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EXHIBIT 10.5 TO S-1
AGREEMENT
BETWEEN
OPHIDIAN PHARMACEUTICALS, INC.
AND
XXX XXXXX AND COMPANY
JUNE 3, 1996
**** Indicates where confidential material has been omitted and filed
separately with the Commission
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TABLE OF CONTENTS
**** Indicates where confidential material has been omitted and filed
separately with the Commission
AGREEMENT
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Bulk Drug Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Bulk Drug Substance Process . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Bulk Manufacturing Program . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Bulk Process Development Program . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 CDAD Diagnostic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Clinical Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Clinical Development Program . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Drug Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Drug Product Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 Enabling Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 FDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 GLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 GMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 Lilly Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Lilly Program Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 Lilly Program Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 Lilly Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 Major Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.23 Manufacturing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 Manufacturing Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.25 Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.26 Ophidian Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.27 Ophidian Program Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Ophidian Program Technology . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 Ophidian Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Process Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 Product Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.32 Product Idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.33 Product Launch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.34 Product Manufacturing Program . . . . . . . . . . . . . . . . . . . . . . . . 5
1.35 Product Process Development Program . . . . . . . . . . . . . . . . . . . . . 5
1.36 Program Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.37 Program Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.38 Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 Regulatory Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.40 Steering Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.41 Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.42 Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.43 Trigger Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.44 Valid Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2 COLLABORATION SCOPE AND GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Purpose and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Steering Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Responsibilities of Project Team . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Disagreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 Governance Following Product Launch . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3 CLINICAL DEVELOPMENT PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Commencement; Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Clinical Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Clinical Development Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4 BULK DRUG SUBSTANCE AND PRODUCT PROCESS
DEVELOPMENT PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Commencement; Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Process Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Bulk Process Development Program . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Product Process Development Program . . . . . . . . . . . . . . . . . . . . . 10
4.5 Process Development Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5 BULK MANUFACTURING AND PRODUCT
MANUFACTURING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Commencement; Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Manufacturing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 Manufacturing Bulk Drug Substance . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Processing Bulk Drug Substance into Drug Product . . . . . . . . . . . . . . . 12
5.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 6 CDAD DIAGNOSTIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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ARTICLE 7 COMMERCIALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Commercialization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Marketing Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Commercial Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.4 Commercialization Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 8 EQUITY INVESTMENTS AND MILESTONE FEES . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Initial Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Milestone Equity Investments or Fees . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 9 LICENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.2 Lilly Manufacturing and Other Rights Following Trigger
Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 Trigger Event Involving Force Majeure . . . . . . . . . . . . . . . . . . . . 19
9.4 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 10 TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Selection; License; Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 11 SUBSEQUENT PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 12 INFORMATION AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.1 Information Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.2 Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.3 Adverse Drug Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.4 Use of information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.5 Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.6 Regulatory Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 13 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13.1 Ownership of Inventions and Know-How . . . . . . . . . . . . . . . . . . . . . 22
13.2 Infringement Claims by Third Parties . . . . . . . . . . . . . . . . . . . . . 23
13.3 Infringement Claims Against Third Parties . . . . . . . . . . . . . . . . . . 24
13.4 Notice of Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13.5 Patent Term Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 14 CONFIDENTIALITY AND NONDISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . 26
14.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.2 Authorized Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.3 Nondisclosure of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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14.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.5 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 15 TERM AND TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 27
15.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.2 Termination for Material Breach . . . . . . . . . . . . . . . . . . . . . . . 27
15.3 Termination Based on Results of Immunology Tests . . . . . . . . . . . . . . . 27
15.4 Termination by Lilly for Failure to Meet Goals . . . . . . . . . . . . . . . . 27
15.5 Termination Upon Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . 28
15.6 Accrued Rights, Surviving Obligations . . . . . . . . . . . . . . . . . . . . 28
15.7 Rights Upon Termination for Breach . . . . . . . . . . . . . . . . . . . . . . 28
15.8 Assistance following Termination . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 16 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 17 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.1 Right, Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.2 Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.3 No Approvals or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.4 Patents; Prior Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.5 Prior Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
17.6 No Debarrment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 18 GOVERNING LAW; DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . 31
18.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.2 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 19 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
19.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
19.2 Foreign Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
19.3 Non Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
19.4 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
19.5 Entirety of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.6 Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.7 Disclaimer of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.11 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19.12 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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19.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
19.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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AGREEMENT
THIS AGREEMENT ("AGREEMENT") is entered into as of the 3rd day of
June, 1996 ("EFFECTIVE DATE"), by and among OPHIDIAN PHARMACEUTICALS, INC., a
Wisconsin corporation ("OPHIDIAN"), and XXX XXXXX AND COMPANY, an Indiana
corporation ("Lilly").
RECITALS
A. Ophidian has developed avian antibody-based technology for the
treatment of Clostridium difficile associated diseases ("CDAD").
X. Xxxxx is engaged in the research, development, marketing,
manufacture and distribution of therapeutic pharmaceutical and animal health
products and health care solutions.
C. Ophidian and Lilly desire to enter into a collaborative
agreement with respect to the further research, development, manufacture and
sale of products for the treatment of CDAD.
AGREEMENT
In consideration of the foregoing, and the covenants and premises
contained in this Agreement, Ophidian and Lilly agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "AFFILIATE" shall mean any company or entity controlled by,
controlling, or under common control with a party hereto and shall include
without limitation any company forty percent (40%) or more of whose voting
stock (or other comparable ownership interest for an entity other than a
corporation) is owned or
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controlled, directly or indirectly, by a party, and any company which owns or
controls, directly or indirectly, forty percent (40%) or more of the voting
stock (or other comparable ownership interest for an entity other than a
corporation) of a party.
1.2 "BULK DRUG SUBSTANCE" shall mean a preparation comprising a
polyclonal avian antibody, effective in treating CDAD, in bulk form.
1.3 "BULK DRUG SUBSTANCE PROCESS" shall mean the process or
processes used to manufacture the Bulk Drug Substance and to confirm
specifications and stability of Bulk Drug Substance.
1.4 "BULK MANUFACTURING PROGRAM" shall mean the effort necessary
to develop adequate manufacturing capabilities for clinical and commercial
supply of the Bulk Drug Substance.
1.5 "BULK PROCESS DEVELOPMENT PROGRAM" shall mean the process
development effort necessary to complete development of a process to
manufacture the Bulk Drug Substance.
1.6 "CDAD DIAGNOSTIC" shall have the meaning set forth in Article
6.
1.7 "CLINICAL DEVELOPMENT PLAN" shall have the meaning assigned
thereto in Section 3.2.
1.8 "CLINICAL DEVELOPMENT PROGRAM" shall mean the pre-clinical
studies, clinical trials and regulatory filings and related steps directed
toward Regulatory Approval of the Drug Product.
1.9 "CONFIDENTIAL INFORMATION" shall mean each party's
confidential information, inventions, know-how or data, and shall include,
without limitation, manufacturing, marketing, financial, regulatory, personnel
and other business information and plans, whether in oral, written, graphic or
electronic form and whether in existence as of the Effective Date or developed
or acquired in the future, except where such information (i) is public
knowledge at the time of disclosure by the disclosing party, (ii) becomes
public knowledge through no fault of the receiving party or (iii) was in the
possession of the receiving party at the time of disclosure by the disclosing
party as evidenced by proper business records.
1.10 "DRUG PRODUCT" shall mean a finished product form prepared
from the Bulk Drug Substance and ready for administration to the ultimate
consumer as a pharmaceutical.
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1.11 "DRUG PRODUCT PROCESS" shall mean the process or processes
used to convert the Bulk Drug Substance to the Drug Product, including but not
limited to formulating and fill/finishing.
1.12 "EFFECTIVE DATE" shall mean the date indicated at the
beginning of this Agreement.
1.13 "ENABLING TECHNOLOGY" shall mean, collectively, Program
Patents and Program Technology.
1.14 "FDA" shall mean the United States Food and Drug
Administration.
1.15 "GAAP" shall mean U.S. generally accepted accounting
principles, consistently applied.
1.16 "GLP" shall mean the current Good Laboratory Practice
Standards promulgated or endorsed by the FDA (or in the case of foreign
jurisdictions, comparable regulatory standards), including those procedures
expressed or implied in the regulatory filings made with respect to the Drug
Product with the FDA or foreign regulatory agents.
1.17 "GMP" shall mean the current Good Manufacturing Practices
Standards promulgated or endorsed by the FDA (or in the case of foreign
jurisdictions, comparable regulatory standards), and all additional procedures
expressed or implied in the regulatory filings made with respect to the Drug
Product with the FDA or foreign regulatory authorities.
1.18 "LILLY PATENTS" shall mean all patents, both foreign and
domestic, with claims which cover the manufacture, use or sale of Bulk Drug
Substance and/or Drug Product and which have not been held invalid or
unenforceable in a decision by a court of competent jurisdiction from which no
appeal has been or can be taken, including without limitation all
substitutions, extensions, reissues, renewals, supplementary protection
certificates, and inventors' certificates, issued as of, or which subsequently
issue from applications (including provisional applications, divisionals,
continuations and continuations-in-part) pending as of the Effective Date which
Lilly or any majority owned Affiliate of Lilly, owns, controls or has a license
to (with right to sublicense), including, without limitation, those Patents
being listed on Schedule 1.20 attached hereto.
1.19 "LILLY PROGRAM PATENTS" shall mean all patents, both foreign
and domestic, including without limitation, all substitutions, extensions,
reissues, renewals, supplementary protection certificates, and inventors'
certificates thereof, and all patent applications including provisional
applications, divisions, continuations and continuations-in-part with claims
which cover the manufacture,
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use or sale of Bulk Drug Substance and/or Drug Product that are filed or
acquired by Lilly (with the right to sublicense) after the Effective Date.
1.20 "LILLY PROGRAM TECHNOLOGY" shall mean all tangible or
intangible know-how, trade secrets, inventions (whether or not patentable),
data, clinical and preclinical results, information, and any physical, chemical
or biological material, any replication or any part of such material, which is
developed or acquired (with the right to disclose and/or sublicense) by Lilly
after the Effective Date and which relate to the manufacture, use or sale of
Bulk Drug Substance and/or Drug Product.
1.21 "LILLY TECHNOLOGY" shall mean all tangible or intangible
know-how, trade secrets, inventions (whether or not patentable), data, clinical
and preclinical results, information, and any physical, chemical or biological
material, any replication or any part of such material, necessary for the
development and manufacture of Drug Product, that Lilly or any Affiliate of
Lilly, owns or controls as of the Effective Date.
1.22 "MAJOR MARKET" shall mean *******************.
1.23 "MANUFACTURING PLAN" shall have the meaning assigned thereto
in Section 5.2.
1.24 "MANUFACTURING PROGRAM" shall mean the effort to scale-up for
and manufacture the Bulk Drug Substance and Drug Product for clinical and
commercial supply.
1.25 "NET SALES" shall mean ***************************************
********************************************************************************
********************************.
1.26 "OPHIDIAN PATENTS" shall mean all patents, both foreign and
domestic, with claims that cover the manufacture, use or sale of Bulk Drug
Substance and/or Drug Product and which have not been held invalid or
unenforceable in a decision by a court of competent jurisdiction from which no
appeal has been or can be taken, including without limitation all
substitutions, extensions, reissues, renewals, supplementary protection
certificates, and inventors' certificates, issued as of, or which subsequently
issue from applications (including provisional applications, divisionals,
continuations and continuations-in-part) pending as of the Effective Date which
Ophidian owns, controls or has a license to (with the right to sublicense),
including but not limited to those patents and patent applications listed on
Schedule 1.26 attached hereto.
1.27 "OPHIDIAN PROGRAM PATENTS" shall mean all patents, both
foreign and domestic, including without limitation, all substitutions,
extensions, reissues, renewals, supplementary protection certificates, and
inventors' certificates thereof,
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and all patent applications including provisional applications, divisions,
continuations and continuations-in-part, covering inventions made by, or
acquired by (with the right to sublicense) with claims that cover the
manufacture, use or sale of Bulk Drug Substance or Drug Product that are filed
or acquired by Ophidian after the Effective Date.
1.28 "OPHIDIAN PROGRAM TECHNOLOGY" shall mean all tangible or
intangible know-how, trade secrets, inventions (whether or not patentable),
data, clinical and preclinical results, information, and any physical, chemical
or biological material, any replication or any part of such material, which is
developed or acquired (with the right to disclose and/or sublicense) by
Ophidian after the Effective Date and which relate to the manufacture, use or
sale of Bulk Drug Substance and/or Drug Product.
1.29 "OPHIDIAN TECHNOLOGY" shall mean all tangible or intangible
know-how, trade secrets, inventions (whether or not patentable), data, clinical
and preclinical results, information, and any physical, chemical or biological
material, any replication or any part such material, necessary for the
development and manufacture of Drug Product, that Ophidian owns or controls as
of the Effective Date.
1.30 "PROCESS DEVELOPMENT PLAN" shall have the meaning assigned
thereto in Section 4.2.
1.31 "PRODUCT DECISION" shall mean a decision *****************
********************************************************************************
**************************************** **********************************.
1.32 "PRODUCT IDEA" shall have the meaning assigned thereto in
Article 11.
1.33 "PRODUCT LAUNCH" shall have the meaning set forth in Exhibit
A.
1.34 "PRODUCT MANUFACTURING PROGRAM" shall mean the effort to
develop adequate fill/finish and related manufacturing capabilities for
clinical and commercial supply of the Drug Product utilizing Bulk Drug
Substance.
1.35 "PRODUCT PROCESS DEVELOPMENT PROGRAM" shall mean the process
development effort necessary to develop the Drug Product Process.
1.36 "PROGRAM PATENTS" shall mean Lilly Program Patents and
Ophidian Program Patents, collectively, whether or not developed solely or
jointly by Ophidian or Lilly.
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1.37 "PROGRAM TECHNOLOGY" shall mean Lilly Program Technology and
Ophidian Program Technology, collectively, whether or not developed solely or
jointly by Ophidian or Lilly.
1.38 "PROJECT TEAM" shall have the meaning assigned in Section 2.3.
1.39 "REGULATORY APPROVAL" shall mean all authorization by the
appropriate governmental entity or entities necessary for commercial sale of
Drug Product (including exports) in each jurisdiction in which Lilly elects to
market the Drug Product including, without limitation, approval of labeling,
price, reimbursement and manufacturing.
1.40 "STEERING COMMITTEE" shall mean that committee to be formed
pursuant to Section 2.2.
1.41 "THIRD PARTY" shall mean any entity which is not a party or
Affiliate of any party to this Agreement.
1.42 "TRADEMARK" shall have the meaning assigned thereto in Section
10.1.
1.43 "TRIGGER EVENT" shall have the meaning set forth in Section
9.2.
1.44 "VALID CLAIM" shall mean any claim(s) pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency
of competent jurisdiction, unappealed or unappealable within the time allowed
for appeal, and which has not been admitted to be invalid or unenforceable
through reissue or disclaimer.
ARTICLE 2
COLLABORATION SCOPE AND GOVERNANCE
2.1 PURPOSE AND SCOPE. The parties wish to collaborate in the
development and manufacture of the Drug Product. As more fully described
below, Ophidian will have principal responsibility for the Bulk Drug Substance
Process Development Program, the Bulk Manufacturing Program and the manufacture
(either itself or through a third party acceptable to Lilly) of Bulk Drug
Substance for clinical and commercial supply. Lilly will have principal
responsibility for the Drug Product Process Development Program, manufacture of
Drug Product from Bulk Drug Substance for clinical and commercial supply, the
conduct of the Clinical Development Program, and filing and maintenance of
regulatory documents necessary for Regulatory Approvals. Lilly will have sole
responsibility for distribution and marketing of the Drug Product. All pricing
for Drug Product shall be determined solely by Lilly. It is expected that Drug
Product will be marketed by
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Lilly or its Affiliates (or in selected territories, by Third Parties) selected
by Lilly in each jurisdiction in which it is determined by Lilly to be feasible
and commercially attractive.
2.2 STEERING COMMITTEE. The collaborative effort conducted
hereunder shall be conducted under the overall direction of a Steering
Committee comprised of four (4) members (the "Steering Committee"). Two (2)
members shall be appointed by each of Lilly and Ophidian not later than thirty
(30) days after the Effective Date. All decisions of the Steering Committee
shall be unanimous by a quorum of all four (4) members. Either party may
change its representation on the Steering Committee at any time by written
notice to the other. Minutes shall be kept of all Steering Committee meetings
and circulated to the parties for approval. Minutes shall be deemed approved
unless any member of the Steering Committee objects to the accuracy of such
minutes within five (5) days of receipt.
2.3 PROJECT TEAM.
(a) The Steering Committee shall appoint a Project Team,
consisting of such number of Lilly personnel, not exceeding ten (10), as Xxxxx
xxxxx appropriate from time to time and such number of representatives of
Ophidian, not exceeding four (4), as Ophidian deems appropriate from time to
time (the "Project Team"). The Project Team shall provide the day-to-day
management for the collaboration and shall be responsible for directing and
overseeing specific activities hereunder, including but not limited to the
Clinical Development Program, the Process Development Program and the
Manufacturing Program. Although one or the other of the parties has been
allocated principal responsibility for each of such programs, all significant
decisions with respect to such programs (other than those relating to
commercialization of the Drug Product, which shall be the sole responsibility
of Lilly) shall be made by the Project Team. The Project Team shall be
subordinate to the Steering Committee, which shall have the right upon timely
appeal as provided below to review, accept, reject or modify all actions of the
Project Team. Either party may change its representatives on the Project Team
at any time by written notice to the other.
(b) Decisions of the Project Team shall be made by unanimous
consensus when possible, and otherwise by majority vote, subject to the right
of either party to appeal any decision of the Project Team to the Steering
Committee. No vote of the Project Team may be taken unless a majority of the
members of the Project Team are present, including at least one (1)
representative of each party. The Project Team shall keep minutes of any
meeting at which a decision is to be reached and shall circulate such minutes
to all members of the Project Team and the Steering Committee. Minutes shall
be deemed approved unless any member of the Project Team or the Steering
Committee objects to the accuracy of such minutes within five (5) days of
receipt. Any party desiring to appeal a decision of the Project Team to the
Steering Committee shall make its appeal in writing to the Steering Committee
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within five (5) days of receipt of the minutes for the meeting at which the
decision was made. Action pursuant to any decision appealed to the Steering
Committee shall be suspended pending a determination by the Steering Committee
to accept, reject or modify the decision of the Project Team. Any party may at
any time request reconsideration of any issue if such party in good faith
believes that substantial changes in circumstances have occurred that
necessitate such reconsideration.
(c) The Project Team may appoint one or more other committees
("Advisory Committees") to perform such functions as the Project Team may
determine. Unless a party elects not to participate on a particular Advisory
Committee, all Advisory Committees shall have at least one representative of
each party. Advisory Committees may provide advice and make recommendations to
the Project Team, but shall have no authority to bind the Project Team or any
of the parties.
2.4 RESPONSIBILITIES OF PROJECT TEAM. The Project Team shall: (1)
establish comprehensive and detailed plans designed to accomplish the goals of
the Process Development Program, the Clinical Development Program, and the
Manufacturing Program, (2) allocate tasks and coordinate activities required to
carry out the goals of the Clinical Development Program, the Process
Development Program, and the Manufacturing Program, (3) determine the strategy
for filing and prosecuting applications for Program Patents and otherwise
protecting Program Technology, (4) monitor progress of the Clinical Development
Program, the Process Development Program, and the Manufacturing Program, and
(5) discharge such other obligations as are assigned to the Project Team under
this Agreement.
