Research Collaboration and License Agreement

EXHIBIT 10.92 EXECUTION COPY - --------------


Portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions, marked by an * and [ ], have been separately filed with the Commission.


RESEARCH COLLABORATION AND LICENSE AGREEMENT
by and among
MERCK & CO., INC.,
TRANSCELL TECHNOLOGIES, INC.
and
INTERNEURON PHARMACEUTICALS, INC.


The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.......................................................1


ARTICLE II RESEARCH PROGRAM AND DRUG DEVELOPMENT PROGRAM...................7
2.1 General.........................................................7
2.2 Conduct of Research.............................................7
2.3 Additional FTE's................................................7
2.4 [*] Research Program............................................7
2.5 [*] Research Program............................................7
2.6 Joint Research Committee........................................7
2.7 Exchange of Information.........................................9
2.8 Records and Reports.............................................9
2.9 Research Information and Inventions.............................9
2.10 Research Program Term.........................................10
2.11 Research Program Materials....................................11
2.12 Drug Development Program......................................11


ARTICLE III LICENSE; DEVELOPMENT AND COMMERCIALIZATION.....................12
3.1 License Grant..................................................12
3.2 Retained Rights................................................12
3.3 Exclusivity in Expanded Field..................................12
3.4 Princeton Agreements...........................................13
3.5 Development and Commercialization..............................13


ARTICLE IV CONFIDENTIALITY AND PUBLICATION.................................14
4.1 Non-disclosure and Non-Use Obligations.........................14
4.2 Permitted Disclosure of Proprietary Information................14
4.3 Publication and Public Disclosures.............................15


ARTICLE V PAYMENTS; ROYALTIES AND REPORTS..................................16
5.1 Commitment Fee and Option Payment..............................16
5.2 Research Program Funding.......................................16
5.3 Milestone Payments.............................................16
5.4 Royalties......................................................17
5.5 Reports; Payment of Royalty....................................19
5.6 Audits.........................................................19
5.7 Payment Exchange Rate..........................................20
5.8 Income Tax Withholding.........................................20


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The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


ARTICLE VI REPRESENTATIONS AND WARRANTIES..................................21
6.1 Transcell Representations and Warranties.......................21
6.2 Interneuron Representations and Warranties.....................22
6.3 General Disclaimer.............................................22
6.4 Merck Representations and Warranties...........................23


ARTICLE VII PATENT MATTERS.................................................23
7.1 Filing, Prosecution and Maintenance of Patents.................23
7.2 Right of Other Parties to Prosecute and Maintain Patents.......23
7.3 Interference, Opposition, Reexamination and Reissue............24
7.4 Enforcement and Defense........................................24
7.5 Patent Term Restoration........................................25


ARTICLE VIII TERM AND TERMINATION..........................................26
8.1 Term and Expiration............................................26
8.2 Termination by Notice..........................................26
8.3 Termination....................................................26
8.4 Effect of Expiration or Termination............................28


ARTICLE IX MISCELLANEOUS...................................................28
9.1 Force Majeure..................................................28
9.2 Assignment.....................................................29
9.3 Severability...................................................29
9.4 Notices........................................................29
9.5 Applicable Law.................................................30
9.6 Dispute Resolution.............................................30
9.7 Entire Agreement...............................................31
9.8 Headings.......................................................31
9.9 Independent Contractors........................................31
9.10 Waiver........................................................31
9.11 Counterparts..................................................31


Schedule 1.19 -- Interneuron Patent Assets Schedule 1.25 -- List of Major Market Countries Attachment 1.39 -- 1993 Princeton License Agreement Attachment 1.40 -- 1997 Princeton Research Agreement Attachment 1.46 -- Side Agreement Schedule 1.52 -- Transcell Patent Assets Attachment 2.1.A -- [*] Research Program Attachment 2.1.B -- [*] Research Program


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Attachment 4.3 -- Form of Press Release Schedule 7.1 -- Countries Where Interneuron and Transcell will
File, Prosecute and Maintain Patents


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RESEARCH COLLABORATION AND LICENSE AGREEMENT


THIS AGREEMENT effective as of June 30, 1997, (the "Effective Date") between Merck & Co., Inc., a corporation organized and existing under the laws of New Jersey ("Merck"), Transcell Technologies Inc., a corporation organized and existing under the laws of Delaware ("Transcell") and Interneuron Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware ("Interneuron").


