rights.

   10.2 Option of Schering to Prosecute and Maintain Patents. RIBI shall give
notice to Schering of any desire to cease prosecution and/or maintenance of
Patent Rights and, in such case, shall permit Schering, at its sole discretion,
to continue prosecution or maintenance at its own expense. If Schering elects to
continue prosecution or maintenance, RIBI shall execute such documents and
perform such acts as may be reasonably necessary for Schering to perform such
prosecution or maintenance.

   10.3 Enforcement

       10.3.1 Notice and Discontinuance of Infringement. In the event that
Schering becomes aware of infringement in the Territory of any issued patent
within the Patent Rights, Schering will notify RIBI in writing to that effect,
including with said written notice evidence to support an allegation of
infringement by such third party. In the event RIBI concurs infringement is
occurring, RIBI shall have [*] from the date of said notice to obtain a
discontinuance of such infringement or to bring suit against the third party
infringer. [*] Schering shall have the contractual right, prior to commencement
of the trial, suit or action brought by RIBI, to join any such suit or action,
and in such event shall [*]. In the event that Schering has joined in the action
and [*]. In the event that Schering has not joined the suit or action, Schering
[*].

       10.3.2 Continuance of Infringement. If [*] RIBI has not [*], then RIBI
and Schering agree to [*]. In addition, Schering shall have the right, but not
the obligation, to bring suit against such infringer under the Patent Rights and
join RIBI as a party plaintiff, provided that Schering shall [*]. RIBI shall
cooperate with Schering in any suit for infringement of a Patent Right brought
by Schering

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<PAGE>   16
against a third party, and shall have the right to consult with Schering and to
participate in and be represented by independent counsel in such litigation [*].
In the event that Schering recovers any sums in such litigation by way of
damages or in settlement thereof, [*].

   10.4 Certification Under Drug Price Competition and Patent Term Restoration
Act. RIBI and Schering each shall immediately give notice to the other of any
certification of which they become aware filed under the United States "Drug
Price Competition and Patent Term Restoration Act of 1984" claiming that Patent
Rights covering Melacine(R) or Product are invalid or that infringement will not
arise from the Manufacture, use, import, export, offer to sell or sale of
Melacine(R) or Product by a third party. If RIBI or Schering (depending on which
party is defending the Patent Rights) decides not to bring infringement
proceedings against the entity making such a certification, such party shall
give notice to the other party of its decision not to bring suit within
twenty-one (21) days after receipt of notice of such certification. The party
receiving such notice may then, but is not required to, bring suit against the
party that filed the certification. Any suit by Schering or RIBI shall either be
in the name of Schering or in the name of RIBI, or jointly by Schering and RIBI.
For this purpose, the party not bringing suit shall execute such legal papers
necessary for the prosecution of such suit as may be reasonably requested by the
party bringing suit.

   10.5 Abandonment. RIBI shall promptly give notice to Schering, and in no case
later than [*] prior to [*] of any Patent Rights licensed to Schering for which
RIBI is responsible for the filing, prosecution and maintenance.

   10.6 Patent Term Restoration. The parties hereto shall cooperate with each
other in obtaining patent term restoration or supplemental protection
certificates or their equivalents in the Territory where applicable to Patent
Rights.

   10.7 Notices. All notices, inquiries and communications in connection with
this Article X shall be sent to:

   If to RIBI:

   Ronald H. Kullick, Esq.
   Vice President, Legal Counsel
   Ribi ImmunoChem Research, Inc.
   553 Old Corvallis Road
   Hamilton, MT 59840

   If to Schering:

   Schering Corporation
   2000 Galloping Hill Road
   Kenilworth; New Jersey 07033
   Attn: Staff Vice President and Associate General
   Counsel, Patents and Trademarks


                                   ARTICLE XI
                         CONFIDENTIALITY AND PUBLICATION

   11.1 Nondisclosure Obligation. RIBI and Schering shall use only in accordance
with this Agreement and shall not disclose to any third party any Proprietary
Information of the other party, without the prior written, consent of the other
party. The foregoing obligations shall survive the expiration or termination of
this Agreement for a period of [*]. These obligations shall not apply to
Proprietary Information that, when taken as a whole and considered in the
context disclosed:

       (a) is known by the receiving party at the time of its receipt; and not
through a prior confidential disclosure by the disclosing party, as documented
by business records;

       (b) is at the time of disclosure or thereafter becomes published or
otherwise part of the public domain other than due to the breach of this
Agreement by the receiving parry;

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<PAGE>   17
       (c) is subsequently disclosed to the receiving party by a third party who
has the right to make such disclosure;

       (d) is developed by the receiving party independently of Proprietary
Information or other information received from the disclosing party and such
independent development can be properly demonstrated by the receiving party;

       (e) is disclosed to governmental or other regulatory agencies in order to
obtain patents or to gain approval to conduct clinical trials or to market
Product, but such disclosure may be only to the extent reasonably necessary to
obtain such patents or authorizations; and further provided that the disclosing
party shall take such steps as may be available to obtain confidential treatment
of the information disclosed.