2.5 DISAGREEMENTS. Disputes not resolved by the Project Team
shall be referred to the Steering Committee. Disputes not resolved by the
Steering Committee shall be referred to non-binding mediation in accordance
with Section 18.2.
2.6 GOVERNANCE FOLLOWING PRODUCT LAUNCH. As soon as practicable
following product launch of the Drug Product, the parties shall meet to review
whether it is appropriate to continue the collaboration under the day to day
management of the Project Team, or whether the objectives of the Project Team
have been substantially achieved and it is appropriate to disband or reorganize
the Project Team. Regardless of whether the parties elect to disband or
reorganize the Project Team, the Steering Committee shall continue to provide
overall direction to the collaboration.
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ARTICLE 3
CLINICAL DEVELOPMENT PROGRAM
3.1 COMMENCEMENT; ROLES. The Clinical Development Program shall
commence as soon as practicable after the Effective Date. Lilly shall have
principal responsibility for the conduct of the Clinical Development Program,
and Ophidian shall provide consultation and advice. The Project Team shall
coordinate the efforts of the parties with respect to the Clinical Development
Program.
3.2 CLINICAL DEVELOPMENT PLAN. The Project Team shall prepare and
oversee the implementation of an overall development plan (the "CLINICAL
DEVELOPMENT PLAN") for the Drug Product which shall describe fully the proposed
preclinical studies, toxicology, clinical trials, regulatory plans and any
other key elements of obtaining Regulatory Approval in each country of the
world where Lilly elects to market the Drug Product.
3.3 REGULATORY APPROVALS. The parties shall use their respective
commercially reasonable efforts to file for and obtain all necessary Regulatory
Approvals. Except for Ophidian's Establishment License, and except where
Regulatory Approvals are legally required to be in Ophidian's name, Lilly shall
have the sole right to obtain Regulatory Approvals, which shall be in Lilly's
name, and Lilly shall own all submissions in connection therewith, provided
that Ophidian shall have an irrevocable right of reference thereto. All
contacts or filings with any regulatory agency shall be subject to overall
coordination by the Project Team. The Project Team shall develop a regulatory
contact plan that shall allocate authority for making regulatory contacts and
establish the procedures to be followed when making such contacts. All
formulary or marketing approvals shall also be obtained by and in the name of
Lilly.
3.4 CLINICAL DEVELOPMENT COSTS. Except as set forth below or
otherwise determined by the Project Team, **************************************
***************************************************************************.
ARTICLE 4
BULK DRUG SUBSTANCE AND PRODUCT
PROCESS DEVELOPMENT PROGRAMS
4.1 COMMENCEMENT; ROLES. The Bulk Process Development Program and
the Product Process Development Program shall commence as soon as practicable
after the Effective Date. Ophidian shall have principal responsibility for the
conduct of the Bulk Process Development Program, and Lilly shall have principal
responsibility for the conduct of the Product Process Development Program.
Each party shall provide advice and consultation with respect to the area of
principal responsibility of the other party. The Project Team shall coordinate
the
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efforts of the parties with respect to both the Bulk Process Development
Program and the Product Process Development Program. The parties recognize
that certain manufacturing activities will be performed by Third Parties as
contemplated by Article 5, and that certain process development activities will
accordingly be conducted in cooperation with such Third Parties.
4.2 PROCESS DEVELOPMENT PLAN. The Project Team shall prepare and
oversee the implementation of a detailed, overall process development plan,
which shall address fully the key elements necessary for the Bulk Process
Development Program and the Product Process Development Program and for the
design and construction of necessary manufacturing facilities and shall further
define the roles of each party in the Process Development Program (the "PROCESS
DEVELOPMENT PLAN").
4.3 BULK PROCESS DEVELOPMENT PROGRAM. As set forth above,
Ophidian shall have principal responsibility for the Bulk Process Development
Program, including the development of the process to produce the Bulk Drug
Substance, provision of analytical methods, environmental testing, in-process
testing, and release testing of the Bulk Drug Substance, generation of
appropriate procedures and controls in order to ensure compliance with GLP and
GMP or other governing regulations, and the procurement of necessary
manufacturing facilities for production of the Bulk Drug Substance for the
supply of clinical studies. Lilly shall provide advice with respect to the
Bulk Process Development Program, and the Project Team shall review and approve
procedures and practices required to ensure compliance with GLP, GMP,
environmental and other regulatory requirements.
4.4 PRODUCT PROCESS DEVELOPMENT PROGRAM. Lilly shall have
principal responsibility for the Product Process Development Program including
the development of the process to produce the Drug Product from Bulk Drug
Substance, provision of analytical methods, environmental testing, in-process
testing, and release testing of the Drug Product, generation of appropriate
procedures and controls in order to ensure compliance with GLP and GMP
regulations, and the procurement of necessary manufacturing facilities for
production of the Drug Product from Bulk Drug Substance for the supply of
clinical studies. Ophidian shall provide advice with respect to the Product
Process Development Program, and the Project Team review and approve procedures
and practices required to ensure compliance with GLP and GMP.
4.5 PROCESS DEVELOPMENT COSTS. Except as set forth in this
Agreement,*********************************************************************
**********************************************************.
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ARTICLE 5
BULK MANUFACTURING AND PRODUCT MANUFACTURING PROGRAM
5.1 COMMENCEMENT; ROLES. The Manufacturing Program shall commence
as soon as practicable after the Effective Date. Ophidian shall have principal
responsibility for the Bulk Manufacturing Program, and Lilly shall have
principal responsibility for the Product Manufacturing Program. The Project
Team shall coordinate the efforts of the parties with respect to the
Manufacturing Program.
5.2 MANUFACTURING PLAN. The Project Team shall prepare and
oversee the implementation of a detailed, overall manufacturing plan, which
shall address fully the key elements necessary for the clinical and commercial
manufacture of the Bulk Drug Substance and the Drug Product and the roles of
each party in the Manufacturing Program (the "MANUFACTURING PLAN").
5.3 MANUFACTURING BULK DRUG SUBSTANCE. To produce necessary
quantities of Bulk Drug Substance, Ophidian shall provide the following
facilities and services:
(a) Facilities will be provided ******** for the production of
************ necessary to produce the Bulk Drug Substance. As soon as
practicable after the Effective Date, Ophidian shall develop the capacity to
***************. Ophidian shall add such additional capacity following Product
Decision as may be necessary to insure adequate commercial supply of Bulk Drug
Substance. The location, scale and design of the hen production facilities
will be determined *************, but shall be of a type sufficient to comply
with all applicable regulatory and GMP requirements.***************************
*******************.
(b) As soon as practicable following the Effective Date, ****************
************************************************* in accordance with quality
requirements for clinical trials. *************************************
*************************************************************************.
(c) Facilities will be provided to process ********** into Bulk
Drug Substance, as follows:
(i) As soon as practicable following the Effective Date, *******
******************************************** to produce Bulk Drug Substance in
accordance with the quality and quantity requirements for clinical trials. It
is expected that Bulk Drug Substance will be produced ***********************
******************************************** .
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(ii) As soon as practicable following the receipt by
Ophidian of the Milestone Equity Investment set forth in Article 8.2(a) of this
Agreement, ******************************************. The location, scale and
design of the facilities will be determined by Ophidian, subject to written
approval by Lilly, which approval shall not be unreasonably withheld.
********************************************************************************
**************************************************.
(d) Ophidian shall construct additional facilities for the
manufacture of Bulk Drug Substance as necessary to meet the market demand for
Drug Product. If market demand requires manufacturing capacity in excess of
Ophidian's bulk product pilot facilities, additional capacity will be provided
by Ophidian, through the expansion of Ophidian's bulk product pilot facilities
or additional facilities constructed separately. The location, scale and
design of any additional facilities will be determined by Ophidian, subject to
the written approval by Lilly, which approval shall not be unreasonably
withheld.
(e) All manufacturing facilities shall comply with and be operated
in accordance with all applicable GMP, GLP and other regulatory requirements.
Lilly shall have the right to audit and approve these facilities, including
procedures and practices, to verify their conformance with applicable GMP, GLP
and other regulatory requirements. Ophidian shall comply with all applicable
governmental requirements, and shall provide the Project Team with all
information pertinent to Regulatory Approvals for manufacturing facilities.
Ophidian shall have principal responsibility for in-process and final Bulk Drug
Substance release assays.
(f) As provided in this Agreement, Ophidian shall manufacture and
supply (either itself or through Third Parties approved by Lilly) all of
Lilly's commercial requirements for the Bulk Drug Substance. The Purchase
Price for Bulk Drug Substance supplied by Ophidian shall be as set forth in
Exhibit A. All sales of Bulk Drug Substance shall be subject to the terms and
conditions set forth in Exhibit B.
(g) Ophidian shall not engage any Third Party to manufacture Bulk
Drug Substance without the prior written consent of Lilly, which consent shall
not be unreasonably withheld. Ophidian understands that Lilly would approve a
Third Party manufacturer only after such manufacturer first received a
favorable review by Lilly's scientific, quality control/quality assurance,
manufacturing, financial and other groups.
5.4 PROCESSING BULK DRUG SUBSTANCE INTO DRUG PRODUCT. To produce
quantities of Drug Product from Bulk Drug Substance, Lilly shall provide the
following facilities and services:
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(a) Lilly, either itself or through a Third Party acceptable to
Ophidian, shall provide pilot facilities and equipment for formulation, fill
and finish activities necessary for the manufacture of Drug Product from Bulk
Drug Substance. The location, scale and design of the facilities will be
determined by Lilly. Lilly shall comply with all applicable governmental
requirements, and shall provide the Project Team with all information pertinent
to Regulatory Approvals. Ophidian shall have the right to audit facilities for
formulation, fill and finish of Drug Product.
(b) Lilly shall either itself or through a Third Party acceptable
to Ophidian construct or otherwise provide additional facilities for the
formulation, fill and finish of Drug Product as necessary to meet the market
demand. The Drug Product shall be manufactured in accordance with then-current
GMP, applicable regulatory requirements and such further specifications as are
determined from time to time by the Project Team.
5.5 COSTS.
***********************************************************************
********************************************************************************
***************************.
ARTICLE 6
CDAD DIAGNOSTIC
The licenses granted to Lilly hereunder shall not include the right to
utilize any Ophidian intellectual property to develop, manufacture or use
diagnostic products for CDAD, whether in the form of methods, processes,
devices, compounds, kits or services.******************************************
**********************************************************************, unless
the parties earlier agree that an Agreement is not possible. Regardless of
whether Lilly and Ophidian reach an agreement *************** ******, if
Ophidian elects to develop ************************, either itself or through a
Third Party, and the ************************** will be developed in time for
use in the ********** **********************************, Ophidian shall use
its commercially reasonable efforts to ****************************************
******************************************************************** upon such
terms as the parties shall negotiate in good faith.
ARTICLE 7
COMMERCIALIZATION
7.1 COMMERCIALIZATION. Ophidian hereby appoints Lilly as the sole
and exclusive (even as to Ophidian) distributor of Drug Product throughout the
world, with the sole and exclusive right (even as to Ophidian) to promote,
market and sell
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Drug Product throughout the world. Ophidian shall not sell Bulk Drug Substance
for therapeutic use (either directly or as an intermediate) or Drug Product to
any person other than Lilly or its Affiliates or permit any person other than
Lilly or its Affiliates to promote Drug Product without Lilly's prior written
consent. Lilly shall have the sole right to commercialize the Drug Product in
each country of the world.
7.2 MARKETING PARTNERS. Lilly shall have the right to appoint
one or more Third Party marketing partners to promote, co-promote, or co-market
Drug Product in any territory of the world. In the event Lilly elects to
appoint a marketing partner, Lilly shall have the right to supply Drug Product
to such partner at such prices as Lilly shall determine. With the consent of
Ophidian, which consent will not be unreasonably withheld, Lilly may, in
connection with the appointment of a marketing partner, assign to such partner
some or all of Lilly's obligations under the Clinical Development Program,
provided that such assignment shall not release Lilly from any obligation it
may have under this Agreement.
7.3 COMMERCIAL DILIGENCE. Lilly shall work diligently, consistent
with accepted business practices and legal requirements, to obtain regulatory
approval for and to market, sell and distribute the Drug Product in all
territories of the world where in the opinion of Lilly such marketing is
feasible and commercially justifiable, devoting the same degree of attention
and diligence to such efforts that it devotes to such activities for its own
products of comparable market potential.
7.4 COMMERCIALIZATION COSTS. Except as otherwise determined by
the Committee, **************************************************************.
ARTICLE 8
EQUITY INVESTMENTS AND MILESTONE FEES
8.1 INITIAL INVESTMENT. Within thirty (30) days after the
Effective Date, pursuant to a Stock Purchase Agreement substantially in the
form attached as Exhibit C to be entered into by the parties, Lilly shall
purchase and Ophidian shall sell 153,846 shares of unregistered common stock of
Ophidian at a price per share of $6.50, for an aggregate purchase price of nine
hundred ninety-nine thousand, nine hundred ninety-nine dollars ($999,999) .
8.2 MILESTONE EQUITY INVESTMENTS OR FEES. Provided that Ophidian
is not then in breach of any of its obligations under this Agreement, upon
achievement of the respective milestone events listed below, Lilly shall make
milestone equity investments in unregistered common stock of Ophidian or pay a
milestone fee to Ophidian as provided below:
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(a) *********************************** upon the later of ************
********************************************************************************
**************************************** *********************************;
(b) ************************************************************
upon the later of *************************************************************
***********************************************************; and
(c) ******************************************************** upon
the later of *****************************************.
Upon the achievement of a milestone event, Ophidian shall send Lilly a written
request for the appropriate milestone investment or fee, which shall be made or
paid ******************* ************************* of Lilly's receipt of
Ophidian's written request.****************************************************
********************************************************************************
****************************************************************************. In
connection with developing its estimate of the******************************
*****************************, Lilly shall be provided access to all necessary
financial records of Ophidian. If the parties are not able to agree upon the
****************** of the ************* *******************, the
******************* shall be determined by a **********************************
******** selected by the parties, whose fees shall be borne equally by the
parties. If the parties are unable to agree upon ****************************,
the *** day period in which Lilly is to make **************** shall be extended
as necessary to permit necessary valuations
to be done. For every that the period for making a **************** is so
extended or adjusted,**********************************************************
************************************************************************* . The
parties shall enter into a Milestone Stock Purchase Agreement in substantially
the form attached as Exhibit D with respect to each milestone equity
investment. Each milestone equity investment shall be subject to applicable
regulatory requirements, including, if applicable, the notice provisions of the
Xxxx Xxxxx Xxxxxx Antitrust Improvements Act, and the period for making such
investments shall be adjusted as necessary to permit the parties to comply with
such regulatory requirements.
ARTICLE 9
LICENSES
9.1 LICENSES.
(a) LICENSE TO LILLY.
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(i) Subject to the other provisions of this Agreement,
Ophidian hereby grants to Lilly and its majority owned Affiliates an exclusive
worldwide right and license, with the right to sublicense to Third Party
fill/finish manufacturers, under the Ophidian Patents, Ophidian Technology,
Program Patents and Program Technology to make, have made, use, have used,
import, offer for sale, sell and have sold the Drug Products for any human
therapeutic use and to otherwise comply with its obligations under this
Agreement. Ophidian shall have the limited right to practice under Ophidian
Patents, Ophidian Technology, Ophidian Program Patents, and Ophidian Program
Technology to the extent necessary to develop, manufacture and sell to Lilly,
its Affiliates or any Third Party marketing partner of Lilly as contemplated by
Section 7.2, the Bulk Drug Substance and to otherwise comply with its
obligations under this Agreement. Lilly may not exercise any rights granted
pursuant to this Section 9.1(a) to manufacture the Bulk Drug Substance unless a
Trigger Event as defined in Section 9.2 shall have occurred. Ophidian shall
retain all rights under Ophidian Patents, Ophidian Technology, Ophidian Program
Patents and Ophidian Program Technology not granted to Lilly, including but not
limited to the right to develop, manufacture and sell Bulk Drug Substance for
non-therapeutic uses.
(ii) Ophidian will use its best efforts to obtain, on or
prior to the Effective Date, all necessary consents to its granting a
sublicense to Lilly under, or assignment to Lilly of, any Third Party
intellectual property known to Ophidian that covers the manufacture, use, or
sale of the Bulk Drug Substance or Drug Product and, upon obtaining each such
consent, shall promptly grant to Lilly a royalty-free sublicense under or
assignment of all of its rights under each license for use in the manufacture,
use, sale, distribution or promotion of the Bulk Drug Substance and the Drug
Product; provided, however, that Lilly may not exercise any rights under such
sublicense or assignment obtained pursuant to this Section 9.2(a)(ii) to
manufacture Bulk Drug Product unless a Trigger Event shall have occurred.
(b) LICENSES TO OPHIDIAN. (i) Subject to the other provisions of
this Agreement, Lilly hereby grants to Ophidian the nonexclusive, right and
license with the right to sublicense solely to Third Party manufacturers as
provided in Section 5.3, to practice under the Lilly Patents, Lilly Technology,
Lilly Program Patents and Lilly Program Technology solely for the purpose of
developing, manufacturing, and selling to Lilly, its Affiliates or any Third
Party marketing partner of Lilly as contemplated by Section 7.2, the Bulk Drug
Substance under this Agreement and to otherwise comply with its obligations
under this Agreement.
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9.2 LILLY MANUFACTURING AND OTHER RIGHTS FOLLOWING TRIGGER EVENT.
(a) Ophidian understands that Lilly will expend substantial monies
in reliance upon the availability of Bulk Drug Substance, and that continued
availability of Bulk Drug Substance will be important to Lilly's ability to
maintain its credibility as a supplier of products. Therefore, as part of the
consideration to induce Lilly to enter into this Agreement, Ophidian agrees as
follows:
(i) Ophidian hereby agrees that upon occurrence of a
Trigger Event, Lilly shall have the right to exercise the licenses granted in
Section 9.1(a) to manufacture, use and sell Bulk Drug Substance, and Ophidian
shall assign to Lilly any Regulatory Approvals and any trademarks related
thereto; provided, however, that Lilly may not exercise any of the rights
granted pursuant to this Section 9.2(a)(i) to manufacture the Bulk Drug
Substance unless a Trigger Event shall have occurred; and
(ii) Ophidian shall, upon request, transfer to a Third
Party escrow agent selected by mutual agreement of the parties samples of all
materials necessary for manufacture of the Bulk Drug Substance, including
master cell banks and working cell banks, and copies of all written
manufacturing procedures or other items necessary for manufacture of the Bulk
Drug Substance. The escrow agent shall hold such items in escrow pursuant to a
written escrow agreement to be entered into among Lilly, Ophidian and the
escrow agent, which agreement shall provide that such items shall be promptly
delivered to Lilly upon receipt of a written certification by Lilly that a
Trigger Event has occurred. The expense of the escrow agent shall be shared
equally by the parties; and
(iii) Ophidian hereby grants an option to Lilly exercisable
in whole or in part upon a Trigger Event to purchase any manufacturing facility
then owned by Ophidian, and all associated equipment, work in process,
supplies and related assets used in the manufacture of the Bulk Drug Substance
("Manufacturing Assets"), at the fair market value thereof as determined by an
appraisal to be prepared by a nationally recognized appraisal firm acceptable
to the parties, the cost of which shall be borne by the parties. If any of the
Manufacturing Assets are not used primarily in the production of Bulk Drug
Substance, Lilly and Ophidian shall negotiate in good faith an arrangement by
which Lilly shall accommodate Ophidian's need to utilize for other purposes any
of the Manufacturing Assets not used primarily in the production of Bulk Drug
Substance. If the parties are unable to agree upon an acceptable appraiser,
each party shall appoint its own nationally recognized appraisal firm which
shall promptly prepare an appraisal of the fair market value, and the average
of the two appraisals shall be the fair market value. In such event each party
shall bear the expenses of its own appraisal firm; and
(iv) Ophidian shall provide such assistance as Lilly may
reasonably request to assist Lilly in obtaining an alternate source of supply
of Bulk Drug Substance.
