AS [*****] OR [*****]
2.4
DISCOVERY OF LEAD COMPOUNDS.
THE INITIAL
WORK UNDER THE RESEARCH PROGRAM WILL BE FOCUSED ON THE DISCOVERY OF COMPOUNDS
MEETING CRITERIA SET FORTH IN EXHIBIT 2.4A.
UPON PROPOSAL OF THE RELEVANT
PROJECT TEAM THE MANAGEMENT TEAM SHALL SUBMIT THE MOST PROMISING COMPOUNDS TO
THE RSC FOR DESIGNATION AS "LEAD COMPOUNDS" IN ACCORDANCE WITH THE CRITERIA SET
FORTH IN EXHIBIT 2.4 A.
LEAD COMPOUNDS WILL UNDERGO ADDITIONAL LEAD
OPTIMIZATION EFFORTS IN ORDER TO MEET THE CRITERIA IDENTIFIED ON EXHIBIT 2.4 B.
UPON PROPOSAL OF THE RELEVANT PROJECT TEAM, THE MANAGEMENT TEAM SHALL DECIDE
UPON SUBMISSION OF A LEAD COMPOUND TO THE RSC FOR DESIGNATION AS A DEVELOPMENT
CANDIDATE. IF IT HAS BEEN SUBMITTED BY THE MANAGEMENT TEAM AND THE RSC HAS
POSITIVELY DECIDED TO DESIGNATE THE LEAD COMPOUND AS A DEVELOPMENT CANDIDATE,
THE RSC SHALL PROVIDE WRITTEN NOTICE TO SCHERING AND EPIX WITH ITS DECISION (THE
"DESIGNATION NOTICE").
IT IS UNDERSTOOD THAT THE SCHERING MEMBERS ON THE RSC
HAVE THE AUTHORITY TO RENDER ANY DECISION HEREUNDER ONLY AFTER AN INTERNAL
REVIEW AND APPROVAL PROCESS FOR
10
ANY LEAD COMPOUND OR DEVELOPMENT CANDIDATE AT SCHERING. SUCH REVIEW PROCESS
SHALL BE INITIATED BY A SCHERING RSC OR MANAGEMENT TEAM MEMBER AS SOON AS
POSSIBLE AND SHALL IN ANY CASE BE FINISHED WITHIN NINETY (90) DAYS AFTER
SUBMISSION OF A LEAD COMPOUND OR DEVELOPMENT CANDIDATE TO THE RSC BY THE
MANAGEMENT TEAM.
3.
RESEARCH FUNDING
3.1
PAYMENTS BY SCHERING.
IN
CONSIDERATION OF
THE PERFORMANCE BY EPIX OF THE RESEARCH PROGRAM, SCHERING SHALL MAKE
PAYMENTS
TO EPIX IN THE AGGREGATE AMOUNT OF $[*****] (= $[*****] PER FTE) FOR EACH TWELVE
(12) MONTH PERIOD DURING THE RESEARCH PROGRAM TERM.
SUCH ANNUAL PAYMENT SHALL
BE MADE IN EQUAL QUARTERLY INSTALLMENTS WITH THE FIRST SUCH PAYMENT BEING DUE
AND PAYABLE WITHIN TEN (10) BUSINESS DAYS OF THE EFFECTIVE DATE AND WITH
SUBSEQUENT PAYMENTS BECOMING DUE AND PAYABLE EVERY THREE (3) MONTHS THEREAFTER
DURING THE RESEARCH PROGRAM TERM.
THE ANNUAL PAYMENT SHALL BE REDUCED
ACCORDINGLY IF AND WHENEVER EPIX REDUCES ITS COMMITTED FTES IN ACCORDANCE WITH
SECTION 2.2.2.
3.2
LOAN BY SCHERING TO EPIX.
SCHERING SHALL
PROVIDE A LOAN OF UP TO $15,000,000 TO EPIX IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THE LOAN AGREEMENT AND THE SECURITY AGREEMENT, COPIES OF
WHICH ARE ATTACHED HERETO AS EXHIBIT 3.2A AND EXHIBIT 3.2B RESPECTIVELY.
4.
OPTION RIGHTS FOR DEVELOPMENT
CANDIDATES AND JOINT TECHNOLOGY
4.1
SCHERING LICENSE OPTION.
4.1.1
OPTION GRANT.
EPIX HEREBY GRANTS TO SCHERING THE
EXCLUSIVE RIGHT AND OPTION (THE "SCHERING OPTION") TO OBTAIN AN EXCLUSIVE
LICENSE UNDER THE TERMS SET FORTH IN SECTION 7 TO DEVELOP AND COMMERCIALIZE
PRODUCTS BASED UPON, DERIVED FROM OR INCORPORATING A DEVELOPMENT CANDIDATE WITH
THE RIGHT TO SUBLICENSE (THE "SCHERING OPTION").
4.1.2
EXERCISE OF SCHERING OPTION.
UPON THE DELIVERY BY
THE RSC TO SCHERING AND EPIX OF A DESIGNATION NOTICE, SCHERING WILL HAVE A
PERIOD OF [*****] [*****] TO DETERMINE WHETHER TO EXERCISE THE SCHERING OPTION
WITH RESPECT TO THE DEVELOPMENT CANDIDATE IDENTIFIED IN SUCH