       (f) is necessary to be disclosed by [*]; or

       (g) is required to be disclosed by law or court order, provided that
notice is promptly delivered to the other party in order to provide an
opportunity to seek a protective order or other similar order with respect to
such Proprietary Information and the disclosing party thereafter discloses only
the minimum information required to be disclosed in order to comply with the
request, whether or not a protective order or other similar order is obtained by
the other party.

   Nothing herein shall be interpreted to prohibit either party from publishing
the results of its studies in accordance with this Agreement and industry
practices.

   11.2 No Publicity. A party may not use the name of the other party in any
publicity or advertising and may not issue a press release or otherwise
publicize or disclose any information related to this Agreement or the terms or
conditions hereof without the prior written consent of the other party. Nothing
in the foregoing, however, shall prohibit a party from making such disclosures
to the extent deemed necessary under applicable federal or state securities laws
or any rule or regulation of any nationally recognized securities exchange; in
such even, however, the disclosing party shall use good faith efforts to consult
with the other party prior to such disclosure and, where applicable, shall
request confidential treatment to the extent available.

   11.3 Publication. During the term of this Agreement RIBI and Schering each
acknowledges the other's interest in publishing its results to obtain
recognition within the scientific community and to advance the state of
scientific knowledge, however, each party also recognizes the mutual interest in
obtaining valid patent protection and in protecting business interests and trade
secret information. Accordingly, no publication that contains any information of
the other party that has not previously been publicly disclosed by the other
party may be made without written consent of the other party. In the event
either party, its employees or consultants wish to make a publication covering
the Product, the party proposing publication shall deliver to the other party a
copy of the proposed written publication or an outline of an oral disclosure at
least [*] prior to submission for publication or presentation. The reviewing
party shall have the right (a) to propose modifications to the publication or
prohibit for patent reasons, trade secret reasons or business reasons or (b) to
request a reasonable delay in publication or presentation in order to protect
patentable information. If the reviewing party requests a delay, the publishing
party shall delay submission or presentation for a period of [*] to enable
patent applications protecting each party's rights in such information to be
filed. If the reviewing party requests modifications to the publication, the
publishing party shall edit such publication to prevent disclosure or trade
secret or proprietary business information prior to submission of the
publication or presentation. If the reviewing party prohibits publication, the
publishing party shall not publish the publication during the term of this
Agreement, and thereafter, may only publish after the reviewing party has
confirmed in writing that the publication does not contain any proprietary
information of the reviewing party.

                                   ARTICLE XII
                         REPRESENTATIONS AND WARRANTIES.

   12.1 Representations and Warranties of Each Party. Each of RIBI and Schering
hereby represents, warrants and covenants to the other party hereto as follows:

       (a) it is a corporation duly organized and validly existing under the
laws of the state or other jurisdiction of incorporation or formation;

       (b) the execution, delivery and performance of this Agreement by such
party has been duly authorized by all requisite corporate action and approvals;


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<PAGE>   18
       (c) it has the power and authority to execute and deliver this Agreement
and to perform its obligations hereunder including, without limitation, the
right, power and authority to grant the distribution rights under Article IV and
supply Product under Article VI;

       (d) the execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions hereof does not and
will not conflict with or result in a breach of any of the terms and provisions
of or constitute a default under (i) a loan agreement, guaranty, financing
agreement, agreement affecting a product or other agreement or instrument
binding or affecting it or its property; (ii) the provisions of its charter
documents or bylaws; or (iii) any order, writ, injunction or decree of any court
or governmental authority entered against it or by which any of its property is
bound;

       (e) except for the governmental and regulatory approvals required to
market the Product in the Territory, the execution, delivery and performance of
this Agreement by such party does not require the consent, approval or
authorization of, or notice, declaration, filing or registration with, any
governmental or regulatory authority and the execution, delivery or performance
of this Agreement will not violate any law, rule or regulation applicable to
such party;

       (f) this Agreement constitutes such party's legal, valid and binding
obligation enforceable against it in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to the availability
of particular remedies under general equity principles; and

       (g) it shall comply with all applicable material laws and regulations
relating to its activities under this Agreement.