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(b) A "Trigger Event" shall occur if:
(i) Lilly terminates this Agreement pursuant to Section
15.5 or 15.7; or
(ii) Ophidian has failed to provide by the date of the
first regulatory submission for Drug Product approval, pilot manufacturing
facilities sufficient to meet the needs of the Commercialization Program for
******************************************************************************,
as the same were projected on the Effective Date, a copy of which is attached as
Schedule 9.2; or
(iii) Ophidian has failed other than as a result of a Force
Majeure referred to in Section 19.4 to supply to Lilly ************************
******** for Bulk Drug Substance for commercial sale ************************
***********************************************************************
***********************************************************************; or
(iv) Ophidian has failed to supply Lilly *****************
****** of Bulk Drug Substance over a period of **************** as a result of
any factor, including a Force Majeure condition and Ophidian has been unable to
establish to the reasonable satisfaction of Lilly that adequate supply will be
available within no more than *********** ; or
(v) Ophidian fails to pay principal or interest when due,
after giving effect to any applicable grace period, upon acceleration or
otherwise, with respect to any indebtedness for borrowed money in an aggregate
principal amount equal to or exceeding ************; or
(vi) Ophidian without proper cause provides notice to
Lilly that Ophidian will not perform its obligations under this Agreement; or
(vii) Ophidian violates, or is alleged to have violated,
any applicable law or regulatory requirement, which violation or alleged
violation renders, in Lilly's reasonable opinion, Ophidian unable to fulfill
its obligations under this Agreement after a period for cure that is reasonable
under the circumstances. Notwithstanding the foregoing, any failure to supply
Bulk Drug Substance under item (iii) or (iv) above shall not be deemed to be a
Trigger Event if such failure is a result of (A) either (i) a delay in
construction due to a delay in making the Product Decision or (ii) a
significant and unexpected increase in demand for Bulk Drug Substance, provided
that in either case Ophidian is using all commercially reasonable efforts to
increase its capacity as soon as practicable, or (B) changes to processes or
methods agreed to by the Project Team or imposed by law or regulatory
requirements, provided that Ophidian is using all commercially reasonable
efforts to implement such changes as soon as practicable, provided, in each of
(A) and (B)
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that Ophidian demonstrates to the reasonable satisfaction of Lilly that
Ophidian has or can obtain adequate financing for such efforts and is otherwise
capable of increasing capacity or implementing changes in a reasonable period
of time.
9.3 TRIGGER EVENT INVOLVING FORCE MAJEURE. If a Trigger Event
occurs pursuant to Section 9.2(b)(iv), which event is the result of a Force
Majeure, and Lilly exercises its rights under Section 9.2 to manufacture Bulk
Drug Substance, Ophidian shall cooperate with and assist Lilly in arranging for
alternate sources of supply so as to avoid interruption of supply. Beginning
**************** after the effective date of Lilly's notice to Ophidian that it
is exercising its rights under Section 9.2, Lilly shall pay Ophidian a royalty
equal to *********** of Net Sales of Drug Product,*****************************
*******************************************************************************
***********************. No royalty will be due in the event a Trigger Event
occurs other than by reason of Force Majeure.
9.4 SPECIFIC PERFORMANCE. Each party agrees that money damages
would not be a sufficient remedy for any breach of this Article 9 of this
Agreement by the other party and that, in addition to all other remedies, the
injured party shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach, and each party further agrees
in advance to the granting of injunctive relief in the other party's favor
without proof of actual damages.
ARTICLE 10
TRADEMARKS
10.1 SELECTION; LICENSE; EXPENSES. Lilly may select one or more
trademarks, as appropriate, for the marketing of the Drug Product. Such
trademarks shall be owned solely by Lilly (collectively, the "TRADEMARKS");
provided, however, that if required by law in any country Ophidian shall own
the Trademarks in that country and grant an exclusive license to Lilly.
Expenses for registration of the Trademarks shall be *************************.
10.2 INFRINGEMENT. Ophidian shall notify Lilly promptly upon
learning of any actual, alleged or threatened infringement of any of the
Trademarks or any unfair trade practices, passing off of counterfeit goods, or
like offenses.
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ARTICLE 11
SUBSEQUENT PRODUCTS
During the term of this agreement and not later than the date of disclosure to
any Third Party (it being understood that this Article 11 does not authorize
disclosure of any information that Ophidian is not otherwise permitted to
disclose), Ophidian shall promptly disclose to Lilly any significant
improvement or enhancement to the Bulk Drug Substance or Drug Product or any
process used or useful in connection with the manufacture thereof unless in the
case of processes the same shall have been developed as part of a collaboration
with a Third Party, the terms of which prohibit disclosure to Lilly. The
licenses granted to Lilly pursuant to this Agreement shall be deemed to include
the right to utilize any such improvement or enhancement solely in connection
with the Bulk Drug Substance and the Drug Product, and to sell Drug Product for
any therapeutic purpose, all in accordance with this Agreement, but shall not
include the right to develop a diagnostic. In addition, Ophidian shall
disclose to Lilly, prior to the disclosure to any Third Party or the filing of
information with any regulatory agency any compound, product, invention,
technique, process, method or the like, in the field of CDAD, whether developed
independently by Ophidian outside of the collaboration contemplated by this
Agreement, or licensed by Ophidian from any Third Party, with the right to
sublicense unless in the case of techniques or processes the same shall have
been developed as part of a collaboration with a Third Party, the terms of
which prohibit disclosure to Lilly (a "PRODUCT IDEA"). Lilly shall have a
period of thirty (30) days following such disclosure to advise Ophidian whether
Lilly desires to engage in negotiations with Ophidian to obtain the right to
commercialize the Product Idea. If Lilly elects to engage in such
negotiations, Ophidian shall thereafter negotiate in good faith with Lilly on
an exclusive basis for an additional period of ninety (90) days in an effort to
reach an agreement by which Lilly may commercialize the Product Idea.
ARTICLE 12
INFORMATION AND REPORTS
12.1 INFORMATION DISCLOSURE. Lilly and Ophidian will disclose and
make available to each other promptly the results of the work conducted in the
Clinical Development Program, Process Development Program and Manufacturing
Program, including without limitation all preclinical, clinical, regulatory,
and other information known by Lilly or Ophidian concerning the Drug Product at
any time during the term of this Agreement. All significant information will
be disclosed to the other party promptly after it is learned or its
significance is appreciated. Lilly shall own and maintain its database of
clinical trial data and adverse drug event information accumulated from all
clinical trials of the Drug Product for which it was responsible.
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12.2 COMPLAINTS. Each party shall maintain a record of all
complaints it receives with respect to the Drug Product. Each party shall
notify the other of any complaint received by it in reasonable detail and
within five (5) days after the event, and, in any event in sufficient time to
allow the responsible party to comply with any and all regulatory requirements
imposed upon it in any country.
12.3 ADVERSE DRUG EVENTS. The parties recognize that the holder of
a drug approval application may be required to submit information and file
reports to various governmental agencies on compounds under clinical
investigation, compounds proposed for marketing, or marketed drugs, including
adverse event reports. The Project Team shall develop and the parties shall
adhere to appropriate procedures to insure compliance with all such applicable
regulatory requirements.
12.4 USE OF INFORMATION. Information contained in reports made
pursuant to this Article 12 or otherwise communicated between the parties will
be subject to the confidentiality provisions of Article 14 below. Lilly may
use any information obtained by it pursuant to this Agreement for the purposes
of obtaining Regulatory Approval for the Drug Product throughout the world.
Each party shall have the right to use the Confidential Information disclosed
by the other party without charge, but only to the extent necessary to enable
each party to carry out their respective roles defined in this Agreement.
Neither party has a license to use Confidential Information disclosed by the
other party for the development, use, manufacture or sale of products other
than the Drug Product.
12.5 PUBLICATIONS. The parties acknowledge that scientific lead
time is a key element of the value of the research to be performed under this
Agreement and further agree that scientific publications must be strictly
monitored to prevent any adverse effect of premature publication. The Project
Team will establish a procedure for publication review and approval and each
party shall first submit to the Project Team or its designee an early draft of
all such publications, whether they are to be presented orally or in written
form, prior to submission for publication. The Project Team or its designee
shall review each such proposed publication in order to avoid the unauthorized
disclosure of a party's Confidential Information and to preserve the
patentability of inventions and data package exclusivity arising from the
research performed in the course of the Agreement. If, within thirty (30) days
of receipt of an advance copy of a party's proposed publication, the Committee
or its designee informs such party that its proposed publication contains
Confidential Information of the other party, then such party shall delete such
Confidential Information from its proposed publication. If, within thirty (30)
days of receipt of an advance copy of a party's proposed publication, the
Committee or its designee informs such party that its proposed publication
could be expected to have a material adverse effect on any Program Patents or
Program Technology, then such party shall delay such proposed publication,
sufficiently long to permit the timely preparation and filing of a patent
application(s) on the information involved. If, within forty five (45) days of
receipt of an advance copy of a party's proposed publication, the Project Team
or its designee fails to approve of
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such party's proposed publication, then such proposed publication shall be
regarded as denied by the Project Team or its designee and shall not be
published.
12.6 REGULATORY REPORTING. The parties acknowledge that either or
both parties will be required to submit information and file reports with
various governmental agencies in addition to those contemplated by the
preceding sections. The Project Team shall establish procedures to be followed
by the parties which will allow each party to comply with its respective
regulatory obligations, and the parties agree to cooperate with each other as
necessary to allow each party to comply with its regulatory obligations. To
the extent practicable, Lilly shall coordinate all contacts with regulatory
agencies, keeping Ophidian appropriately advised of such contacts.
ARTICLE 13
INTELLECTUAL PROPERTY
13.1 OWNERSHIP OF INVENTIONS AND KNOW-HOW. Any significant
improvement or enhancement to the Bulk Drug Substance or Drug Product or any
process used or useful in connection with the manufacture thereof made by
either party during the term of this Agreement or within twelve (12) months
after termination or expiration of this Agreement will be disclosed to the
other party promptly after the disclosing party recognizes the significance
thereof unless in the case of process developments the same shall have been
developed as part of a collaboration with a Third Party, the terms of which
prohibit disclosure to the other party. All Program Patents and Program
Technology shall be owned by the party making the invention claimed or
contained therein or, if such invention is made jointly, shall be owned
jointly, all as determined in accordance with U.S. laws of inventorship. Lilly
shall have the right to select patent counsel and to take such other actions as
are reasonably necessary or appropriate to obtain patent protection with
respect to Program Technology and Ophidian shall cooperate in procuring Program
Patents including jointly owned Program Patents. *******************
**************************************************************************.
Lilly shall provide the Committee with a copy of any patent application which
first discloses any specific Program Technology, prior to filing the first of
such applications in any jurisdiction, if possible, for review and comment by
the Committee or its designees. If Lilly decides not to file or maintain an
application or patent on an invention, or on a joint invention, in any country,
it shall give Ophidian reasonable notice to this effect. After such notice,
Ophidian may file or maintain the application or patent. Lilly agrees to
prosecute and/or maintain the Lilly Patents and to prosecute any interference
proceedings with respect to such Lilly Patents. Ophidian agrees to prosecute
and/or maintain the Ophidian Patents and to prosecute any interference
proceedings with respect to such Ophidian
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Patents. ****************************************************************
******************************************************************. Ophidian
shall provide Lilly with an opportunity to review and comment on the
prosecution of the Ophidian Patents. The party initially responsible for such
prosecution and maintenance of Program Patents, Lilly Patents and Ophidian
Patents (the "Initial Responsible Party") shall give notice to the other party
of any decision to cease such prosecution and maintenance and, in such case,
shall permit the other party at its sole discretion to continue prosecution or
maintenance at its expense. If the other party elects to continue prosecution
or maintenance, the Initial Responsible Party shall execute such documents and
perform such acts as may be reasonably necessary for the other party to
continue prosecution or maintenance.
13.2 INFRINGEMENT CLAIMS BY THIRD PARTIES.
(a) If the manufacture, use or sale of Bulk Drug Substance and/or
Drug Product results in a claim against a party for patent infringement or for
inducing or contributing to patent infringement ("Infringement Claim"), the
party first having notice of an Infringement Claim shall promptly notify the
other in writing. The notice shall set forth the facts of the Infringement
Claim in reasonable detail.
(i) If the Infringement Claim relates to a Third Party patent issued prior
to the Effective Date, Lilly shall have the option to control the defense of
the Infringement Claim and to employ counsel of Lilly's choice. Lilly shall
elect to control the defense or not within forty-five (45) days of receipt of
notice of the Infringement Claim. If it is necessary to take any action prior
to the date of Lilly's decision regarding control of the defense in order to
protect the rights of either party, the parties shall cooperate to ensure that
such action is taken in a timely manner. If Lilly elects not to control the
defense, then Ophidian shall have the obligation to defend such Infringement
Claim and may control such defense and may employ counsel of its choice.
(ii) If the Infringement Claim relates to a Third Party patent issued after
the Effective Date, Lilly shall have the obligation to defend such Infringement
Claim and may control such defense and may employ counsel of its choice.
(iii) The party not controlling the defense of any Infringement Claim shall
have the right to participate in the defense, with counsel of its choice, but
solely at its expense. Lilly and Ophidian shall cooperate in the defense of
any Infringement Claim, and shall provide such assistance to the other party as
may reasonably be requested. No settlement shall be made without the consent
of the other party, which consent shall not be unreasonably withheld. If any
party shall fail to commence defense against any Infringement Claim that it is
obligated to defend within a period of sixty (60) days after receiving or
giving notice of such claim, the other party shall have the right to commence
such defense. The expenses of any defense shall be handled as provided in
subparagraph (b) below.
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(b) With respect to Infringement Claims related to Third Party
patents issued prior to the Effective Date:
(i) If Lilly exercises its option to control such litigation,*************
*********************************************************************.
(ii) If Lilly does not exercise its option to control such litigation,
**********************************************************************.
(iii) Within 60 days from the end of each quarter, Lilly shall send to
Ophidian an invoice for reimbursement of any of the aforementioned expenses
incurred by Lilly for which Lilly is entitled to reimbursement. Ophidian shall
have 30 days from the date of invoice to pay Lilly, either in cash or through a
credit against any then outstanding invoice for Lilly's purchases of Bulk Drug
Substance. ******************************************************************
************. Amounts deferred because of this limitation will be carried
forward to subsequent quarters until paid in full. If payment is not received
within 30 days, whether because of deferral as provided above or other reasons,
simple interest at ******************************** will begin to accrue and
will be paid to Lilly on a monthly basis until the invoice is paid in full.
For example,***********************************************************
***********************************************************************.
(c) With respect to Infringement Claims relating to patents issued
after the Effective Date, the parties shall share all costs and expenses
incurred in conducting the defense of such claims, including the investigation
and settlement thereof on the basis of *********** by Lilly and ******** by
Ophidian. Provided that Lilly is conducting the defense of the Infringement
Claim, Ophidian shall bear its own defense costs. Except as otherwise provided
in this Agreement, any and all royalties, amounts paid in settlement and
damages resulting from settlement or a final nonappealable judgment pursuant to
litigation relating to an Infringement Claim shall be ***********************.
13.3 INFRINGEMENT CLAIMS AGAINST THIRD PARTIES.
(a) Ophidian and Lilly each agrees to take reasonable actions to
protect the Ophidian Patents and Program Patents from infringement and to
protect the Program Technology from unauthorized use, when, from its own
knowledge or upon notice by the other party, the party with knowledge or
receiving notice becomes aware of the reasonable probability that such
infringement or unauthorized use exists.
(b) If any Ophidian Patent, Ophidian Technology, Program Patent or
Program Technology is infringed or misappropriated, as the case may be, by a
Third
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Party, the party to this Agreement first having knowledge of such infringement
or misappropriation, or knowledge of a reasonable probability of such
infringement or misappropriation, shall promptly notify the other in writing.
The notice shall set forth the facts of such infringement or misappropriation
in reasonable detail. The owner of the patent or technology shall have the
primary right, but not the obligation, to institute, prosecute, and control any
action or proceeding with respect to infringement or misappropriation of such
patent or technology by it own counsel and the other party shall have the
right, at its own expense, to be represented in such action by its own counsel.
The Committee shall determine which party shall have the primary responsibility
to institute, prosecute, and control any action or proceeding with respect to
infringement or misappropriation of jointly owned patents or technology and the
other party shall have the right, at its expense, to be represented by its
counsel. If the party having the primary right or responsibility to institute,
prosecute, and control such action or prosecution fails to do so within a
period of one hundred twenty (120) days after receiving notice of the
infringement, the other party shall have the right to bring and control any
such action by counsel of its own choice, and the other shall have the right,
at its own expense, to be represented in any such action by counsel of its own
choice. If one party brings any such action or proceeding, the second party
may be joined as a party plaintiff and, in case of joining, the second party
agrees to give the first party reasonable assistance and authority to file and
to prosecute such suit. The costs and expenses of all suits brought by a party
under this Section 13.3 shall be reimbursed to such filing party and then to
the participating party, pro rata, out of any damages or other monetary awards
recovered therein in favor of Ophidian or Lilly. Any remaining damages shall
then be split (i) ******************* to Ophidian and ****************** to
Lilly. No settlement or consent judgment or other voluntary final disposition
of a suit under this Section 13.3 may be entered into without the joint consent
of Ophidian and Lilly (which consent shall not be unreasonably withheld).
13.4 NOTICE OF CERTIFICATION. Ophidian and Lilly each shall
immediately give notice to the other of any certification filed under the U.S.
"Drug Price Competition and Patent Term Restoration Act of 1984" claiming that
a Program Patent is invalid or that any infringement will not arise from the
manufacture, use or sale of any product by a third party. If Ophidian decides
not to bring infringement proceedings against the entity making such a
certification, Ophidian shall give notice to Lilly of its decision not to bring
suit within twenty-one (21) days after receipt of notice of such certification.
Lilly may then, but is not required to, bring suit against the party that filed
the certification. Any suit by Lilly or Ophidian shall either be in the name
of Lilly or in the name of Ophidian, or jointly by Lilly and Ophidian, as may
be required by law. 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.
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13.5 PATENT TERM EXTENSIONS. The parties shall cooperate with each
other in gaining patent term extension wherever applicable to Program Patents
covering Drug Products. Lilly and Ophidian shall mutually determine which
patents shall be extended. All filings for such extension shall be made by the
party to whom the patent is assigned, provided, however, that in the event that
the party to whom the patent is assigned elects not to file for an extension,
such party shall (i) inform the other party of its intention not to file and
(ii) grant the other party the right to file for such extension.
