DESIGNATED ACCORDING TO
2
THE CRITERIA IN EXHIBIT 2.4 AS "DEVELOPMENT CANDIDATES" AS WELL AS ANY
MODIFICATIONS THEREOF DURING ANY DEVELOPMENT PROCESS THEREAFTER.
1.9
"DEVELOPMENT COSTS" SHALL MEAN ALL INTERNAL
(DIRECT AND INDIRECT) AND THIRD PARTY EXPENSES INCURRED BY EPIX IN CONNECTION
WITH THE RESEARCH PROGRAM, OR BY SCHERING FOLLOWING EXERCISE OF THE SCHERING
OPTION, DETERMINED IN A REASONABLE MANNER IN ACCORDANCE WITH GAAP.
SUCH
EXPENSES INCLUDE, BUT ARE NOT LIMITED TO (I) DIRECT LABOR (SALARIES, WAGES,
INCENTIVE AWARDS AND EMPLOYEE BENEFITS BUT EXCLUDING ANY EMPLOYEE BENEFITS
ASSOCIATED WITH EQUITY INCENTIVE PLANS); (II) MATERIALS AND SUPPLIES; (III)
ALLOCATED COSTS FOR BUILDING SPACE DIRECTLY DEDICATED TO THE DEVELOPMENT OF THE
LEAD COMPOUNDS, DEVELOPMENT CANDIDATES AND/OR LICENSED PRODUCTS (INCLUDING RENT,
DEPRECIATION, AMORTIZATION AND MAINTENANCE) BUT EXCLUDING EXPENSES RELATING TO
UNUSED CAPACITY, DEVELOPMENT OF OTHER PRODUCTS, AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT NOT DIRECTLY RELATED TO DEVELOPMENT OF LEAD COMPOUNDS,
DEVELOPMENT CANDIDATES AND/OR LICENSED PRODUCTS; (IV) THIRD PARTY CONTRACTS AND
CONSULTING EXPENSES INCURRED FOR SERVICES IN CONNECTION WITH THE DEVELOPMENT OF
LEAD COMPOUNDS, DEVELOPMENT CANDIDATES AND/OR LICENSED PRODUCTS; (V) ALLOCATED
COSTS FOR INFORMATION TECHNOLOGY DIRECTLY DEDICATED TO THE DEVELOPMENT OF THE
LEAD COMPOUNDS, DEVELOPMENT CANDIDATES AND/OR LICENSED PRODUCTS; AND (VI) TRAVEL
AND ENTERTAINMENT, TELEPHONE, RECRUITING, TRAINING (BOTH INTERNAL AND EXTERNAL),
CLINICAL TRIAL INSURANCE, SOFTWARE, PERSONAL COMPUTER EQUIPMENT AND SUPPORT
COSTS AND FREIGHT AND DELIVERY EXPENSES. SUCH COSTS SHALL NOT INCLUDE GENERAL
AND ADMINISTRATIVE EXPENSES OR EXPENSES INCURRED FROM DEPARTMENTS THAT ARE NOT
DIRECTLY ENGAGED IN THE DEVELOPMENT OF THE LEAD COMPOUNDS, DEVELOPMENT
CANDIDATES AND/OR LICENSED PRODUCTS INCLUDING, BUT NOT LIMITED TO, FINANCE AND
PROCUREMENT, CORPORATE ADMINISTRATION, LEGAL (BOTH EXTERNAL AND INTERNAL
EXPENSES), HUMAN RESOURCES, BUSINESS DEVELOPMENT AND LICENSING, SALES AND
MARKETING EXCEPT FOR COSTS OF INVESTOR RELATIONS.
Development activities for which Development Costs are incurred include but are
not limited to pre-clinical and clinical work (Phase I-IV trials (such Phase IV
trials to be intended to support approval of an NDA, MAA or a supplement or
amendment thereto, required as a condition of approval of an NDA, MAA or a
supplement or amendment thereto, or required to support continued approval of an
NDA, MAA or a supplement or amendment thereto), regulatory filings, Cost of
compound for pre-clinical and clinical work (Phase I-IV trials, as described
above in this sentence), and all Costs of Lead Compounds, Development Candidates
and/or Licensed Products related to regulatory filings in the Territory
including CMC Costs.
1.10
"EFFECTIVE DATE" HAS THE MEANING SET FORTH IN THE
INTRODUCTORY PARAGRAPH.
1.11
"EPIX BACKGROUND TECHNOLOGY" MEANS COLLECTIVELY
ALL EPIX PATENT RIGHTS AND EPIX KNOW-HOW.
1.12
"EPIX OPTION" HAS THE MEANING SET FORTH IN
SECTION 4.2.
1.13
"EPIX PATENT RIGHTS" MEANS THE PATENT RIGHTS,
CONTROLLED BY EPIX AND HAVING CLAIMS COVERING EPIX KNOW-HOW, WHICH ARE ALREADY
IN EXISTENCE PRIOR TO THE EFFECTIVE DATE, AS IDENTIFIED ON EXHIBIT 1.13 HERETO
OR FILED THEREAFTER.
3
1.14
"EPIX KNOW-HOW" MEANS ALL KNOW-HOW USEFUL IN THE
FIELD THAT IS: (A) CONTROLLED BY EPIX IMMEDIATELY PRIOR TO THE EFFECTIVE DATE,
OR (B) DEVELOPED OR CONCEIVED