WITNESSETH:


WHEREAS, Transcell and/or Interneuron have developed or will develop certain Transcell Know-How and Interneuron Know-How and have or will obtain rights to certain Patent Assets (as hereinafter defined);


WHEREAS, Merck and Transcell desire to enter into a research collaboration to discover and develop Compounds (as hereinafter defined) upon the terms and conditions set forth herein;


WHEREAS, Merck desires to obtain a license under Transcell and Interneuron Intellectual Property, 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
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Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:


1.1 "Affiliate" shall mean (i) any corporation or business entity of which
fifty percent (50%) or more of the securities or other ownership
interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or
indirectly, by a Party; or (ii) any corporation or business entity
which, directly or indirectly, owns, controls or holds fifty percent
(50%) (or the maximum ownership interest permitted by law) or more of
the securities or other ownership interests representing the equity,
the voting stock or, if applicable, the general partnership interest,
of a Party.


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


The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


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


1.4 "Combination Product" shall mean a Licensed Product which includes one
or more active ingredients other than Compound in combination with
Compound.


1.5 "Compound" shall mean any chemical entity that is synthesized in, or
discovered in or during, the Research Program, or a derivative,
homolog, or analogue of such a chemical entity or a salt or ester
thereof.


1.6 "Drug Development Program" shall mean the drug development program to
be carried out by Merck in accordance with Section 2.12.


1.7 "Effective Date" shall mean June 30, 1997.


1.8 "Expanded Field" shall mean all antibacterial agents for human or
animal use.


1.9 "Extended Research Program Term" shall have the meaning set forth in
Section 2.10.


1.10 "FDA" shall mean the United States Food and Drug Administration and any
successor agency having substantially the same functions.


1.11 "Field" shall mean all [*] and [*] analogues which are antibacterial
agents for human or animal use.


1.12 "First Commercial Sale" shall mean, with respect to any Licensed
Product, the first sale for end use or consumption of such Licensed
Product in a country after all required approvals, including marketing
and pricing approvals, have been granted by the governing health
authority of such country.


1.13 "Full Time Equivalent" or "FTE" shall mean the equivalent of a
full-time scientist's work time over a twelve-month period (including
normal vacations, sick days and holidays). The portion of an FTE year
devoted by a scientist to the Research Program shall be determined by
dividing the number of days during any twelve-month period devoted by
such employee to the Research Program by the total number of working
days during such twelve-month period.


1.14 "Improvement" shall mean any enhancement in the manufacture,
formulation, ingredients, preparation, presentation, means of delivery,
dosage or packaging of Compound or Licensed Product.


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The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


1.15 "Interneuron Information and Inventions" shall have the meaning as set
forth in Section 2.9.


1.16 "Interneuron Intellectual Property" shall mean (i) Interneuron
Know-How, (ii) Interneuron Patent Assets, (iii) Interneuron Information
and Inventions, (iv) Interneuron's interest in Interneuron/Transcell
Joint Information and Inventions and (v) Interneuron's interest in
Interneuron/Merck Joint Information and Inventions.


1.17 "Interneuron Know-How" shall mean all Interneuron Information and
Inventions, and all information and materials, including but not
limited to, discoveries, Improvements, processes, formulas, data,
inventions, know-how and trade secrets, patentable or otherwise, which
during the term of this Agreement (i) are in Interneuron's possession
or control or in which Interneuron has sub-licensable rights, including
its rights under the 1997 Princeton Research Agreement, (ii) are not
generally known and (iii) are necessary or useful to Merck in
connection with rights granted and activities contemplated under this
Agreement.


1.18 "Interneuron/Merck Joint Information and Inventions" shall have the
meaning as set forth in Section 2.9.


1.19 "Interneuron Patent Assets" shall mean issued patents and patent
applications (which shall be deemed to include certificates of
invention and applications for certificates of invention) presently
existing or which during the term of this Agreement are owned by
Interneuron or which Interneuron through license or otherwise acquires
rights, including, but not limited to, those listed on Schedule 1.19,
which: (i) relate to a Compound and/or Licensed Product, their uses in
the Field or Expanded Field or a method of their manufacture; or (ii)
relate to Research Information and Inventions; including all divisions,
continuations, continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates or the like of any such patents
and patent applications and foreign equivalents thereof.