ARTICLE 14
CONFIDENTIALITY AND NONDISCLOSURE
14.1 CONFIDENTIALITY. For a period of five (5) years following the
later of: (a) the termination of this Agreement or (b) if Lilly is marketing
the Drug Product the date on which Lilly ceases to market the Drug Product,
each party shall maintain in confidence all Confidential Information disclosed
by the other party, and shall not, except as contemplated by this Agreement,
use it for its benefit or the benefit of others, without the consent of the
disclosing party. Documents made available to the other party shall remain the
property of the disclosing party and shall be returned upon written request,
except that one copy of all such information may be retained for legal archival
purposes.
14.2 AUTHORIZED DISCLOSURE. Each party may disclose the
Confidential Information for the purpose of making various regulatory filings
and complying with applicable governmental regulations, and to consultants and
others having a need to know for the purposes of development, manufacture or
marketing of the Drug Product pursuant to this Agreement, provided that such
consultants and others shall also agree to appropriate notice and protective
provisions.
14.3 NONDISCLOSURE OF AGREEMENT. Neither party shall disclose any
information about this Agreement, including its existence, without the prior
written consent of the other. Consent shall not be required, however, for
disclosures to tax authorities or to bona fide potential sublicensees, to the
extent required or contemplated by this Agreement, provided, that in connection
with such disclosure, each party agrees to use its commercially reasonable
efforts to secure confidential treatment of such information. Each party shall
have the further right to disclose the terms of this Agreement as required by
applicable law, including the rules and regulations promulgated by the
Securities and Exchange Commission and to disclose such information to
shareholders or potential investors as is customary for publicly-held
companies, provided the disclosing party provides to the other party a copy of
the information to be disclosed and an opportunity to comment thereon prior to
such disclosure and consults within a reasonable time in advance of the
proposed disclosure with the other on the necessity for the disclosure and the
text of the proposed release.
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14.4 SURVIVAL. The confidentiality obligations of this Article 14
shall survive the termination or expiration of the Agreement.
14.5 PRESS RELEASES. Attached hereto as Exhibit F is a press
release, which may be released upon the execution of this Agreement. All
xxxxxx xxxxx releases by either party relating to the collaboration
contemplated by this Agreement shall be approved in advance by each party,
except for those communications required by law.
ARTICLE 15
TERM AND TERMINATION OF AGREEMENT
15.1 TERM. This Agreement shall become effective on the Effective
Date and shall continue in effect until the later of 20 years from the
Effective Date or the date on which all Ophidian Patents have expired in all
Major Markets, unless sooner terminated as provided below or by mutual written
agreement of the parties.
15.2 TERMINATION FOR MATERIAL BREACH. Either party shall have the
right to terminate this Agreement after ninety (90) days written notice to the
other in the event the other is in material breach of this Agreement, unless
the other party cures the breach before the expiration of such period of time.
Such notice shall set forth in reasonable detail the specifics of the breach.
In the event of termination hereunder by Lilly, all licenses granted under this
Agreement to Lilly shall not be affected and shall continue in full force and
effect, and Lilly shall have the right to exercise all licenses provided for in
Section 9.2. All licenses granted under this Agreement to Ophidian in such
event shall automatically terminate upon such termination by Lilly. In the
event of termination hereunder by Ophidian, licenses to Ophidian Patents and
Ophidian Technology granted hereunder to Lilly shall terminate, and Ophidian
shall have a limited non-exclusive, worldwide, fully paid license with the
right to sublicense to the Lilly Patents, Lilly Technology, Lilly Program
Patents and Lilly Program Technology to make, have made use, have used, import,
offer for sale, sell, and have sold Bulk Drug Substance and Drug Product.
Notwithstanding the foregoing, Lilly shall be permitted to distribute and sell
all supplies of Drug Product in its inventory at the time of termination until
such supplies are exhausted.
15.3 TERMINATION BASED ON RESULTS OF IMMUNOLOGY TESTS. Within
sixty (60) days following completion of the immunology tests set forth on
Exhibit E, Ophidian shall deliver to Lilly a detailed report of the results
thereof. If Lilly in good faith concludes that the results of such tests
suggests that the probability that the Drug Product can be successfully
developed is significantly diminished, Lilly
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may, within thirty (30) days following receipt of the report described above,
elect to terminate this Agreement upon written notice to Ophidian. In such
event, all licenses granted to Lilly and Ophidian under this Agreement shall
terminate and Lilly shall have no further obligations under this Agreement.
15.4 TERMINATION BY LILLY FOR FAILURE TO MEET GOALS. Ophidian
acknowledges that the development and commercialization of pharmaceutical
products such as the Drug Product is an inherently uncertain process, and that
there can be no assurance either that the Drug Product can be successfully
developed or that the potential commercial rewards available for the
commercialization of the Drug Product, when weighed against the costs and
uncertainties involved and compared to Lilly's other commercial opportunities,
will be sufficient to justify Lilly's continued efforts to develop and/or
commercialize the Drug Product. Lilly agrees to work diligently, consistent
with accepted business practices, to fulfill its obligations under this
Agreement, devoting the same degree of attention and diligence to such efforts
as it devotes to such activities for its own products of comparable risk and
market potential. If Lilly in good faith concludes that further efforts under
this Agreement would not be commercially reasonable for Lilly, it may so notify
Ophidian, and the parties shall then promptly meet to explore whether any steps
may be taken that would lead Lilly to conclude that further efforts would be
justified. In the event the parties are unable to agree to continue efforts
within sixty (60) days of Lilly's notice to Ophidian provided for above, Lilly
shall be entitled to terminate this Agreement upon written notice to Ophidian.
Further, if in Lilly's sole opinion, Ophidian fails to gain adequate patent
protection for the CDAD Products, Lilly may terminate this Agreement upon
written notice to Ophidian. Upon termination by Lilly, the licenses under
Ophidian Patents and Ophidian Technology granted to Lilly under this Agreement
shall terminate, Lilly shall have no further obligation under this Agreement,
and Ophidian shall have a limited non-exclusive, worldwide, fully paid
license, with the right to sublicense, to the Lilly Patents, Lilly Technology,
Program Patents and Program Technology to make, have made, use, have used,
import, offer for sale, sell, and have sold Bulk Drug Substance and Drug
Products.
15.5 TERMINATION UPON INSOLVENCY. This Agreement may be terminated
by either party upon notice to the other should the other party:
(a) become insolvent; or
(b) file a petition under any bankruptcy or insolvency law or have any
such petition filed against it which has not been stayed within 60 days of such
filing.
15.6 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination of the
Agreement shall not affect any accrued rights of either party. As provided
herein, certain provisions, including, in certain circumstances, provisions
relating to
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licensing of intellectual property and confidentiality are intended to survive
termination of this Agreement.
15.7 RIGHTS UPON TERMINATION FOR BREACH. If a party (the
"Non-Breaching Party") terminates this Agreement under Article 15 following
material breach by the other party (the "Breaching Party"), (a) the Breaching
Party shall return to the Non-Breaching Party all Confidential Information and
materials received from the Non-Breaching Party during the Agreement, (b) the
Breaching Party shall cease all use of the Confidential Information and
materials received from the Non-Breaching Party for any purpose, except that
the Breaching Party may keep a copy of all documents for record keeping
purposes only, and (c) the Breaching Party shall deliver to the Non-Breaching
Party all data and information developed by the Breaching Party prior to such
termination as a result of the activities under this Agreement which can
reasonably be viewed as necessary or useful to obtain governmental regulatory
approvals.
15.8 ASSISTANCE FOLLOWING TERMINATION. In the event Lilly elects
to terminate this Agreement pursuant to Section 15.4 and if Ophidian so
requests, Lilly shall provide reasonable assistance to Ophidian for a period of
ninety (90) days following the date of notice of termination. During this
period, Lilly shall provide Ophidian copies of its registration dossier for the
Drug Product, clinical data and unrestricted permission to use the dossier and
data for development, registration and commercialization of the Drug Product;
written Drug Product process procedures and training in these procedures; and
assistance in transferring contracts with Third Parties (e.g. clinical test
sites, contract research organizations, manufacturers of Drug Product, and
marketers) to Ophidian. Lilly will also agree to negotiate in good faith the
sale of any dedicated equipment, work in process, and finished product
inventories and supplies then owned by Lilly provided that the same would not
be disruptive to Lilly's other operations. In addition, Lilly shall grant to
Ophidian the licenses provided for in Section 15.4. In the event Lilly has
registered a trademark or tradename for use in connection with the Drug
Product, Ophidian shall also have a paid-up license to use such trademark or
tradename, provided however that Ophidian shall not be entitled to such license
in the event the trademark or tradename chosen by Lilly is also associated with
other Lilly products (such as the "huma" association between humulin and
humalog).
ARTICLE 16
INDEMNITY
(a) Each party hereby agrees to indemnify, defend and hold
harmless the other party and its Affiliates, and their respective officers,
directors, agents and employees from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or losses, including reasonable
attorneys' fees and other costs of
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defense other than claims for infringement as provided in Section 13.2,
("Claims") resulting directly or indirectly from the manufacture, use,
handling, storage, sale or other disposition of Bulk Drug Substance or Drug
Product by the indemnifying party, its Affiliates, agents or sublicensees, but
only to the extent such Claims result from the negligence of the indemnifying
party or its employees and agents and do not result from the negligence of the
party seeking indemnification.
(b) Lilly shall indemnify defend and hold harmless Ophidian, its
Affiliates, and their respective officers, directors, agents and employees from
and against all Claims based upon the death or actual bodily injury or property
damage resulting from the manufacturing (but not including manufacture of the
Bulk Drug Substance), packaging, labeling, handling, storage, promotion,
marketing, distribution, use or sale of the Drug Product, except to the extent
caused by the negligence or willful misconduct of Ophidian or the material
breach by Ophidian of this Agreement, or caused prior to Ophidian placing Bulk
Drug Substance on the common carrier selected by Lilly for delivery to Lilly.
(c) Ophidian shall indemnify, defend and hold harmless Lilly, its
Affiliates, and their respective officers, directors, agents and employees from
and against all Claims based upon the death or any actual bodily injury or
property damage resulting from its manufacture or handling of Bulk Drug
Substance (including, without limitation, any Claims relating to release of
materials into the environment) except to the extent caused by the negligence
or willful misconduct of Lilly.
(d) Any entity entitled to indemnification under this Article
shall give prompt written notice to the indemnifying party of any Claims with
respect to which it seeks indemnification, and the indemnifying party shall
have the option to assume the defense of such Claims with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed by the
indemnifying party with counsel so selected, the indemnifying party will not be
obligated to pay the fees and expenses of any separate counsel retained by the
indemnified party with respect to such Claims. Except with the prior consent
of the indemnified party, which consent shall not be unreasonably withheld, the
indemnifying party may not enter into any settlement of such litigation unless
such settlement includes an unqualified release of the indemnified party.
ARTICLE 17
REPRESENTATIONS AND WARRANTIES
17.1 RIGHT, POWER AND AUTHORITY. Each of Ophidian and Lilly
represents and warrants to the other that as of the Effective Date it has full
right, power and authority to enter into this Agreement, including the right to
grant the licenses granted hereunder.
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17.2 ABSENCE OF LITIGATION. As of the Effective Date, each party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such party's activities related to this Agreement have violated, or by
conducting the activities as contemplated herein would violate, any of the
intellectual property rights of any other person. To the best of Ophidian's
and Lilly's knowledge, there is no material unauthorized use, infringement or
misappropriation of any of its intellectual property rights licensed hereunder.
17.3 NO APPROVALS OR CONSENTS. Each party represents and warrants
to the other that no approval or consent of a governmental agency or
instrumentality is required for the authorization, execution, or delivery by it
of this Agreement.
17.4 PATENTS; PRIOR ART. Except as Ophidian has otherwise advised
Lilly in writing, each of Ophidian and Lilly represents and warrants to the
other that as of the Effective Date, to the best of its respective knowledge,
it has sufficient legal and/or beneficial title and ownership under its
intellectual property rights necessary for it to fulfill its obligations under
this Agreement and that it is not aware of any communication alleging that it
has violated or by conducting its business as contemplated by this Agreement
would violate any of the intellectual property rights of any other person, and
that to the best of its knowledge there is no material unauthorized use,
infringement or misappropriation of any of its intellectual property rights
relevant to this Agreement. Ophidian represents and warrants to Lilly that it
has advised Lilly in writing of any and all Third Party licenses necessary for
Ophidian to possess all necessary rights to all Third Party intellectual
property rights known to Ophidian that are required for the manufacture, use
and sale of the Bulk Drug Substance and the Drug Product, and has provided
Lilly with a true and correct copy of any relevant license agreement. As used
herein, "intellectual property rights" means all patent rights, copyrights,
trademarks, trade secret rights, chemical and biological material rights and
know-how rights necessary or useful to make use or sell the Bulk Drug Substance
and/or Drug Product. Ophidian has, or will obtain at its sole cost, all
necessary licenses to the Polson Patents (U.S. Patent Nos. 4,357,272 and
4,550,019), the Brookhaven Patent (U.S. Patent NO. 4,952,496) and the
Xxxxx-Xxxxx patents now owned by Stanford University.
17.5 PRIOR DATA. Ophidian represents and warrants to Lilly that it
has made available to Lilly (to the extent the same exists and is material to
accessing the commercial, medical, clinical or regulatory potential of the Drug
Product) all toxicology studies, clinical data, manufacturing process data and
other information in its possession regarding the Bulk Drug Substance and/or
Drug Product including all events or information that would be reportable to
the FDA under 21 C.F.R. 200 et. seq., and that to the best of its knowledge,
such data and information is accurate and complete and is what it purports to
be.
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17.6 NO DEBARRMENT. Each party represents and warrants to the
other that it will comply at all times with the provisions of the Generic Drug
Enforcement Act of 1992 and will upon request certify in writing to the other
that none of it, its employees, or any person providing services to such party
in connection with the collaboration contemplated by this Agreement have been
debarred under the provisions of such Act.
ARTICLE 18
GOVERNING LAW; DISPUTE RESOLUTION
18.1 GOVERNING LAW. The Agreement shall be governed by the laws of
the State of Indiana, without regard to Indiana choice of law provisions.
18.2 DISPUTE RESOLUTION. In the event of any dispute relating to
this Agreement or the collaborative effort contemplated hereby, the parties
shall prior to instituting any lawsuit on account of such dispute, refer such
dispute to the Chief Executive Officer of Ophidian and the President of Lilly's
Infectious Diseases and Generics Global Business Unit (or any successor
position having principal responsibility for Lilly's infectious diseases
products) who shall, as soon as practicable, and with the assistance of a
mediator as provided below, attempt in good faith to resolve the dispute. The
parties shall select a mediator who shall serve as an impartial facilitator of
such discussion. If the parties are unable to agree upon a mediator, a
mediator shall be designated by the American Arbitration Association. The
mediation shall be treated as a settlement discussion and therefore will be
confidential and privileged. The mediator may not testify for either party in
any later proceeding relating to the dispute, and no recording or transcript
shall be made of the mediation proceedings. Each party shall bear its own
costs in the mediation and the fees and expenses of the mediator shall be
shared equally by the parties. Either party shall be free to institute
litigation if such dispute is not resolved within ninety (90) days of the first
written request for mediation. Notwithstanding anything in this Agreement to
contrary, either party shall be entitled to institute litigation immediately if
the same shall be necessary to prevent irreparable harm to any party.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 NOTICES. All notices required or permitted to be given under
this Agreement shall be in writing and shall be mailed by registered or
certified mail addressed to the signatory to whom such notice is required or
permitted to be given
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and transmitted by facsimile to the number indicated below. All notices shall
be deemed to have been given when mailed as evidenced by the postmark at the
point of mailing or a confirmed facsimile transmission.
All notices to Lilly shall be addressed to Lilly as follows:
Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
All notices to Ophidian shall be addressed as follows:
Ophidian Pharmaceuticals, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: President
Fax: (000) 000-0000
Any party may, by written notice to the others, designate a new address or fax
number to which notices to the party giving the notice shall thereafter be
mailed or faxed.
19.2 FOREIGN EXCHANGE. Sales and expenses of the parties under
this Agreement which are in currencies other than United States dollars shall
be converted into United States dollars according to the parties' customary and
usual currency translation procedures which shall be consistent with the
procedures used throughout the parties' operations and shall be in accordance
with GAAP, consistently applied.
19.3 NON COMPETITION. During the term of this Agreement, neither
Lilly nor Ophidian shall develop or market any antibody based treatment for
CDAD, except the Drug Product; provided, however, that (i) Lilly shall be free
to develop or market a product having activity for CDAD if such activity is
incidental to a broader spectrum product whose primary indication is not for
treatment of CDAD, (ii) Lilly shall be permitted to market CDAD products as
part of pharmacy benefit management, wholesale distribution, mail order
pharmacy, or similar businesses, (iii) Lilly shall be free to develop or market
any product acquired by Lilly as a result of any business combination between
Lilly and any other company, and (iv) Ophidian shall be permitted to develop or
market any product containing CDAD
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antibodies provided such product is not therapeutically effective against CDAD.
In the event Lilly develops and markets an antibody based treatment for CDAD
acquired as a result of a business combination referred to in (iii) above,
Ophidian may elect to terminate this Agreement upon ninety (90) days written
notice to Lilly, unless Lilly elects to discontinue marketing of the acquired
product within sixty (60) days of receipt of Ophidian's notice of termination.
Such termination shall be treated as if Lilly had terminated this Agreement
pursuant to Section 15.4.
19.4 FORCE MAJEURE. If either party is affected by any
extraordinary, unexpected and unavoidable event such as acts of God, floods,
fires, riots, war, accidents, labor disturbances, breakdown of plant or
equipment, lack or failure of transportation facilities, unavailability of
equipment, sources of supply or labor, raw materials, power or supplies,
infectious diseases of animals, or by the reason of any law, order,
proclamation, regulation, ordinance, demand or requirement of the relevant
government or any sub-division, authority or representative thereof, or by
reason of any other cause whatsoever (provided that in all such cases the party
claiming relief on account of such event can demonstrate that such event was
extraordinary, unexpected and unavoidable by the exercise of reasonable care)
("Force Majeure") it shall as soon as reasonably practicable notify the other
party of the nature and extent thereof and take all reasonable steps to
overcome the Force Majeure and to minimize the loss occasioned to that other
party. Neither party shall be deemed to be in breach of this Agreement or
otherwise be liable to the other party by reason of any delay in performance or
nonperformance of any of its obligations hereunder to the extent that such
delay and nonperformance is due to any Force Majeure of which it has notified
the other party and the time for performance of that obligation shall be
extended accordingly, subject however, to the rights of Lilly to exercise the
licenses granted pursuant to Section 9.2 should a Trigger Event occur. During
any period that adequate supply of Bulk Drug Substance is not available as a
result of any Force Majeure, Lilly may purchase and use Bulk Drug Substance
from any other supplier.
19.5 ENTIRETY OF AGREEMENT. This Agreement, its exhibits and
schedules and the Stock Purchase Agreement of even date herewith, sets forth
the entire agreement and understanding of the parties relating to the subject
matter contained herein and merges all prior discussions and agreements between
them. No party shall be bound by any representation other than as expressly
stated in this Agreement, or by a written amendment to this Agreement signed by
authorized representatives of both parties.
19.6 NON-WAIVER. The failure of a party in any one or more
instances to insist upon strict performance of any of the terms and conditions
of this Agreement shall not be construed as a waiver or relinquishment, to any
extent, of the right to assert or rely upon any such terms or conditions on any
future occasion.
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19.7 DISCLAIMER OF AGENCY. This Agreement shall not constitute any
party the legal representative or agent of another, nor shall any party have
the right or authority to assume, create, or incur any Third Party liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of another except as expressly set forth in this Agreement.