   12.2 RIBI's Representations. RIBI hereby represents, warrants and covenants
to Schering as follows:

       (a) [*];

       (b) [*];

       (c) [*];

       (d) [*];

       (e) [*];

       (f) [*];

       (g) [*];

       (h) [*];

       (i) [*];

       (j) [*];

       (k) [*];

       (l) [*];

       (m) [*].

   12.3 Continuing Representations. The representations and warranties of each
Party contained in Sections 12.1 and 12.2 shall survive the execution of this
Agreement. In the event facts or circumstances occur that affect the
representations made herein, the party who has knowledge of such facts or
circumstances shall notify the other party of same.

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   12.4 No Inconsistent Agreements. Neither party has in effect and after the
Effective Date neither party shall enter into any oral or written agreement or
arrangement that would be inconsistent with its obligations under this
Agreement.


                                  ARTICLE XIII
                   INDEMNIFICATION AND LIMITATION ON LIABILITY

   13.1 Indemnification by Schering. Schering shall indemnify, defend and hold
harmless RIBI and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, a "RIBI Indemnified Party")
from and against any and all liability, loss, damage, cost, and expense
(including reasonable attorneys' fees), subject to the limitations in Section
13.5 (collectively, a "Liability") which the RIBI Indemnified Party may incur,
suffer or be required to pay resulting from or arising in connection with [*].

   13.2 Indemnification by RIBI. RIBI shall indemnify, defend and hold harmless
Schering and its Affiliates, and each of its and their respective employees,
officers, directors and agents (each, a "Schering Indemnified Party") from and
against any Liability which the Schering Indemnified Party may incur, suffer or
be required to pay resulting from or arising in connection with [*].

   13.3 Conditions to Indemnification. The obligations of the indemnifying party
under Sections 13.1 and 13.2 are conditioned upon the delivery of written notice
to the indemnifying party of any potential Liability promptly after the
indemnified party becomes aware of such potential Liability. The indemnifying
party shall have the obligation to assume the defense of any suit or claim
related to the Liability for which it is obligated to indemnify hereunder;
however, if in the reasonable judgment of the indemnified Party, such suit or
claim involves an issue or matter which could have a materially adverse effect
on the business operations or assets of the indemnified party, the indemnified
party may waive its rights to defense under this Agreement and control the
defense or settlement thereof, but in no event shall any such waiver be
construed as a waiver of any indemnification rights such party may have under
this Agreement, at law or in equity. If the indemnifying party defends the suit
or claim, the indemnified party may participate in (but not control) the defense
thereof at its sole cost and expense.

   13.4 Settlements. Neither party may settle a claim or action related to a
Liability without the consent of the other party, if such settlement would [*].
Any payment made by a party to settle any such claim or action shall [*].

   13.5 Limitation of Liability. With respect to any claim by one party against
the other arising out of the performance or failure of performance of the other
party under this Agreement, the parties expressly agree that the liability of
such party to the other party for such breach shall be limited under this
Agreement or otherwise at law or equity to direct damages only and in no event
shall a party be liable for, punitive, exemplary or consequential damages.

   13.6 Insurance. Each party acknowledges that they each maintain and shall,
during the term of this Agreement, maintain adequate insurance (a minimum of [*]
per claim liability insurance including products coverage, with respect to RIBI)
and/or a self-insurance program (with respect to Schering) for liability
insurance, including products liability and contractual liability insurance,
adequately covering such party's obligations under this Agreement. Each party
shall provide the other with evidence of such insurance, upon request.

                                   ARTICLE XIV
                              TERM AND TERMINATION

   14.1 Term and Expiration. This Agreement shall be effective as of the
Effective Date and unless terminated earlier pursuant to Sections 5.1, 14.2 or
14.3 below, the term of this Agreement shall continue in effect until the later
of (i) expiration of the last to expire Patent Right or (ii) ten (10) years from
First Commercial Sale of Product.

   14.2 Termination by Schering. Notwithstanding anything contained herein to
the contrary, Schering shall have the right to unilaterally terminate this
Agreement, with or without cause, at any time by giving [*] advance written
notice to RIBI. In the event of such termination, the rights and obligations
hereunder of both parties, including any payment obligations not due and owing
as of the termination date, shall terminate and all distribution rights shall
revert to RIBI.