1.20 "Interneuron/Transcell Joint Information and Inventions" shall have the
meaning as set forth in Section 2.9.


1.21 "Joint Research Committee" shall mean the committee described in
Section 2.6.


1.22 "Lead Candidate" means a Compound that is selected by the Joint
Research Committee as a lead compound for medicinal chemistry studies
in accordance with the [*] Research Program or the [*] Research
Program.


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The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


1.23 "Licensed Product" shall mean any preparation in final form for sale by
prescription, over-the-counter or by any other method, for human or
animal use, which contains a Compound, including, without limitation,
any Combination Product.


1.24 "Licensor(s)" shall mean Interneuron and/or Transcell, as the context
indicates.


1.25 "Major Market Country" shall mean a country listed on Schedule 1.25
hereto.


1.26 "Merck Information and Inventions" shall have the meaning as set forth
in Section 2.9.


1.27 "Merck Know-How" shall mean any Merck information and materials,
including but not limited to, discoveries, Improvements, processes,
formulas, data, inventions, know-how and trade secrets, patentable or
otherwise, which during the term of this Agreement are not generally
known and which arise out of the Research Program or are necessary or
useful to Transcell in the performance of its obligations under the
Research Program.


1.28 "Merck Patent Assets" shall mean issued patents and patent applications
(which shall be deemed to include certificates of invention and
applications for certificates of invention) which during the term of
this Agreement are owned by Merck or which Merck through license or
otherwise acquires rights, which: (i) relate to a Compound and/or
Licensed Product or their uses in the Field or Expanded Field; or (ii)
relate to Research Information and Inventions; including all divisions,
continuations, continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates or the like of any such patents
and patent applications and foreign equivalents thereof.


1.29 "Milestone" shall have the meanings as described in Attachment 2.1.A
and Attachment 2.1.B hereto.


1.30 "[*] Research Program" shall mean the research program for the
synthesis and biological evaluation of [*] analogues and development of
Licensed Products as described in Attachment 2.1.B hereto.


1.31 "NDA" shall mean a new drug application filed with the FDA for
marketing authorization of a Licensed Product.


1.32 "Net Sales" shall mean the gross invoice price of Licensed Product sold
by Merck, its Affiliates or sublicensees (which term does not include
distributors) to the first independent third party after deducting, if
not previously deducted, from the amount invoiced:


(a) trade, cash and quantity discounts;


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(b) credits and allowances on account of returned or rejected
products;


(c) rebates, chargebacks and other amounts paid on sale or
dispensing of Licensed Product;


(d) retroactive price reductions;


(e) with regard to sales in the United States, a fixed amount
equal to five percent (5%) of the amount invoiced to cover bad
debt, sales or excise taxes, transportation and insurance
charges; and with regard to sales outside the United States, a
fixed amount equal to ten percent (10%) of the amount invoiced
to cover the above and additional special transportation,
custom duties, and other governmental charges; and


(f) the inventory cost of devices or delivery systems used for
dispensing or administering Licensed Product, special
packaging of Licensed Product and diluents or similar
exogenous materials which accompany Licensed Product as it is
sold.


With respect to sales of Combination Products, Net Sales shall be
calculated on the basis of the invoice price of Licensed Product(s)
containing the same weight of a Compound sold without other active
ingredients. If such Licensed Product is not sold without other active
ingredients, Net Sales shall be calculated on the basis of the invoice
price of the Combination Product multiplied by a fraction, the
numerator of which shall be the inventory cost of Compound in the
Licensed Product and the denominator of which shall be the inventory
cost of all of the active ingredients in the Combination Product.
Inventory cost shall be determined in accordance with Merck's regular
accounting methods.


1.33 "Option Payment" shall mean the payment described in Section 5.1 in
consideration for the rights granted in Section 3.3.


1.34 "Option Period" shall mean the option period described in Section 3.3.


1.35 "Party" shall mean Merck, Transcell or Interneuron.


1.36 "Patent Assets" shall mean the Interneuron Patent Assets and the
Transcell Patent Assets.


1.37 "Princeton" shall mean Princeton University, Princeton, New Jersey.