19.8 SEVERABILITY. In the event any term of this Agreement is or
becomes or is declared to be invalid or void by any court of competent
jurisdiction, such term or terms shall be null and void and shall be deemed
deleted from this Agreement, and all the remaining terms of the Agreement shall
remain in full force and effect.
19.9 ASSIGNMENT. Lilly may discharge any obligations and exercise
any right hereunder through an Affiliate. References to Lilly shall include
any Affiliate of Lilly to whom such an assignment or delegation has been made
or ratified. Except as provided in this Section, neither Lilly, nor Ophidian
shall delegate duties of performance or assign, in whole or in part, rights or
obligations under this Agreement without the prior written consent of the other
party, and any attempted delegation or assignment without such written consent
shall be of no force or effect. Subject to the restrictions contained in the
preceding sentence, this Agreement shall be binding upon the successors and
assigns of the parties.
19.10 HEADINGS. The headings contained in this Agreement have been
added for convenience only and shall not be construed as limiting.
19.11 LIMITATION OF LIABILITY. No party shall be liable to another
for indirect, incidental, consequential or special damages, including but not
limited to lost profits, arising from or relating to any breach of this
Agreement, regardless of any notice of the possibility of such damages.
Nothing in this Section is intended to limit or restrict the indemnification
rights or obligations of any party.
19.12 INTERPRETATION This Agreement has been jointly prepared by
the parties and their respective legal counsel and shall not be strictly
construed against either party.
19.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
19.14 COMPLIANCE WITH LAWS. Each party shall, and shall cause its
respective Affiliates to, comply in all material respects with all federal,
state, local and foreign laws, statutes, rules and regulations applicable to
the parties and their respective activities under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
OPHIDIAN PHARMACEUTICALS, INC.
By: s/s Xxxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxx
President
XXX XXXXX AND COMPANY
By: s/s August X. Xxxxxxxx
------------------------------------
August X. Xxxxxxxx
Executive Vice President
Science and Technology
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**** Indicates where confidential material has been omitted and filed
separately with the Commission
EXHIBIT A
PURCHASE PRICE FOR BULK DRUG SUBSTANCE
1. The purchase price to be paid to Ophidian by Lilly for Bulk Drug
Substance for commercial sales shall be **************************
***************************************************************.
2. The price as determined in paragraph 1 above shall be subject to the
following adjustments:
(A) For purchases during the ************************ following the
date of first commercial sale of the Drug Product (the "Product
Launch"), the purchase price shall be *************************.
(B) For purchases during the******************* following the date of
Product Launch, the purchase price shall be *****************
***********************.
(C) For purchases ************************ following the date of
Product Launch there shall be **************************
***********************.
(D) There shall be *********************************************
***********************************************************. This
adjustment shall be calculated as follows:
(i) **************************************************
*************************************************
(ii) **************************************************
*************************************************
(iii) **************************************************
*************************************************
(E) "COPS" shall mean ************************************
******************************************************.
3. ***********************************************************
***********************************************************
44
4. *****************************************************************
*****************************************************************
5.
(A) In the event Ophidian exercises its right to terminate pursuant to
paragraph 3, Ophidian shall provide assistance to Lilly for an
Assistance Period sufficient to permit Lilly to develop an
alternative source of supply, but not more than 4 years, such
Assistance Period commencing on the day of Lilly's receipt of
written notice of termination. During the Assistance Period,
Ophidian shall provide Lilly with copies of its Establishment
License dossier and all other regulatory filings and unrestricted
permission to use the dossier and other regulatory filings for
development, registration and commercialization of the Drug
Product; copies of written manufacturing procedures and training
in these procedures; master cell banks and working cell banks; and
assistance in transferring contracts with Third Parties (e.g., hen
facilities, veterinarians, Bulk Drug Substance manufacturers) to
Lilly if requested by Lilly. Ophidian will grant an option to
Lilly exercisable to purchase any and all dedicated facilities and
equipment where it has the legal right to transfer title, work in
process, finished product inventories and supplies then owned by
Ophidian, at the fair market value thereof as determined by an
appraisal.
(B) During the Assistance Period Ophidian will not be required to
initiate new activities or make further capital investments;
however, it will be expected to, in good faith, continue to
manufacture and supply Bulk Drug Substance to enable the
continuity of supply until an alternative source of supply can be
obtained and facilitate the orderly transfer of activities and
information.
(C) Both Ophidian and Lilly shall bear their own costs incurred during
the Assistance Period *************************************
*********************************************************.
Appraisals shall be prepared by a nationally recognized appraisal
firm acceptable to the parties, the cost of which shall be borne
by the party requesting the appraisal. If the parties are unable
to agree upon an acceptable appraiser with thirty (30) days, each
party shall appoint its own nationally recognized appraisal firm
which shall promptly prepare an appraisal of the fair market
value, and the average of the two appraisals shall be the fair
market value. In such event each party shall bear the expenses of
its own appraisal firm.
45
(D) It is the intent of the parties that Lilly be unencumbered in its
efforts to take on the responsibilities of Ophidian or to arrange
for a third party to assume such obligation. Insofar as Enabling
Technology is needed from Ophidian, it is the intent of the
parties that Lilly's rights to such technology shall survive
termination. Insofar as the use of the Tradename owned by
Ophidian is desired, Lilly shall be deemed to have a royalty free
license to the Tradename upon notice of termination by Ophidian.
All licenses granted to Lilly under this Agreement shall not be
affected and shall continue in full force and effect and Lilly
shall have the right to manufacture or have manufactured, use and
sell the Bulk Drug Substance. All licenses to Ophidian in such
event shall automatically terminate. Lilly shall pay Ophidian a
royalty equal to **************** of Net Sales of Drug Product
manufactured by Lilly or Third Parties under license from Lilly on
a country-by-country basis until expiration of applicable
Ophidian or Program patents in that country. In the event that
Lilly later terminates and/or ceases activities and/or ceases all
sales of Drug Product, all license under Ophidian Patents,
Ophidian Program Patents, Ophidian Program Technology and Ophidian
Technology granted to Lilly under this Agreement shall terminate.
6. **************************************************************
**************************************************************
7. Ophidian shall supply all Bulk Drug Substance necessary for the Clinical
Development Program, the Product Process Development Program, validation
testing and similar matters. **************
*************************************************************
8. Before or during the first year following product launch for the Drug
Product, Lilly shall purchase not less than of Lilly's forecast at
product launch for sales during such year.
9. All terms used but not defined herein shall have the meanings set forth
in the Agreement.
46
**** Indicates where confidential material has been omitted and filed
separately with the Commission
EXHIBIT B
TERMS AND CONDITIONS OF SALE OF BULK DRUG SUBSTANCE
BULK DRUG SUBSTANCE SUPPLY
All sales of Bulk Drug Substance from Ophidian to Lilly shall be subject to the
following terms and conditions.
Section 1. Definitions
As used in this Exhibit B, the following terms shall have the meanings set
forth below. Capitalized terms used but not defined in this Exhibit B shall
have the meanings set forth in the Agreement.
1.1. "Contract Requirements" shall mean ************************* of
Lilly's requirements for Bulk Drug Substance. Lilly may at its option commence
a commercial scale process development project for the Bulk Drug Substance to
enable Lilly to register its facilities or those of a Third Party contingent
manufacturer in the registration. Lilly or the Third Party may manufacture
limited quantities of the Bulk Drug Substance as part of that development
project. Lilly shall have the right to make and sell Drug Product made from
limited quantities of Bulk Drug Substance that Lilly or its Third Party
manufacturers have produced, in jurisdictions other than Major Markets. Lilly
shall pay Ophidian a ************** on Net Sales of such limited quantities and
Ophidian reserves the right to be the sole supplier of any of the materials,
including but not limited to ************, used in the facility. Ophidian's
Technology and Ophidian's Program Technology shall not be used in the
contingent facilities to manufacture any substance other than the Bulk Drug
Substance. Ophidian shall have the right to have a representative on site and
audit these facilities at reasonable intervals upon reasonable notice.
1.2. "Latent Defects" shall mean defects that cause the Bulk Drug
Substance to fail to conform to the Bulk Drug Substance Specifications or
otherwise fail to conform to the warranties provided by Ophidian hereunder,
which defects are not discoverable upon reasonable physical inspection and
testing using the methodology specified in the Manufacturing Requirements
Document.
1.3. "Manufacturing Requirements Document" shall mean a manual
containing certain specifications, procedures, methods and personnel contacts
relating to the manufacturing and supply of the Bulk Drug Substance by Ophidian
to Lilly that will be compiled and agreed upon by the Project Team prior to the
47
commencement of manufacture of the Bulk Drug Substance by Ophidian. Sections
of the Manufacturing Requirements Document may be modified from time to time by
the Project Team.
1.4. "Bulk Drug Substance Specifications" shall mean the
specifications for Bulk Drug Substance that are included in the Manufacturing
Requirements Document.
Section 2. Manufacture and Supply of Bulk Drug Substance
2.1. Pursuant to the terms and conditions of this Agreement, Lilly
shall purchase or have purchased from Ophidian the Contract Requirements, and
Ophidian shall manufacture, sell and deliver to Lilly such quantities of Bulk
Drug Substance. Ophidian shall not manufacture or sell Bulk Drug Substance for
or to any other person for human therapeutic use.
2.2. Bulk Drug Substance shall be manufactured to conform with the
Bulk Drug Substance Specifications. The Bulk Drug Substance Specifications may
be modified from time to time by the Project Team.
Section 3. Forecasts and Orders
3.1. At the time of *****************************, Lilly will supply
Ophidian with a non-binding estimate of Bulk Drug Substance requirements for
the ******************* following *********************. Beginning with
******** ************* Lilly shall provide Ophidian with a non-binding rolling
forecast, provided **********, for each of the **************. If Lilly
believes that market demand will require Ophidian to expand its manufacturing
capacity, it will advise Ophidian as soon as possible.
3.2. Orders for Bulk Drug Substance may be submitted to Ophidian by
Lilly or by one or more Affiliates of Lilly. Lilly will guarantee payment by
its Affiliates. When possible, orders shall be placed ************** in
advance of expected shipment.
3.3. Each Lilly order shall be governed by the terms of the Agreement
(including this Exhibit B) and none of the terms or conditions of Lilly's
purchase order or any acknowledgment form from Ophidian shall be applicable,
except those specifying quantity ordered, delivery dates, special supply
instructions and invoice information.
Timing of shipments shall be agreed upon between the parties.
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Section 4. Price
4.1. The price for Bulk Drug Substance to be delivered during the
term of this Agreement is set forth in Exhibit A to the Agreement, which is
attached hereto and made a part hereof.
4.2. Bulk Drug Substance shall be delivered to Lilly ***************,
by a common carrier selected by Lilly. ****************************************
4.3. Ophidian shall invoice Lilly or the Lilly Affiliate designated
on each order upon shipment of Bulk Drug Substance. Invoicing and payment
shall be in United States Dollars. Payment shall be made by Lilly or its
Affiliate net ********************** from the date of invoice.*****************
********************************************************************** Lilly
shall guarantee payment by its Affiliates.
4.4. Any federal, state, county, or municipal sales or use tax,
excise or similar charge, or other tax assessment, foreign or domestic, (other
than that assessed against income), assessed or charged on the sale of Bulk
Drug Substance sold pursuant to this Agreement shall be paid by Lilly or its
Affiliate.
4.5. If Bulk Drug Substance Specifications are modified pursuant to
Subsection 2.2 hereof and such modification results in the requirement to
rework otherwise acceptable Bulk Drug Substance, each party shall be
responsible for the rework costs resulting from the Bulk Drug Substance
specification changes it initiates.********************************************
*******************************************************************************
Section 5. Manufacture of Bulk Drug Substance
5.1. Bulk Drug Substance shall be manufactured in accordance with
GMP. Ophidian shall promptly advise Lilly of any proposed process change,
which change must be approved by Lilly (and if necessary the appropriate
regulatory authorities) prior to its implementation by Ophidian. Such approvals
shall not be unreasonably withheld by Lilly.
5.2. Lilly shall have the right to audit Ophidian and its contractors
for compliance with the manufacturing process referenced in the appropriate
regulatory filings, GMP's, GLP's and applicable regulatory requirements at
reasonable intervals. Such audits shall be scheduled at mutually agreeable
times upon at least ten (10) days advance written notice to Ophidian. Ophidian
agrees to inform Lilly in advance of any regulatory inspection which affects
the manufacture of the Bulk Drug Substance, to permit a Lilly representative to
be present at the
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time of such inspection and to promptly advise Lilly of the results of such
inspection. In the event of an FDA inspection (or other regulatory authority)
which involves the Bulk Drug Substance, Lilly shall be immediately informed of
the issuance of a notice of inspection. In the event that there are
inspectional observations (or their equivalent), Lilly shall be informed
immediately and shall have the opportunity to review and have input to the
response. If during manufacture of any lot of Bulk Drug Substance, any rework
or remanufacture is required in order to meet the Bulk Drug Substance
Specifications, Ophidian shall conduct such reworks or remanufacture only
pursuant to the referenced procedures in the appropriate regulatory filings.
Ophidian shall inform Lilly of any inadvertent deviation from the manufacturing
process referenced in the appropriate regulatory filings for the Bulk Drug
Substance or from GMP. Both the notification and the Lilly response shall be
in writing before the lot will be given final disposition. Lilly, at its
option, upon 10 days prior notice to Ophidian, may have Lilly personnel present
at the Ophidian facility where Bulk Product is manufactured to monitor
manufacturing activities. The observing and monitoring of Ophidian's
operations by Lilly personnel, or the consultation by Lilly personnel with
personnel of Ophidian, shall in no way relieve Ophidian of its responsibility
hereunder.
5.3. Ophidian shall provide certificates of analysis to Lilly for
each shipment of Bulk Drug Substance delivered hereunder as specified in the
Manufacturing Requirements Document.
5.4. Each party shall promptly advise the other of any safety or
toxicity problem of which either party becomes aware regarding Bulk Drug
Substance or intermediates used in the manufacture of Bulk Drug Substance.
Section 6. Acceptance of Bulk Drug Substance
(a) Lilly shall have a period of thirty (30) days from the date of
receipt of Bulk Drug Substance at the Lilly facility designated in the purchase
order to inspect any shipment of Bulk Drug Substance to determine whether that
shipment conforms to the Bulk Drug Substance Specifications. That inspection
shall be performed in accordance with the Manufacturing Requirements Document.
The parties may agree from time to time to revise the analytical methods with
the revisions to become effective as of the date agreed by the parties.
(b) If Lilly determines the Bulk Drug Substance does not conform
to the Bulk Drug Substance specifications it shall notify Ophidian by telephone
with a written confirmation. If Ophidian agrees that the Bulk Drug Substance
does not conform to the Bulk Drug Substance, Lilly shall have the right to
return that non-conforming Bulk Drug Substance to Ophidian. All or any part of
any shipment which does not conform to the Bulk Drug Substance may be held for
Ophidian's
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disposition and at Ophidian's expense. If Ophidian does not agree with Lilly's
determination that the Bulk Drug Substance does not conform to the Bulk Drug
Substance, Ophidian shall as quickly as possible, but in any event within
thirty (30) days, so advise Lilly by telephone with written confirmation.
Lilly and Ophidian shall meet and attempt to agree whether the Bulk Drug
Substance conforms to the Bulk Drug Substance Specifications.
(c) Ophidian shall use its best efforts to replace any non-
conforming Bulk Drug Substance within the shortest possible time. Lilly shall
have no responsibility to Ophidian for the price of non-conforming Bulk Drug
Substance but shall pay Ophidian the price for the replacement Bulk Drug
Substance. As to quantities of Bulk Drug Substance in relation to which Lilly
and Ophidian are unable to agree as to whether they conform to the Bulk Drug
Substance Specifications, the parties may submit appropriate samples of that
Bulk Drug Substance to a mutually acceptable third party testing laboratory
that will perform testing to determine whether the Bulk Drug Substance conforms
to the Bulk Drug Substance Specifications, using the test protocols and
methodology provided in the Manufacturing Requirements Document. If the third
party testing laboratory determines that the Bulk Drug Substance conforms to
the Bulk Drug Substance Specifications, Lilly shall pay Ophidian the price
established under this Agreement for that Bulk Drug Substance. The parties
hereto recognize that it is possible for a shipment of Bulk Drug Substance to
have Latent Defects. As soon as either party becomes aware of a Latent Defect
in any lot of Bulk Drug Substance, it shall immediately notify the other party
and the lot or batch involved shall, at Lilly's election, be deemed rejected as
of the date of such notice. The party shall then investigate to determine
whether latent defects are caused by a party of negligence in production of
Bulk Drug Substance or handling of Bulk Drug Substance after shipment from
Ophidian, or whether there is unforeseen variability in the process requiring
revalidation. The rejected lot will be paid for by the non-compliant party or
shared by both parties if the process requires revalidation.
Section 7. Audits
Lilly and its Affiliates will keep records of the sales of the Drug
Product in sufficient detail to permit the determination of Net Sales. At the
request and expense of Ophidian, Lilly will permit its auditors, Ernst & Young
LLP, or another independent auditor acceptable to Lilly, to examine these
records during ordinary business hours to the extent necessary to verify the
propriety of Net Sales. Such examination will be made no later than two years
after the invoice dates of Bulk Drug Substance shipments to be examined. The
results of any such examination will be made available to both Ophidian and
Lilly provided that the auditor will not disclose to Ophidian the business
details of Lilly's records, but will report only as to the propriety of Net
Sales of the Drug Product, calculation of the price paid to Ophidian, and, if
applicable, the amount by which the auditor's
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calculation varies from Lilly's calculation. Upon Ophidian's request to be
made no later than seven (7) days following issuance of the auditor's report,
Lilly and/or the auditors will make available for Ophidian's inspection Lilly's
calculation, auditor's calculation and Net Sales of the Drug Product. Ophidian
shall have sixty (60) days following the issuance of the auditor's report to
meet with and ask questions regarding the auditor's report. If the auditor's
calculation varies by more than five percent (5%) from Lilly's calculation and
such variance is to the disadvantage of Ophidian, Lilly will refund Ophidian
the cost of such audit examination.
Section 8. Guarantee and Warranty
8.1. Ophidian guarantees and warrants that Bulk Drug Substance
delivered to Lilly pursuant to this Agreement shall, at the time of delivery,
not be adulterated or misbranded within the meaning of the Federal Food, Drug
and Cosmetic Act, as amended, or within the meaning of any applicable foreign,
state or municipal law, as such Act and such laws are constituted and effective
at the time of delivery and will not be an article which may not, under the
provisions of Sections 404 and 505 of such Act, be introduced into interstate
commerce.
8.2. Ophidian warrants that Bulk Drug Substance delivered to Lilly
pursuant to this Agreement shall conform with the Bulk Drug Substance
Specifications and shall be in compliance with applicable law and all
applicable regulatory requirements. OPHIDIAN MAKES NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO BULK DRUG SUBSTANCE. ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY
OPHIDIAN. IN NO EVENT SHALL OPHIDIAN BE LIABLE FOR INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS.
8.3 Ophidian warrants that it shall conform to the provisions of the
EEO clause in Section 2.02 of Executive Order 11246 as amended, 41 C.F.R. 60-
250 and 41 C.F.R. 60-741, as amended, which are incorporated herein by
reference.
Section 9. Recalls
9.1. In the event of a recall ordered by a government agency or a
confirmed failure of the CDAD Product ("Recall"), Lilly shall be responsible
for the coordination of Recall activities.