   14.3 Termination.

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<PAGE>   20
       14.3.1 Termination for Cause. This Agreement may be terminated by notice
by either party at any time during the term of this Agreement:

           (a) if the other party is in breach of its material obligations
hereunder and has not cured or taken substantial steps to cure such breach
within [*] after the non-breaching party delivers to the breaching party notice
of the breach with reasonable detail of the particulars of the alleged breach;
or

           (b) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the other party, or in the
event a receiver or custodian is appointed for such party's business or a
substantial portion of such party's business is subject to attachment or similar
process; provided, however, in the case of any involuntary bankruptcy proceeding
such right to terminate shall only become effective if the party consents to the
involuntary bankruptcy or such proceeding is not dismissed within [*] after the
filing thereof.

   14.4 Effect of Termination. Expiration or termination of the Agreement shall
not relieve the parties of any obligation accruing prior to such expiration or
termination, and the provisions of Article XI and XIII shall survive the
expiration of the Agreement and shall continue in effect for [*] or the
applicable statute of limitations, whichever is longer, but only with respect to
events that occurred while this Agreement was in force and effect. Any
expiration or early termination of this Agreement shall be without prejudice to
the rights of either party against the other accrued or accruing under this
Agreement prior to termination, including the obligation to pay the supply price
for Product(s) ordered prior to such termination.

                                   ARTICLE XV
                                   TRADEMARKS

   15.1 Trademark. The trademark, Melacine(R) melanoma theraccine, is a
registered trademark in the Territory. RIBI agrees for the term of this
Agreement to maintain the registration of Trademark in the Territory. Schering
shall have the right to use such trademark in connection with the exclusive
distribution, advertising, marketing and promotion of the Product. Schering
shall include on all labels for Product distributed by it under this Agreement
an indication of the ownership of Trademark by RIBI by means of the following
legend, or by the means of such other appropriate legend or designation as may
be prescribed by RIBI: "Distributed by Schering Corporation under a trademark
owned by RIBI ImmunoChem Research, Inc."

   15.2 Infringement. Both parties shall promptly notify the other party in
writing of all cases of potential infringement or infringement of Trademark in
the Territory, including with said notice evidence to support an allegation of
infringement by such third party. In the event Schering utilizes Trademark in
connection with the marketing, distribution and/or sale of Product, RIBI shall
take reasonable steps to prosecute the infringement of the Trademark or to
defend the right to use the Trademark, as the case may be, in the Territory.
RIBI shall keep Schering advised of the status of such litigation and shall
consult with RIBI with respect to all major decisions impacting the litigation
relating to the Trademark.

   15.3 Limit on RIBI Use and Grant of Trademarks. RIBI shall not use or grant
to any third party the right to use any trademark in the Territory which is, in
the reasonable opinion of Schering, [*].

                                   ARTICLE XVI
                                  MISCELLANEOUS

   16.1 Assignment. Neither this Agreement nor any or all of the rights and
obligations of a party hereunder may or shall be assigned, delegated, sold,
transferred, sublicensed (except as otherwise provided herein) or otherwise
disposed of, except by operation of law, to any third party other than an
Affiliate of such party, without the prior written consent of the other party,
except when such disposition, etc., is in connection with the purchase or
acquisition by a third party of all or substantially all of the assets of a
party hereto, and any attempted assignment, delegation, sale, transfer,
sublicense or other disposition of this Agreement or of any rights or
obligations hereunder contrary to this Section 16.1 shall be a material breach
of this Agreement by the attempting party, and shall be void and without force
or effect; provided; however, Schering may, without such consent, assign the
Agreement and its rights and obligations hereunder to an Affiliate or in
connection with the transfer or sale of all or substantially all of its assets
related to the division or the subject business, or in the event of its merger
or consolidation or change in control or similar transaction. This Agreement
shall be

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<PAGE>   21
binding upon, and inure to the benefit of, each party, its Affiliates, and its
permitted successors and assigns. Each party shall be responsible for the
compliance by its Affiliates with the terms and conditions of this Agreement.

   16.2 Governing Law and Jurisdiction. Except for disputes under Article X
which will be governed by Federal law, this Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey without regard
to the conflict of laws provisions thereof and the exclusive jurisdiction and
venue of any action with respect to this Agreement shall be in a state court of
the State of New Jersey. Each of the parties hereto agrees to submit to the
exclusive jurisdiction and venue of such court for the purpose of any such
action. Service of process in any such action may be effected in the manner
provided in Section 16.6 for delivery of notice or in any other manner
consistent with New Jersey law. In the event that a state court holds that an
action cannot be brought and maintained in a state court, then such action may
be brought in any court having proper jurisdiction.