1.38 "Princeton Agreements" shall mean the 1993 Princeton License Agreement
and the 1997 Princeton Research Agreement, as the same may be amended
from time to time.


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The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


1.39 "1993 Princeton License Agreement" shall mean the License Agreement by
and between the Trustees of Princeton and Transcell effective as of
October 14, 1993, as amended February 21, 1997 and as further amended
from time to time, a copy of which is attached hereto as Attachment
1.39.


1.40 "1997 Princeton Research Agreement" shall mean the Research Agreement
by and between the Trustees of Princeton and Interneuron effective as
of April 29, 1997, as amended from time to time, a copy of which is
attached hereto as Attachment 1.40.


1.41 "Proprietary Information" shall mean any and all scientific, clinical,
regulatory, marketing, financial and commercial information or data,
whether communicated in writing, orally or by any other means, which is
provided by one Party to the other Party in connection with this
Agreement. Proprietary Information shall include, without limitation,
Merck Know-How and Transcell Know-How.


1.42 "Research Information and Inventions" shall mean the entire right,
title and interest in all discoveries, Improvements, processes,
formulas, data, inventions, know-how and trade secrets, patentable or
otherwise, arising from the Research Program.


1.43 "Research Program" shall mean the collaborative research effort between
the parties as described in Attachments 2.1.A and 2.1.B hereto
consisting of the [*] Research Program and the [*] Research Program, as
may be amended or revised pursuant to the provisions of Section 2.6.3.
References to the Research Program shall refer only to the
collaborative phase of the research effort and shall not refer to the
selection of a Safety Assessment Candidate by Merck or to the Drug
Development Program.


1.44 "Research Program Term" shall have the meaning set forth in Section
2.10.


1.45 "Safety Assessment Candidate" shall mean a Compound with a scientific
data package that is evaluated and approved by the Merck Research
Management Committee for initiation of formal toxicology studies.


1.46 "Side Agreement" shall mean the agreement entered into not later than,
and effective as of, the Effective Date by and among Merck, Transcell,
Interneuron and the Trustees of Princeton and attached hereto as
Attachment 1.46.


1.47 "Territory" shall mean all of the countries in the world.


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The information below marked by * and [ ] has been omitted pursuant to a request for confidential treatment. The omitted portion has been separately filed with the Commission.


1.48 "Transcell Intellectual Property" shall mean (i) Transcell Know-How,
(ii) Transcell Patent Assets, (iii) Transcell Information and
Inventions, (iv) Transcell's interest in Transcell/Merck Joint
Information and Inventions and (v) Transcell's interest in
Interneuron/Transcell Joint Information and Inventions.


1.49 "Transcell Information and Inventions" shall have the meaning as set
forth in Section 2.9.


1.50 "Transcell Know-How" shall mean all Transcell Information and
Inventions, and all information and materials, including but not
limited to, discoveries, Improvements, processes, formulas, data,
inventions, know-how and trade secrets, patentable or otherwise, which
during the term of this Agreement (i) are in Transcell's possession or
control or in which Transcell has sub-licensable rights, (ii) are not
generally known and (iii) are necessary or useful to Merck in
connection with rights granted and activities contemplated under this
Agreement.


1.51 "Transcell/Merck Joint Information and Inventions" shall have the
meaning as set forth in Section 2.9.


1.52 "Transcell Patent Assets" shall mean issued patents and patent
applications (which shall be deemed to include certificates of
invention and applications for certificates of invention) presently
existing or which during the term of this Agreement are owned by
Transcell or which Transcell through license or otherwise acquires
rights, including, but not limited to, those listed on Schedule 1.52,
which: (i) relate to a Compound and/or Licensed Product, their uses in
the Field or Expanded Field, or a method of their manufacture; or (ii)
relate to Research Information and Inventions; including all divisions,
continuations, continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates or the like of any such patents
and patent applications and foreign equivalents thereof.


1.53 "Valid Patent Claim" means a claim of an issued and unexpired patent
included within the Patent Assets or the Merck Patent Assets, which has
not been revoked or held unenforceable or invalid by a decision of a
court or other governmental 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.


1.54 "[*] Research Program" shall mean the research program for the
synthesis and biological evaluation of [*] analogues and the
development of Licensed Products as described in Attachment 2.1.A
hereto.


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