9.2. Where the Recall is caused by Ophidian's negligence or willful
misconduct or its material breach of this Agreement, Ophidian agrees to pay all
costs and expenses of any Recall, including costs of retrieving Bulk Drug
Substance
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or the Drug Product already delivered to Lilly's customers. Ophidian further
agrees to reimburse Lilly for costs and expenses Lilly is required to pay for
notification, shipping and handling charges. Prior to any such reimbursement,
Lilly shall provide Ophidian with supporting documentation of all reimbursable
costs and expenses. If the Recall is caused by reasons other than Ophidian's
negligence, willful misconduct or material breach, Lilly shall pay all of the
costs and expenses described above for such Recall.
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EXHIBIT C
OPHIDIAN PHARMACEUTICALS, INC.
STOCK PURCHASE AGREEMENT
WITH
XXX XXXXX AND COMPANY
**** Indicates where confidential material has been omitted and filed
separately with the Commission
JUNE 3, 1996
54
TABLE OF CONTENTS
STOCK PURCHASE AGREEMENT
**** Indicates where confidential material has been omitted and filed
separately with the Commission
ARTICLE I PURCHASE AND SALE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II REPRESENTATIONS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Organization, Good Standing and Qualification . . . . . . . . . . . . . . . . 1
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Valid Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 Patents and Other Proprietary Rights . . . . . . . . . . . . . . . . . . . . . 3
2.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 No Conflict With Other Instruments . . . . . . . . . . . . . . . . . . . . . . 3
2.11 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 No Material Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.14 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.15 Voting Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.16 Private Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.17 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.18 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.20 Inventions and Secrecy Agreements . . . . . . . . . . . . . . . . . . . . . . 6
2.21 Company Contracts and Documents . . . . . . . . . . . . . . . . . . . . . . . 6
2.22 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.23 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.24 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.25 Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.26 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.27 FDA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.28 Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.29 Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.30 Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.31 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.32 Development Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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ARTICLE III REPRESENTATIONS OF THE INVESTOR . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV SECURITIES LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Securities Laws Representations and Covenants
of the Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V DISCLOSURE OF THE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT
THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.4 Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.5 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII CONDITIONS OF THE COMPANY'S OBLIGATIONS AT
THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Blue Sky Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII POST-CLOSING COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 14
8.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Open Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.4 Private Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.5 Invention and Secrecy Agreements . . . . . . . . . . . . . . . . . . . . . . . 14
8.6 Payment of Documentary, Stamp and Similar Taxes . . . . . . . . . . . . . . . 14
8.7 Reports Under Securities Exchange Act of 1934 . . . . . . . . . . . . . . . . 15
8.8 Termination of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX SUBSEQUENT OFFERINGS AND REGISTRATIONS . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Participation in Subsequent Offerings . . . . . . . . . . . . . . . . . . . . 16
9.2 Subsequent Offerings Having Dilutive Effect . . . . . . . . . . . . . . . . . 16
9.3 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Company Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.7 Survival of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.8 Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.10 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into and
effective as of the 3rd day of June, 1996, by and between OPHIDIAN
PHARMACEUTICALS, INC., a Wisconsin corporation, (the "Company"), and XXX LILLY
AND COMPANY, an Indiana corporation (the "Investor").
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE. Subject to the terms and conditions hereof, the
Investor agrees to purchase from the Company, and the Company agrees to issue
and sell to the Investor, 153,846 shares of the Company's common stock, $.0025
par value (the "Shares"), at a price of $6.50 per share for a total purchase
price of one million dollars ($999,999) (the "Purchase Price").
1.2 THE CLOSING. The closing ("Closing") of the purchase and sale of the
Shares is to be held at the offices of Xxx Xxxxx and Company located at Lilly
Corporate Center, Indianapolis, IN, on July 1, 1996, at 9:00 a.m., or at such
other time and place as the Company and Investor shall mutually agree. At the
Closing, the Company shall deliver the Shares to the Investor upon delivery to
the Company by the Investor of a check drawn on a U.S. bank or wire transfer of
funds in the amount of the Purchase Price. The Shares to be delivered to the
Investor will be evidenced by a single certificate registered in the Investor's
name.
ARTICLE II
REPRESENTATIONS OF THE COMPANY
The Company represents and warrants to the Investor as follows:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company: (a ) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Wisconsin; (b) has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as it is presently being conducted and as proposed to be conducted;
and (c) is qualified and is in good standing as a foreign corporation in all
other jurisdictions in which the failure so to qualify would have a material
adverse effect on its business or properties.
2.2 CAPITALIZATION. Immediately prior to the Closing, the authorized
capital of the Company will consist of:
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(a) COMMON STOCK, 22,400,000 shares of common stock, $0.0025 par
value, of which 6,092,192 shares are duly and validly issued
(including, without limitation, issued in compliance with
applicable federal and state securities laws), fully-paid,
non-assessable, and outstanding. A true and correct list of
all five percent (5%) shareholders has been furnished to the
Investor.
(b) PREFERRED STOCK. 0 shares of preferred stock.
(c) OTHER SECURITIES. Except with respect to (i) the Company's
stock option plan as described below, (ii) preemptive rights
granted to shareholders in Article XIII of the Company's
Bylaws, (iii) a Stock Warrant dated January 17, 1990, and
amended on February 8, 1991, issued to Fitchburg Research Park
Associates enabling it, under certain circumstances, to
purchase 114,290 shares of Company common stock at a purchase
price of $0.0025 per share, and (iv) a certain Consulting
Agreement dated May 19, 1994, enabling the consultant to
purchase 200,000 shares of Company common stock at a purchase
price of $4.50 per share, there are no outstanding options,
warrants, rights (including conversion or preemptive rights)
or agreements for the purchase or acquisition from or by the
Company of any shares of its capital stock. Options to
purchase 430,346 shares of the Company's common stock have
been issued pursuant to the Company's stock option plan for
employees, officers and directors and are currently
outstanding. 657,160 shares of the Company's common stock are
currently reserved for issuance pursuant to such plan.
2.3 SUBSIDIARIES. The Company has no subsidiaries and does not control,
directly or indirectly any other corporation, association, or business
organization.
2.4 AUTHORIZATION. All corporate action on the part of the Company and
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
the Company hereunder and the authorization, issuance and delivery of the
Shares has been taken or will be taken on or prior to the Closing, and this
Agreement constitutes a valid and legally binding obligation of the Company.
2.5 VALID ISSUANCE OF SHARES. When issued in accordance with the terms of
this Agreement, the Shares shall be duly and validly authorized and issued
(including, without limitation, issued in compliance with applicable federal
and state securities laws), fully paid and non-assessable and not subject to
any preemptive rights, liens, claims or encumbrances, or other restriction on
transfer, except as set forth in this Agreement and Article XII of the
Company's Bylaws
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pertaining to the Company's right of first refusal with respect to transfers of
Company common stock.
2.6 GOVERNMENTAL CONSENTS. All consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations, or
filings of or with any federal, state or local governmental authority on the
part of the Company required in connection with the consummation of the
transactions contemplated herein have been or shall be obtained prior to the
Closing and shall be effective as of the Closing.
2.7 TITLE TO PROPERTY. The Company owns its property and assets free and
clear of all mortgages, liens, loans and encumbrances, except those that arise
in the ordinary course of business and do not materially impair the Company's
ownership or use of such property or assets. With respect to the property and
assets the Company leases, the Company is in compliance with such leases and,
to the best of its knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances which would be materially adverse to the Company.
2.8 PATENTS AND OTHER PROPRIETARY RIGHTS. The Company has sufficient
title and ownership of all Proprietary Rights (as defined below) necessary for
its business as now conducted without any conflict with or infringement of the
rights of others. There are no outstanding options, licenses or agreements of
any kind relating to the Company's Proprietary Rights, nor is the Company bound
by or a party to any options, licenses or agreements of any kind with respect
to the Proprietary Rights of any other person or entity, that prevent the
Company from carrying out its business as it is now conducted. The Company has
not received any communications alleging that the Company has violated or, by
conducting its business as proposed, would violate the Proprietary Rights of
others. Proprietary Rights shall mean patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information, proprietary
rights and processes.
2.9 LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge and belief,
any basis therefor or threat thereof, against or affecting the Company which
question the validity of this Agreement or the right of the Company to enter
into it, or to consummate the transactions contemplated hereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the business, prospects, conditions, affairs or operations of the Company or
in any of the properties or assets, or in any material impairment of the right
or ability of the Company to carry on its business as now conducted or as
proposed to be conducted. The foregoing includes, without limitation, actions
pending or threatened (or any basis therefor known to the Company) involving
the prior employment of any of the Company's employees, use in connection with
the Company's business of any information or techniques allegedly proprietary
to any former employers of the Company's employees, or obligations of the
Company's employees under any agreements with
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their prior employers. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or governmental
agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.
2.10 NO CONFLICT WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any provisions of its Articles of Incorporation or Bylaws or of
any instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound or, to its knowledge, of any provision of federal
or state statute, rule or regulation applicable to the Company, which violation
or default would be materially adverse to the Company. The execution, delivery
and performance of this Agreement will not result in any violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (a) any provision of the Company's Articles of
Incorporation or Bylaws subject, however, to compliance with certain preemptive
rights that are provided to the Company's shareholders as set forth in the
Company Bylaws; (b) any provision of any judgment, decree or order to which the
Company is a party or by which it is bound; (c) any material contract,
obligation or commitment to which the Company is a party or by which it is
bound; or (d) to the Company's knowledge, any statute, rule or governmental
regulation applicable to the Company.
2.11 FINANCIAL STATEMENTS. Attached as Exhibit A are the audited financial
statements (balance sheet, statement of operations and statement of cash flows)
of the Company as of and for the three (3) years ending September 30, 1993,
1994 and 1995, together with the accompanying notes and report of the Company's
independent auditors together with the unaudited financial statements for the
interim period ended March 31, 1996 (such audited and unaudited financial
statements are collectively referred to as the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and are
consistent with each other.
2.12 NO MATERIAL LIABILITY. There are no outstanding material liabilities
except for those that are set forth in the Financial Statements.
2.13 NO ADVERSE CHANGE. Since the date of the latest audited Financial
Statements, there has not been:
(a) any change in the assets, properties, liabilities, financial
condition, operating results, prospects or business of the
Company (as such business is presently conducted and as it is
proposed to be conducted) from that reflected in the Financial
Statements, except changes in the ordinary course of business
which have not been, in the aggregate, materially adverse;
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(b) any waiver by the Company of a valuable right or of a material
debt owed to it;
(c) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company,
except in the ordinary course of business and which is not
material to the assets, properties, financial condition,
operating results, prospects or business of the Company (as
such business is presently conducted and as it is proposed to
be conducted);
(d) any change or amendment to a material contract or arrangement
by which the Company or any of its assets or properties is
bound or subject;
(e) to the Company's knowledge, any other event or condition of
any character which might materially and adversely affect the
assets, properties, financial condition, prospects or business
of the Company (as such business is presently conducted and as
it is proposed to be conducted).
2.14 CORPORATE DOCUMENTS. Except for amendments necessary to satisfy
representations and warranties or conditions contained herein (the form of
which has been approved by the Investor), the Articles of Incorporation and
By-laws of the Company are in the form previously provided to the Investor.
The minute books of the Company made available to the Investor contain a
complete summary of all meetings of the board of directors (including
committees thereof) and shareholders since the time of incorporation and
reflect all transactions referred to in such minutes accurately in all material
respects.
2.15 VOTING ARRANGEMENTS. Except for the voting agreement dated February
8, 1991, by and between Xxxxxxxx X. van Boldrik and Xxxx X. Xxxxxxx, husband
and wife, and Fitchburg Research Park Associates, a Wisconsin partnership, to
the Company's knowledge, there are no outstanding stockholder agreements,
voting trusts, proxies or other arrangements or understandings among the
stockholders of the Company relating to the voting of their respective shares.
2.16 PRIVATE OFFERING. Neither the Company nor anyone acting on its behalf
has offered any securities of the Company for issuance or sale to, or solicited
any offer to acquire any of the same from, any person or entity so as to make
the issuance and sale of the Shares subject to the registration requirements of
Section 5 of the Securities Act of 1933, as amended ("Securities Act").
2.17 REGISTRATION RIGHTS. Except as provided in this Agreement, or as set
forth in the Disclosure Schedule, the Company is under no contractual
obligation to
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register (now or in the future, whether contingent or not) under the Securities
Act any of its presently outstanding securities or any of its securities that
may subsequently be issued.
2.18 BROKERS AND FINDERS. Except as set forth in the Disclosure Schedule,
the Company has not retained any investment banker, broker or finder, and is
not obligated to any such person for any fee, in connection with the
transactions contemplated by this Agreement.
2.19 FULL DISCLOSURE. The Company believes it has provided the Investor
with all information that the Investor has requested for deciding whether to
purchase the Shares and all information reasonably necessary to enable the
Investor to make such decision. Neither this Agreement nor any other
statements or certificates made or delivered in connection herewith contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements not misleading.
2.20 INVENTIONS AND SECRECY AGREEMENTS. Each employee, consultant and
subcontractor of the Company with access to the Company's proprietary
information has executed an agreement regarding inventions and confidential
information in substantially the form previously provided to the Investor. The
Company, after reasonable investigation, is not aware that any such employee,
consultant, or contractor is in violation thereof.
2.21 COMPANY CONTRACTS AND DOCUMENTS.
(a) Except for (i) transactions relating to purchases of shares of
the Company's securities and (ii) regular salary payments and
fringe benefits paid in the ordinary course of the Company's
business, none of the officers, employees, directors or other
affiliates of the Company is a party to any transaction,
agreement or understanding with the Company, and there have
been no assumptions or guarantees by the Company of any
obligations of such persons;
(b) Except for items that the Company is prohibited from
disclosing under the terms of a confidentiality agreement with
a third party, there are no agreements, undertakings,
instruments, contracts or proposed transactions to which the
Company is a party or by which it is bound which involve (i)
the license of any Proprietary Rights of the Company, or (ii)
the prohibition or limitation of the Company's ability to
engage in its business or any other business or to compete
with any person;
(c) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any
restriction under its Articles of Incorporation or By-laws,
which adversely affect, in any
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material respect, its business as now conducted or as proposed
to be conducted, or its assets, properties, financial
condition or prospects; and
(d) The Company has not engaged in the past 12 months in any
discussions (i) with any representative of any corporation or
corporations regarding the consolidation or merger of the
Company with or into any such corporation or corporations;
(ii) with any corporation, partnership, association or other
business entity or any individual regarding the sale,
conveyance or disposition of all or substantially all of the
assets of the Company or a transaction or series of
transactions in which more than 50% of the voting power of the
Company is disposed of, or (iii) regarding any other forms of
business combination, liquidation, dissolution or winding up
of the Company.
2.22 DISTRIBUTION. There has been no declaration or payment by the Company
of any dividend, nor any distribution by the Company of any assets of any kind,
to any of its shareholders with respect to any of the Company's securities,
except as set forth in the Financial Statements.
2.23 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects and accurately reflect all tax liabilities of
the Company with respect to all tax periods ending on or prior to the date
hereof. The Company has received no notice that the Company's federal income
tax returns or any state income or franchise or other tax returns have been or
are being audited by any governmental authority. The Company has paid all
taxes and other assessments due on or before the date hereof and such payments
were made prior to the time penalties would accrue thereon. The provision for
taxes of the Company is adequate for taxes due or accrued as of the date
hereof. All taxes which should be reserved on the books of the Company in
accordance with generally accepted accounting principles, consistently applied,
have been so reserved.
2.24 INSURANCE. The Company has in full force and effect fire and casualty
insurance policies, with extended coverage, reasonably sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its
properties that might be damaged or destroyed. The Company has also obtained
any other insurance coverages with respect to risks associated with its
business in such amounts as are customary in its industry. The Company is not
aware of any pending or threatened claims against or by the Company for
property damages or personal injuries.
2.25 EMPLOYEE RELATIONS. The Company is not bound by or subject to (and
none of its assets or properties is bound by or subject to) any written or
oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the knowledge of the Company,
has sought to represent
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any of the employees, representatives or agents of the Company. There is not a
strike or other labor dispute involving the Company pending, or to the
knowledge of the Company threatened, which could have a material adverse effect
on the assets, properties, financial condition, prospects or business (as now
conducted or as proposed to be conducted) of the Company, nor is the Company
aware of any labor organization activity involving its employees. The Company
is not aware that any officer or key employee intends to terminate his or her
employment with the Company, nor does the Company intend to terminate the
employment of any such person. The Company believes its relations with its
employees are satisfactory.
2.26 INVESTMENT COMPANY ACT. The Company is not an "investment company" or
a company controlled by an "investment company" as such terms are defined in
the Investment Company Act of 1980, as amended.
2.27 FDA MATTERS. There are no applications or other proceedings presently
pending before the United States Food and Drug Administration ("FDA"). The FDA
has not delivered a letter of nonapproval, or threatened to deliver such a
letter, with respect to any product manufactured, marketed, licensed or
developed by the Company, or any product which the Company intends to
manufacture, market, license or develop.
2.28 BUSINESS PLAN. The Company's business plan entitled Business Summary
and Financial Model (1996-2004), as furnished to the Investor, has been
prepared in good faith by the Company, does not contain any untrue statement of
material fact and does not omit to state a material fact necessary to make the
statements made therein not misleading.
2.29 CONDITION OF ASSETS. All property of the Company, whether real or
personal, is in good condition, reasonable wear and tear excepted, and is
sufficient for its current use in the business of the Company.
2.30 CONFLICT OF INTEREST. The Company and its executive officers have no
interest (other than as holders of securities of a publicly-traded company),
either directly or indirectly, in any entity, including, without limitation
thereto, any corporation, partnership, joint venture, proprietorship, firm,
person, licensee, business or association (whether as an employee, officer,
director, shareholder, agent, independent contractor, security holder,
creditor, consultant or otherwise) that presently (i) provides any services, or
designs, produces and/or sells any products, or engages in any activity which
is the same, similar to or competitive with any activity or business in which
the Company is now engaged or proposes to become engaged; (ii) is a supplier,
customer, or creditor of the Company, or has an existing contractual
relationship with any of the Company's managing employees; or (iii) has any
direct or indirect interest in any asset or property, real or personal,
tangible or intangible, of the Company or any property, real or personal,
tangible or intangible, that is necessary or desirable for the conduct of the
Company's business.
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2.31 COMPLIANCE WITH LAW. The business of the Company is not being
conducted in violation of any material law, ordinance or regulation of any
governmental entity (including, without limitation, those relating to
environmental protection and occupational safety and health practices). All
material governmental approvals, permits and licenses required to conduct the
current business of the Company have been obtained and are in full force and
effect and are being complied with in all material respects.
2.32 DEVELOPMENT AGREEMENT. The representations and warranties made by the
Company in the Agreement dated of even date herewith by and between the Company
and the Investor ("Development Agreement") are true and correct.
ARTICLE III
REPRESENTATIONS OF THE INVESTOR
The Investor represents and warrants to the Company as follows:
3.1 AUTHORIZATION. The Investor has full power and authority to enter
into this Agreement. This Agreement constitutes a valid and legally binding
obligation of the Company.
3.2 BROKERS AND FINDERS. The Investor has not retained any investment
banker, broker or finder, and is not obligated to any such person for any fee,
in connection with the transactions contemplated by this Agreement.