   16.3 Waiver. Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.

   16.4 Independent Relationship. Nothing herein contained shall be deemed to
create an employment, agency, joint venture or partnership relationship between
the parties hereto or any of their agents or employees, or any other legal
arrangement that would impose liability upon one party for the act or failure to
act of the other party. Neither party shall have any power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other party, or to bind the other party in any respect
whatsoever.

   16.5 Entire Agreement; Amendment. This Agreement, including the Exhibits and
Schedules hereto, sets forth the complete, final and exclusive agreement and all
the covenants, promises, agreements, warranties, representations, conditions and
understandings between the parties hereto and supersedes and terminates all
prior agreements, writings and understandings between the parties. There are no
covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the parties other than as are
set forth herein and therein. No terms or provisions of this Agreement shall be
varied or modified and no subsequent alteration, amendment, change or addition
to this Agreement shall be binding upon the parties unless reduced to writing
and signed by an authorized officer of each party.

   16.6 Notices. Each notice required or permitted to be given or sent under
this Agreement shall be given by facsimile transmission (with confirmation copy
by registered first class mail) or by registered or overnight courier (return
receipt requested), to the parties at the addresses and facsimile numbers
indicated below.

   If to RIBI, to:

   Ribi ImmunoChem Research, Inc.
   553 Old Corvallis Road
   Hamilton, Montana 59840-3131
   Attention: President
   Facsimile No.: (406)363-6129

   If to Schering, to:

   Schering-Plough Corporation
   2000 Galloping Hill Road
   Kenilworth, New Jersey 07033
   Attention: Vice President Business Development
   Facsimile No.: (908)298-5379

   with copies to:

   Schering Corporation
   2000 Galloping Hill Road
   Kenilworth, New Jersey 07033


                                       21


<PAGE>   22
   Attention: Law Department- Senior Director, Licensing
   Facsimile No.:(908)298-2739

Any such notice shall be deemed to have been received on the earlier of the date
actually received or the date five (5) days after the same was posted or sent.
Either party may change its address or its facsimile number by giving the other
party written notice, delivered in accordance with this Section.

   16.7 Severability. If any provision of this Agreement is declared valid or
unenforceable by a court having competent jurisdiction, it is mutually agreed
that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court; provided, however, that in the event that
the terms and conditions of this Agreement are materially altered the parties
will, in good faith, renegotiate the terms and conditions of this Agreement to
reasonably substitute such invalid or unenforceable provision in light of the
intent of this Agreement.

   16.8 Recording. Each party shall have the right, at any time, to record,
register, or otherwise notify this Agreement in appropriate governmental or
regulatory offices anywhere in the Territory, and RIBI or Schering, as the case
may be, shall provide reasonable assistance to the other in effecting such
recording, registering or notifying.

   16.9 Further Action. Each party agrees to execute, acknowledge and deliver
such further instruments and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

   16.10 Counterparts. This Agreement shall become binding when anyone or more
counterparts hereof, individually or taken together, shall bear the signatures
of each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against either party whose
signature appears thereon, but all of which taken together shall constitute but
one and the same instrument.

   IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

                                                            [LEGAL REVIEW STAMP]

RIBI IMMUNOCHEM RESEARCH, INC.                        SCHERING CORPORATION

By:  /s/ ROBERT E. IVY                                By:  /s/ DAVID POORVIN

Title:  C.E.O. President and Chairman                 Title:  Vice President


                                       22


<PAGE>   23
                                  SCHEDULE 1.17
                                  PATENT RIGHTS
                                 ---------------


<TABLE>
<CAPTION>
COUNTRY              PATENT NO.             EXPIRATION DATE
-------              ----------             ---------------
<S>                  <C>                    <C>
   [*]

</TABLE>

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                                       23


<PAGE>   24
                                  SCHEDULE 1.19
                             PRODUCT SPECIFICATIONS
                                 ---------------

PRODUCT DESCRIPTION: MELACINE(R) MELANOMA THERACCINE

[*]

MPL(R): TESTS, METHODS, SPECIFICATIONS AND RATIONALE

[*]

[*]

CWS: TESTS, METHODS, SPECIFICATIONS AND RATIONALE

[*]

MELANOMA LYSATE: TESTS, METHODS AND SPECIFICATIONS
[*]

* Performed by Bionique Testing Laboratories, Inc., Saranac Lake, NY, USA

DETOX(TM): TESTS, METHODS AND SPECIFICATIONS
[*]

MELACINE(R): TEST METHODS AND SPECIFICATIONS
[*]

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                                       24


<PAGE>   25
                                   EXHIBIT 3.6

            ADVERSE EVENT REPORTING PROCEDURES FOR LICENSED PRODUCTS
[*]

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                                       29