ARTICLE IV
SECURITIES LAWS
4.1 Securities Laws Representations and Covenants of the Investor. The
Investor represents, warrants and covenants to the Company as follows:
(a) PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares are being
acquired for investment for the Investor's own account, not as
a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Investor has no
present intention of selling, granting any participation in,
or otherwise distributing the same. The Investor does not
have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the
Shares.
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The Investor was not organized solely for the purpose of
acquiring the Shares.
(b) DISCLOSURE OF INFORMATION. The Investor believes it has
received all information it considers necessary or appropriate
for deciding whether to purchase the Shares. The Investor has
had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the offering
of the Shares. The foregoing does not, however, limit or
modify the representations and warranties of the Company in
Article II of this Agreement.
(c) INVESTMENT EXPERIENCE. The Investor has previously invested
in companies in the development stage, can bear the economic
risks of the investment and has such knowledge and experience
in financial or business matters that it is capable of
evaluating the merits and risks of its investment in the
Shares.
(d) ACCREDITED INVESTOR. The Investor is an accredited investor
as defined in Rule 501(a) of Regulation D, as amended, of the
Securities and Exchange Commission ("SEC") under the
Securities Act.
(e) RESTRICTED SECURITIES. The Investor understands that the
Shares it is purchasing pursuant to this Agreement are
characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and
that under such laws and applicable regulations the Shares may
be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the
Investor is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby
and by the Securities Act.
(f) DISPOSITION OF SHARES. The Investor will not dispose of any
of the Shares (other than pursuant to SEC Rules 144 or 144A or
any similar or analogous rule or rules) unless and until (i)
the Investor shall have notified the Company of the proposed
disposition and the circumstances surrounding the proposed
disposition and, if reasonably requested by the Company, the
Investor shall have furnished the Company with an opinion of
counsel reasonably satisfactory in form and substance to the
Company to the effect that such disposition will not require
registration under the Securities Act; or (ii) there is in
effect a registration statement under the Securities Act
covering the proposed disposition and the proposed disposition
is made in accordance with such registration statement.
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4.2 LEGENDS. The certificates evidencing the Shares may bear the
restrictive legends set forth below, except that such certificates shall not
bear the legends set forth in (a) and (c) below if the transfer was made in
compliance with Rule 144 or if the opinion of counsel, if any, referred to in
Section 4.1(f)(i) is to the effect that such legend is not required in order to
establish compliance with any provisions of the Securities Act:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"). THE SECURITIES MAY NOT BE TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH
TRANSFER OR SUCH TRANSFER IS MADE PURSUANT TO RULES 144 OR
144A OF THE ACT OR AN EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF THE ACT."
(b) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF FIRST REFUSAL
AND MANDATORY SALE UPON THE HAPPENING OF CERTAIN EVENTS AS SET
FORTH IN ARTICLE XII OF THE BYLAWS OF THE CORPORATION, A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
(c) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
CORPORATION RECEIVES AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT."
(d) Any legend required by the laws of any applicable state or
other jurisdiction governing the Shares.
ARTICLE V
DISCLOSURE OF THE AGREEMENT
Neither party shall disclose any information about this Agreement,
including its existence, without the prior written consent of the other.
Consent shall not be required, however, for disclosures to tax authorities or
to bona fide potential sublicensees, to the extent required or contemplated by
this Agreement, provided,
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that in connection with such disclosure, each party agrees to use its
commercially reasonable efforts to secure confidential treatment of such
information. Each party shall have the further right to disclose the terms of
this Agreement as required by applicable law, including the rules and
regulations promulgated by the Securities and Exchange Commission and to
disclose such information to shareholders or potential investors as is
customary for publicly-held companies, provided the disclosing party provides
to the other party a copy of the information to be disclosed and an opportunity
to comment thereon prior to such disclosure and consults within a reasonable
time in advance of the proposed disclosure with the other on the necessity for
the disclosure and the text of the proposed release.
ARTICLE VI
CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT THE CLOSING
The obligations of the Investor under this Agreement to purchase the Shares
from the Company are subject to the fulfillment on or before the Closing of
each of the following conditions, any of which may be waived in writing by the
Investor:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Article II of this Agreement shall be true on and as
of the Closing with the same effect as though such representation and
warranties had been made on and as of the Closing.
6.2 PERFORMANCE. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
6.3 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Investor a certificate dated as of the Closing, executed by an executive
officer of the Company and in a form reasonably acceptable to the Investor,
certifying that the conditions set forth in Sections 6.1 and 6.2 have been
satisfied and that there has been no material adverse change in the assets,
properties, prospects, condition, affairs, operations or business of the
Company, as now conducted or as proposed to be conducted, since the date of
this Agreement.
6.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings taken
by the Company in connection with the transactions contemplated by this
Agreement and all documents incident thereto shall be reasonably satisfactory
in form and substance to the Investor, and the Investor shall have received all
such documents as it may have reasonably requested.
6.5 OPINION OF COUNSEL. The Investor shall have received an opinion from
the Company's counsel, dated as of the Closing and in a form and substance
reasonably acceptable to the Investor, to the effect that:
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(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin,
and the Company has the requisite corporate power and
authority to own its properties and to conduct its business;
(b) The Company has the requisite corporate power and authority to
execute, deliver and perform this Agreement. This Agreement
has been duly and validly authorized by the Company, duly
executed and delivered by an authorized officer of the Company
and constitutes a legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except as
enforceability may be limited by law affecting the rights of
creditors generally;
(c) The capitalization of the Company is as set forth in this
Agreement;
(d) The certificates representing the Shares are in due and proper
form and have been duly and validly executed by the officers
of the Company named thereon;
(e) The execution, delivery, performance and compliance with the
terms of this Agreement do not violate any provision of the
Company's Articles of Incorporation or By-laws and, to the
best of such counsel's knowledge, do not conflict with or
constitute a default under the provisions of any judgment,
writ, decree, order or agreement to which the Company is a
party or by which it is bound, which conflict or default would
be materially adverse to the Company.
(f) All consents, approvals, orders or authorizations of, and all
qualifications, registrations, designations, declarations, or
filings with, any federal or Wisconsin governmental authority
required to be made prior to the Closing in connection with
the consummation of the transactions contemplated by this
Agreement have been obtained, and are effective, as of the
Closing and such counsel is not aware of any proceedings, or
threat thereof, which question the validity thereof;
(g) Based in part upon the representations of the Investor set
forth in this Agreement, the offer and sale of the Shares
pursuant to the terms of this Agreement are exempt from the
registration requirements of Section 5 of the Securities Act
and from any state qualification requirements of the Company's
state of incorporation and principal place of business;
(h) Such counsel is not aware of any action, proceeding or
investigation pending against the Company or any of its
officers, directors, or
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employees, or that any of the foregoing has received any
threat thereof, which questions the validity of this
Agreement, or the right of the Company or its officers or
directors to enter into this Agreement or which might result,
either individually or in the aggregate, in any material
adverse change in the assets, conditions, affairs, or
prospects of the Company nor is such counsel aware of any
litigation pending against the Company or any of its officers,
directors or employees, or that any of the foregoing has
received any threat thereof, by reason of the proposed
activities of the Company, the past employment relationships
of its officers, directors or employees, or negotiations by
the Company or any of its officers, directors or employees
with possible investors in the Company or its business; and
(i) The Shares have been duly and validly authorized and issued
(including, without limitation, issued in compliance with
applicable federal and state securities laws), fully paid and
non-assessable and not subject to any preemptive rights,
liens, claims or encumbrances, or other restriction on
transfer, except as set forth in this Agreement and Article
XII of the Company's Bylaws pertaining to the Company's right
of first refusal with respect to transfers of Company common
stock.
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSING
The obligations of the Company under this Agreement to issue and sell
the Shares to the Investor are subject to the fulfillment on or before the
Closing of each of the following conditions, any of which may be waived in
writing by the Company:
7.1 REPRESENTATIONS AND WARRANTIES. The representation and warranties of
the Investor contained in Article III and Section 4.1 of this Agreement shall
be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.
7.2 PAYMENT OF PURCHASE PRICE. The Investor shall at the Closing pay the
Purchase Price upon delivery by the Company of a certificate representing the
Shares.
7.3 BLUE SKY COMPLIANCE. The Company shall have complied with all
applicable state securities laws as necessary to offer and sell the Shares to
the Investor.
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ARTICLE VIII
POST-CLOSING COVENANTS OF THE COMPANY
8.1 FINANCIAL STATEMENTS. The Company shall deliver to the Investor all
financial and other reports required under federal, state or local law and such
other reports as the parties may agree upon. In addition, the Company shall
deliver to the Investor: (i) as soon as practicable, but in any event within
120 days after the end of each fiscal year of the Company, an income statement
for such fiscal year, a balance sheet as of the end of such year and a schedule
as to the sources and applications of funds for such year, such year end
financial reports to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, consistently applied, and audited and
certified by independent public accountants reasonably acceptable to the
Investor; and (ii) within 30 days of the end of each quarter, an unaudited
income statement, balance sheet and cash flow analysis for and as of the end of
such quarter, including the foregoing information on a comparative and year to
date basis.
8.2 OPEN COMMUNICATION. The Company shall permit the Investor at
reasonable times to discuss the Company's affairs, finances and accounts with
the Company's officers.
8.3 INSURANCE. The Company shall maintain insurance coverage covering
risks associated with its business in such amounts as are customary in the
industry.
8.4 PRIVATE OFFERING. Neither the Company nor anyone acting on its behalf
will offer any securities of the Company for issuance or sale to, or solicit
any offer to acquire any of the same from, any person or entity so as to make
the issuance and sale of the Shares subject to the registration requirements of
Section 5 of the Securities Act.
8.5 INVENTION AND SECRECY AGREEMENTS. Each employee and consultant of the
Company who may have access to the Company's and Investor's proprietary
information shall execute an appropriate confidentiality agreement.
8.6 PAYMENT OF DOCUMENTARY, STAMP AND SIMILAR TAXES. The Company shall
pay any and all documentary, stamp, transfer or other taxes which may become
due or payable with respect to or as a result of the issuance and delivery of
the Shares.
8.7 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Investor the benefits of SEC Rule 144 and any other rule or
regulation of the SEC that may at any time permit the Investor to sell
securities of the Company to the public without registration or pursuant to a
registration on SEC Form S-3, the Company agrees to:
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(a) make and keep public information available, as those terms are
defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement
filed by the Company for the offering of its securities to the
general public;
(b) take such action, which may, but shall not be required to,
include the voluntary registration of its securities under
Section 12 of the Securities Exchange Act of 1934, as amended
("1934 Act"), as is necessary to enable the Investor to
utilize SEC Form S-3 for the sale of the Shares, such action
to be taken, as required under the 1934 Act, after the end of
the fiscal year in which the first registration statement
filed by the Company for the offering of its securities to the
general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and
the 1934 Act; and
(d) furnish to the Investor, so long as the Investor owns Shares,
upon request (i) a written statement by the Company that it
has complied with the reporting requirements of SEC Rule 144
(at any time after ninety (90) days after the effective date
of the first registration statement filed by the Company), the
Securities Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold
pursuant to SEC Form S-3 (at any time after it so qualifies),
(ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be
reasonably requested in availing the Investor of any rule or
regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such plan.
8.8 TERMINATION OF COVENANTS. The covenants contained in Sections 8.1,
8.2, and 8.6 shall terminate upon an underwritten public offering by the
Company of its securities.
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ARTICLE IX
SUBSEQUENT OFFERINGS AND REGISTRATIONS
9.1 PARTICIPATION IN SUBSEQUENT OFFERINGS. If at any time the Company
shall issue, for cash, shares of its common stock or any other security which
can be converted into shares of the Company's common stock (a "Subsequent
Offering"), other than shares to be issued to employees or directors or
consultants of the Company pursuant to the Company's stock option plan, and
other than pursuant to an agreement that also provides for the transfer of
technology or other similar strategic alliance, the Company shall offer upon
the same price and terms to the Investor such number of additional shares of
such common stock or other security as would result in the Investor maintaining
the same overall percentage ownership of such common stock of the Company
(taking into consideration the conversion rights of all securities) following
such new issuance as existed immediately prior thereto. Upon receipt of written
notice of such offer, the Investor shall have a period of forty-five (45)
calendar days within which to accept or reject the offer of sale of such
securities. Closing for the purchase of such securities shall occur
immediately following the closing of the Subsequent Offering. The requirements
of this Section shall terminate upon the first sale of the Company's common
stock to the public pursuant to a registration statement filed with, and
declared effective by, the SEC under the Securities Act covering the offer and
sale of the Company's common stock with an aggregate offering price to the
public of not less than ten million dollars ($10,000,000).
9.2 SUBSEQUENT OFFERINGS HAVING DILUTIVE EFFECT. If the Company shall
issue shares of its common stock or any other security which can be converted
into shares of the Company's common stock ("Additional Issuance"), other than
shares to be issued to employees or directors of the Company pursuant to the
Company's stock option plan, for a per share consideration less than the per
share consideration paid by the Investor pursuant to this Agreement (taking
into consideration conversion rights and subdivisions of the securities by
stock dividends, splits or otherwise), the Company shall issue to the Investor
such additional number of shares of the Company's common stock as necessary so
that the number of shares purchased under this Agreement plus any such
additional shares issued pursuant to this Section 9.2 shall equal the number of
shares which the Investor would have been able to purchase for the Purchase
Price had the per share consideration paid by the Investor pursuant to this
Agreement been equal to the per share consideration paid for the Additional
Issuance. For purposes of this Section 9.2, the per share consideration shall
not be considered to be less than the per share consideration paid by the
Investor under circumstances where the Investor's independent certified public
accountant renders an opinion to the effect that the Additional Issuance will
not result in a permanent impairment in the value of the Investor's shares of
Company common stock in accordance with Generally Accepted Accounting
Principles. Additional shares under this Section 9.2 shall be issued to the
Investor contemporaneously with the closing of the Additional Issuance. The
requirements of this Section 9.2 shall terminate upon completion of the first
public offering of the Company's common stock pursuant to a registration
statement filed with, and declared effective by, the SEC under the Securities
Act
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with an aggregate price to the public of not less than ten million dollars
($10,000,000) (it being understood that this Section 9.2 shall apply to the
sale of shares of the Company's common stock in such public offering).
For the purposes of determining the per share consideration paid for the
Additional Issuance, the following provisions shall be applicable.
(a) In the case of issuance of common stock for cash, the
consideration shall be deemed to be the amount of cash paid
therefore without deducting any discounts or commissions paid
or incurred by the Company in connection with the issuance and
sale thereof.
(b) In the case of the issuance of common stock for consideration
in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as may
be mutually agreed upon by the Company and the Investor. If
the Company and the Investor are unable to agree on such fair
value, the fair value shall be determined by a nationally
recognized investment banking firm or nationally recognized
firm of independent certified public accountants selected by
the parties, whose fees shall be borne equally by the parties;
provided, however, that if, at the time of such determination,
the Company's common stock is traded in the over-the-counter
market or on a national or regional securities exchange, such
fair market value as determined shall not exceed the aggregate
"current market price" (as defined below) of shares of common
stock being issued.
(c) In the case of issuance of (i) options to purchase or rights
to subscribe for common stock, (ii) securities by their terms
convertible into or exchangeable for common stock, or (iii)
options to purchase or rights to subscribe for securities by
their terms convertible into or exchangeable for common stock:
(1) The aggregate maximum number of shares of common
stock deliverable upon exercise of such options to
purchase or rights to subscribe for common stock
shall be deemed to have been issued at the time such
options or rights were issued and for a consideration
equal to the consideration (determined in the manner
provided in subdivisions (a) and (b) above), if any,
received by the Company upon the issuance of such
options or rights plus the minimum purchase price
provided in such options or rights for the common
stock covered thereby;
(2) The aggregate maximum number of shares of common
stock deliverable upon conversion of or in exchange
for any such convertible or exchangeable securities,
or upon the exercise of
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options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent
conversion or exchange thereof, shall be deemed to
have been issued at the time such securities were
issued or such options or rights were issued and for
a consideration equal to the consideration received
by the Company for any such securities and related
options or rights (excluding any cash received on
account of accrued interest or accrued dividends),
plus the additional consideration, if any, to be
received by the Company upon the conversion or
exchange of such securities or the exercise of any
related options or rights (the consideration in each
case to be determined in the manner provided in
subdivisions (a) and (b) above;
(d) For purpose of any computation pursuant to this section 9.2,
the "Current Market Price" at any date of one share of common
stock shall be deemed to be the average of the highest
reported bid and the lowest reported offer prices on the
preceding business day as furnished by the National Quotation
Bureau, Incorporated (or equivalent recognized source of
quotations).
9.3 REGISTRATION RIGHTS.
(a) DEFINITIONS. As used in this Section 9.3, the following terms
shall have the following respective meanings:
o "COMMISSION" shall mean the Securities and Exchange
Commission or any other federal agency at the time
administering the Securities Act.
o "TRANSFER" shall mean any disposition of the Shares
which would constitute a sale thereof within the meaning
of the Securities Act.
o "RESTRICTED SECURITIES" shall mean (i) the Shares; (ii)
any common stock issued to the Investor as a result of
any Subsequent Offering under Section 9.1 or otherwise;
(iii) any common stock issued to the Investor as a
result of any Additional Issuance under Section 9.2 or
otherwise; and (iv) any common stock or other security
issued as a dividend or other distribution with respect
to the foregoing.
(b) REQUEST FOR REGISTRATION. In the event the Company shall
receive from Investor a written request that the Company
effect any registration, qualification or compliance with
respect to shares of Restricted Securities with an expected
aggregate offering price to the public of at least five
million dollars ($5,000,000), the Company will: within ten
(10) days of the receipt by the Company of such notice, give
written notice of the proposed registration, qualification or
compliance to all other holders of Restricted Securities; and
as soon as practicable,
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use its best efforts to effect such registration,
qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and
distribution of all the Restricted Securities as are specified
in such requests; together with all or such portion of the
Restricted Securities of any holder or holders of Restricted
Securities, joining in such request as are specified in a
written request received by the Company within twenty (20)
days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to
take any action to effect any such registration, qualification
or compliance pursuant to this Section 9.3(b):
(l) In any particular jurisdiction in which the Company
would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance unless the Company is
already subject to service in such jurisdiction and
except as may be required by the Securities Act;
(2) prior to December 31, 1998;
(3) during the period starting with the date sixty (60)
days prior to the Company's estimated date of filing
of, and ending on the date three (3) months
immediately following the effective date of, any
registration statement pertaining to securities of
the Company (other than registration of securities in
a Rule 145 transaction, with respect to an employee
benefit plan or with respect to the Company's first
registered public offering of its stock in which case
the period shall end on the date six (6) months
following the effective date), provided that the
Company is actively employing in good faith
reasonable efforts to cause such registration
statement to become effective;
(4) after the Company has effected three (3) such
registrations pursuant to this section 9.3(b), and
such registrations have been declared or ordered
effective; provided, however, that in the event that
any legal restrictions or prohibitions shall result
in the inability of the holders of Restricted
Securities participating in a registration pursuant
to this Section 9.3(b) to sell at least seventy-five
percent (75%) of the Restricted Securities included
in any such registration within one hundred eighty
(180) days of the effectiveness thereof, then the
Investor shall be entitled to
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demand an additional registration pursuant to this
Section 9.3(b);
(5) If the Company shall furnish to the Investor a
certificate signed by the President of the Company
stating that in the good faith judgment of the Board
of Directors it will be seriously detrimental to the
Company or its shareholders for a registration
statement to be filed in the near future, then the
Company's obligation to use its best efforts to
register, qualify or comply under this Section 9.3
shall be deferred for a period not to exceed one
hundred twenty (120) days from the date of receipt of
written request from the Investor; provided, however,
that the Company shall not exercise such rights more
than once in any twelve (12) months.
(6) Subject to the foregoing clauses (1)-(5), the Company
shall file registration statement covering the
Restricted Securities so requested to be registered
as soon as practicable, after receipt of the request
or requests of the Investor.
(c) REQUEST FOR REGISTRATION ON FORM S-3. If the Investor
requests that the Company file a registration statement on
Form S-3 (or any successor form to Form S-3) or any similar
short-form registration statement, for a public offering of
Restricted Securities, the reasonably anticipated aggregate
price to the public of which, net of underwriting discounts
and commissions, would exceed one million dollars ($1,000,000)
and the Company is a registrant entitled to use Form S-3 to
register the Restricted Securities for such an offering, the
Company shall use its best efforts to cause such Restricted
Securities to be registered on such form for the offering and
to cause such Restricted Securities to be qualified as the
Investor may reasonably request; provided, however, that the
Company shall not be required to effect more than four (4)
registrations pursuant to this Section 9.3(c) or more than one
(1) such registration in any twelve (12) month period. After
the Company's first public offering of its securities, the
Company will use its best efforts to qualify for Form S-3
registration or a similar short-form registration.
Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 9.3(c):
(1) In any particular jurisdiction in which the Company
would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance unless
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the Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act;
(2) If the Company within ten (10) days of the receipt of
the request described herein, gives notice of its
bonafide intention to effect the filing of a
registration statement with the Commission within
ninety (90) days of receipt of such request (other
than with respect to a registration statement
relating to a Rule 145 transaction, or an offering
solely to employees);
(3) During the period starting with the date ninety (90)
days prior to the Company's estimated date of filing,
and ending on the date three (3) months immediately
following, the effective date of any registration
statement pertaining to securities of the Company
(other than a registration of securities in a Rule
145 transaction or with respect to an employee
benefit plan) provided that the Company is actively
employing in good faith all reasonable efforts to
cause such registration statement to become
effective; or
(4) If the Company shall furnish to the Investor, a
certificate signed by President of the Company
stating that in good faith judgment of the Board of
Directors it would be seriously detrimental to the
Company or its shareholders for registrations
statements to be filed in the near future, then the
Company's obligation to use its best effort to file a
registration statement shall be deferred for a period
not to exceed ninety (90) days from the receipt of
request to file such registration by the Investor;
provided, however, that the Company shall not
exercise such right more than once in any twelve (12)
month period.
(d) "PIGGYBACK" REGISTRATIONS. If and whenever the Company
proposes to register any of its equity securities under the
Securities Act for an offering to the general public for cash,
whether on its own behalf or on behalf of controlling
shareholders of the Company participating in a secondary
distribution, it will give written notice to all holders of
Restricted Securities of its intention to do so and, upon the
written request of the holders of any Restricted Securities
given within forty-five (45) business days after the Company's
giving of such notice (which request shall state the intended
method of disposition of such Restricted Securities by the
prospective sellers), the Company will use its best efforts to
cause the Restricted Securities as to which registration shall
have been so requested to be included in the shares of
securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent
requisite to permit the sale or
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other disposition (in accordance with the written request of
the holders) by the prospective seller or sellers of such
Restricted Securities.
(e) UNDERWRITING. In the event that any registration pursuant to
this Section 9.3 shall be, in whole or in part, a firm
commitment underwritten offering of securities of the Company,
any request by such holders pursuant to this Section 9.3 to
register Restricted Securities must specify that such shares
are to be included in the underwriting (i) on the same terms
and conditions as the shares of securities, if any, otherwise
being sold through underwriters under such registration; (ii)
in the event that no shares of securities, other than
Restricted Securities, are being sold through underwriters
under such registration, then on terms and conditions
comparable to those normally applicable to offerings of common
stock in reasonably similar circumstances. Notwithstanding
any other provision of this Section 9.3, if the underwriter
determines that marketing factors require a limitation of the
number of shares to be underwritten, the underwriter may
exclude a pro rata portion of the Restricted Securities of the
requesting holders based on the proportion of such Restricted
Securities to the total securities to be included in the
registration (excluding securities to be issued directly by
the Company if the Company initiated the registration).
(f) REGISTRATION PROCEDURES AND EXPENSES. If and whenever the
Company is required by the provisions of this Section to
include any of the Restricted Securities of the Investor in a
registration under the Securities Act, the Investor will
furnish in writing such information as is reasonably requested
by the Company for inclusion in the registration statement
relating to such offering and such other information and
documentation as the Company shall reasonably request, and the
Company will, as expeditiously as possible:
(1) Prepare and file with the Commission a registration
statement with respect to such securities and use its
best efforts to cause such registration to become and
remain effective for such period as may be necessary
to permit the successful marketing of such securities
but not exceeding 120 days.
(2) Prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to comply with the provisions of the
Securities Act and to keep such registration
statement effective for that period of time specified
in paragraph 9.3(f)(1).
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(3) Furnish to each selling shareholder such number of
prospectuses and preliminary prospectuses in
conformity with the requirements of the Securities
Act, and such other documents as such seller may
reasonably request in order to facilitate the public
sale or other disposition of the Restricted
Securities owned by such seller.
(4) If the Company is required by the underwriters, if
any, of the securities registered under this Section
9.3 to deliver an opinion of counsel to such
underwriters in connection with such registration,
and if requested by any holders of Restricted
Securities participating in such registration, use
its best efforts to furnish such opinion to such
holders on the day of delivery to the underwriters,
addressed to such underwriters and to such holders
containing substantially the following provisions:
(a) that the registration statement covering
such registration of securities has become
effective under the Securities Act;
(b) that, to the best of such counsel's
knowledge, no stop order suspending the
effectiveness thereof has been issued and
no proceedings for that purpose have been
instituted or are pending or threatened
under the Securities Act;
(c) that at the time the registration statement
became effective, the registration
statement and the related prospectus
complied as to form in all material
respects with the requirements of the
Securities Act and the applicable rules and
regulations of the Commission thereunder
(except that such counsel need express no
opinion as to financial statements and
related schedules contained therein);
(d) that while such counsel has not
independently verified the accuracy or
completeness of the information contained
therein, such counsel has no reason to
believe that the registration statement at
the time it became effective or the
prospectus contained any untrue statement
of a material fact or omitted to state a
material fact required to be stated therein
or necessary to make the statements therein
not misleading;
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(e) that, to the best of such counsel's
knowledge, the descriptions in the
registration statement and the prospectus,
and any amendments or supplements thereto,
of all legal and governmental matters and
all contracts and other legal documents or
instruments described therein are accurate
and fairly present the information required
to be stated therein concerning such
matters, contracts, documents and
instruments;
(f) that such counsel does not know of any
legal or governmental proceedings, pending
or threatened, required to be described in
the registration statement or prospectus,
or any amendment or supplement thereto,
which are not described as required, nor of
any contracts or documents or instruments
of a character required to be described in
the registration statement or prospectus;
or any amendment or supplement thereto, or
to be filed as exhibits to the registration
statement which are not described or filed
as required. Such opinion shall be in such
form as is customary for similar opinions
delivered by such counsel so long as such
form is acceptable to the underwriters.
(5) If the Company is required by the underwriters, if
any, of the securities registered in a registration
under this Section 9.3 to deliver a letter from the
independent certified public accountants of the
Company to such underwriters in connection with such
registration, and if requested by any holders of
Restricted Securities participating in such
registration, use its best efforts to furnish such
letter to such holders on the day of delivery to the
underwriters, addressed to such underwriters and to
such holders, providing substantially that such
accountants are independent certified public
accountants within the meaning of the Securities Act
and that in the opinion of such accountants, the
financial statements and other financial data of the
Company included in the registration statement and
the prospectus, and any amendment or supplement
thereto, comply as to form in all material respects
with the applicable accounting requirements of the
Securities Act. Such letter shall additionally cover
such other financial matters (including information
as to the period ending not more than five business
days prior to the date of such letter) with respect
to the registration in respect of which such letter
is being given as the holders of Restricted
Securities requesting such letter may reasonably
request, and shall be in such form as is customary
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for similar letters delivered by such certified
independent public accountants so long as such form
is acceptable to the underwriters.
(6) Use its best efforts to register or qualify the
Restricted Securities covered by such registration
statement under such other securities or blue sky
laws of such jurisdictions as each such selling
shareholder shall reasonably request and do any and
all other acts and things which may be necessary or
desirable to enable such seller to consummate the
public sale or other disposition in such
jurisdictions of the Restricted Securities owned by
such seller and covered by such registration
statement.
(g) MANAGING UNDERWRITERS. In the event holders of Restricted
Securities propose to sell Restricted Securities in accordance
with this Section 9.3 pursuant to an underwritten offering,
the Company shall have the right to approve the managing
underwriters for such offering; providing, however, that such
approval shall not be unreasonably withheld.
(h) REGISTRATION AND SELLING EXPENSES. As used herein,
"Registration Expenses" shall mean all expenses incurred by
the Company in complying with this Section 9.3, including,
without limitation, all registration and filing fees; printing
expenses; fees and disbursements of counsel for the Company;
blue sky fees and expenses; and the expense of any special
audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company); and "Selling
Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sales. The Company will pay all
Registration Expenses in connection with the registration
pursuant to Section 9.3. All Selling Expenses in connection
with each registration pursuant to this Section 9.3 shall be
borne by the Company and the selling shareholders pro rata in
proportion to the securities covered thereby being sold by
them.
(i) STANDOFF AGREEMENT. Investor agrees in connection with any
registration of the Company's securities that, upon the
request of the Company or the underwriters managing any
underwritten offering of the Company's securities, not to
sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Restricted Securities
(other than those included in the registration) without the
prior written consent of the Company or such underwriters, as
the case may be, for such reasonable period of time from the
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effective date of such registration as the underwriters may
specify, provided that all officers and directors of the
Company and all other holders of the Securities of the Company
enter into similar agreements. Such agreement shall be in
writing and in a form satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions
with respect to the shares subject to the foregoing
restrictions until the end of such period.
(j) INDEMNIFICATION. In the event of a registration of any of the
Restricted Securities under the Securities Act pursuant to
this Section, the Company will indemnify and hold harmless the
seller of such Restricted Securities and each underwriter of
such Restricted Securities and each other person, if any, who
controls such seller or underwriter within the meaning of
Section 15 of the Securities Act, against any and all losses,
claims, damages or liabilities, joint or several, to which
such seller or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained on
the effective date thereof in any registration statement under
which such Restricted Securities are registered under the
Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and the Company will reimburse such seller and
each such underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by them in
connection with their investigating or defending any such
loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such seller or underwriter specifically for use in
the preparation thereof; and provided, further, that if any
losses, claims, damages or liabilities arise out of or are
based upon an untrue statement, alleged untrue statement,
omission or alleged omission contained in any preliminary
prospectus which did not appear in the final prospectus, the
Company shall not have any liability with respect thereto to
(i) the seller or any person who controls such seller within
the meaning of Section 15 of the Securities Act, if the seller
delivered a copy of the preliminary prospectus to the person
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alleging such losses, claims, damages or liabilities and
failed to deliver a copy of the final prospectus, as amended
or supplemented if it has been amended or supplemented, to
such person at or prior to the written confirmation of the
sale to such person or (ii) any underwriter or any person who
controls such underwriter within the meaning of Section 15 of
the Securities Act, if such underwriter delivered a copy of
the preliminary prospectus to the person alleging such losses,
claims, damages or liabilities and failed to deliver a copy of
the final prospectus, as amended or supplemented if it has
been amended or supplemented to such person at or prior to the
written confirmation of the sale to such person.
In the event of any registration of any of the Restricted
Securities under the Securities Act pursuant to this Section,
each seller of such Restricted Securities, severally and not
jointly, will indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company
who signs the registration statement, each director of the
Company, each underwriter and each person who controls any
underwriter within the meaning of Section 15 of the Securities
Act, against any and all such losses, claims, damages or
liabilities referred to in the first paragraph of this
Subsection, if the statement, alleged statement, omission or
alleged omission in respect of which such loss, claim, damage
or liability is asserted was made in reliance upon and in
conformity with information furnished in writing to the
Company by or on behalf of such seller specifically for use in
connection with the preparation of such registration
statement, preliminary prospectus, prospectus, amendment or
supplement; provided, however, that if any losses, claims,
damages or liabilities arise out of or are based upon an
untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus which
did not appear in the final prospectus, such seller shall not
have any such liability with respect thereto to the Company,
any person who controls the Company within the meaning of
Section 15 of the Securities Act, any officer of the Company
who signed the registration statement or any director of the
Company, if the Company delivered a copy of the preliminary
prospectus to the person alleging such losses, claims, damages
or liabilities and failed to deliver a copy of the final
prospectus, as amended or supplemented if it has been amended
or supplemented, to such person at or prior to the written
confirmation of the sale to such person.
(k) TERMINATION OF CONDITIONS AND OBLIGATIONS. Except for the
Company's indemnification obligation contained in Subsection
9.3(j), the obligations and conditions precedent imposed by
this Section shall
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cease and terminate as to any of such Restricted Securities
when (i) such securities shall have been effectively
registered under the Securities Act and sold or otherwise
disposed of in accordance with the intended method of
disposition by the seller or sellers thereof set forth in the
registration statement covering such securities or (ii) such
time as an opinion of counsel with respect to free
transferability shall have been rendered pursuant to
Subsection 4.1(f)(i) above.
(l) AMENDMENTS OF REGISTRATION RIGHTS. Without the written
consent of the holders of 51% of the total number of shares
which would, at the time of such calculation, constitute
Restricted Securities, the Company shall not amend this
Section 9.3, or enter into any agreement with any holder or
prospective holder of any securities of the Company which
would grant to such holder or prospective holder rights
superior to or in conflict with any rights conferred upon the
Investor and other holders of Restricted Securities under this
Section.
9.4 COMPANY ACTION. The Company shall not amend its Articles of
Incorporation or participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action for the purpose of avoiding or seeking to avoid the observance
or performance of any of the provisions of this Article, but will at all times
in good faith assist in carrying out all of its actions as may be reasonably
necessary or appropriate in order to protect the rights of the Investor and
other holders of Restricted Securities.
ARTICLE X
MISCELLANEOUS
10.1 ENTIRE AGREEMENT. This Agreement (together with any attachments or
exhibits) constitutes the entire agreement between the Company and the Investor
relating to the subject matter hereof, and no party shall be liable or bound to
the other in any manner by any warranties, representations or covenants except
as specifically set forth herein.
10.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Except as expressly provided in this Agreement,
nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
10.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin without application of the
choice of laws provisions of such laws.
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10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.5 HEADINGS. The headings used in this Agreement are for convenience and
shall not by themselves be considered in construing or interpreting this
Agreement.
10.6 NOTICES. Any notice required or permitted hereunder shall be given in
writing and shall be conclusively deemed effectively given upon either (a)
personal delivery; (b) one day after facsimile transmission to the facsimile
number indicated below and evidenced by a written record of completed
transmission to such number; or (c) five days after deposit in the United
States mail, by registered or certified mail, postage prepaid, addressed to the
following address, or to such other address as the party may designate by ten
(10) days' advance written notice to the other party:
If to the Investor:
Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Facsimile #: 000-000-0000
If to the Company
Ophidian Pharmaceuticals, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, President
Facsimile #: 000-000-0000
(with a copy to XxXxxxxxxx & Xxxxxxx,
Attn: Xxxxxxx X. Xxxxxxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile #: 608-257-3911)
10.7 SURVIVAL OF WARRANTIES. The warranties, representations and covenants
of the parties contained in or made pursuant to this Agreement shall survive
the execution and deliver of this Agreement and the Closing and shall in no way
be affected by any investigation of the subject matter thereof by or on behalf
of the
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Investor; provided, however, that such representations and warranties need only
be accurate as of the date of such execution and delivery and as of the
Closing.
10.8 FINDER'S FEES. Each party agrees to indemnify and hold harmless the
other party from and against any liability for any commission or compensation
in the nature of investment banking or finder's fees in connection with the
transactions contemplated by this Agreement (and the costs and expenses of
defending against such liability or asserted liability) for which the
indemnifying party or any of its officers, employees or representatives is
responsible.
10.9 EXPENSES. Irrespective of whether the Closing is effected, the
Company and the Investor will each pay their respective legal and other fees
and expenses in connection with the negotiation, execution, delivery and
performance of this Agreement.
10.10 AMENDMENTS AND WAIVERS. Except as expressly provided in this
Agreement, any provision of this Agreement may be amended only by the mutual
written agreement of the parties and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only in a written document executed by
the waiving party.
10.11 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
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IN WITNESS WHEREOF the parties have executed this Agreement effective
as of the day and year first above written.
OPHIDIAN PHARMACEUTICALS, INC. XXX XXXXX AND COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ August X. Xxxxxxxx
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxx August X. Xxxxxxxx
President Executive Vice President
Science and Technology
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**** Indicates where confidential material has been omitted and filed
separately with the Commission
EXHIBIT D
OPHIDIAN PHARMACEUTICALS, INC.
MILESTONE STOCK PURCHASE AGREEMENT
WITH
XXX LILLY AND COMPANY
THIS AGREEMENT ("AGREEMENT") is entered into as of the 15th day of
November, 1996 ("EFFECTIVE DATE"), by and among OPHIDIAN PHARMACEUTICALS, INC.,
a Wisconsin corporation (the "COMPANY"), and XXX XXXXX AND COMPANY, and Indiana
corporation (the "INVESTOR").
RECITALS
A. Company has developed avian antibody-based technology for the
treatment of Clostridium difficile associated diseases ("CDAD").
B. Investor is engaged in the research, development, marketing,
manufacture and distribution of therapeutic pharmaceutical and animal health
products and health care solutions.
C. Company and Investor have entered into a certain collaborative
agreement dated June 3, 1996, (the "DEVELOPMENT AGREEMENT") with respect to the
further research, development, manufacture and sale of products for the
treatment of CDAD.
D. In connection with the Development Agreement, the Investor agreed
to make an initial investment in the Company pursuant to a certain stock
purchase agreement dated June 3, 1996, (the "INITIAL STOCK PURCHASE AGREEMENT")
and to make certain subsequent milestone equity investments in exchange for
Company stock at the occurrence of certain defined events (the "MILESTONE
EVENTS").
E. A Milestone Event has occurred and the parties desire to effect
the milestone equity investment required by the Development Agreement.
90
AGREEMENT
In consideration of the foregoing, and the covenants and promises
contained in this Agreement, Company and Investor agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE
As of the date of this Agreement, except for Sections 1.1, 1.2, 2.2,
2.3, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.17, 2.19, 2.20, 2.21,
2.22, 2.23, 2.24, 2.25, 2.26, 2.27, 2.28, 2.29, 2.30, 2.31, 2.32 and Article VI
of the Initial Stock Purchase Agreement, all the terms, definitions,
provisions, representations, warranties and obligations of the Initial Stock
Purchase Agreement are hereby incorporated by reference, in their entirety, to
apply in full force and effect with respect to the purchase and sale of Shares
as described in Article II of this Agreement as if the same were made as of the
date of this Agreement.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 PURCHASE AND SALE. Subject to the terms and conditions hereof, the
Investor agrees to purchase from the Company, and the Company agrees to issue
and sell to the Investor, 545,454 shares of the Company's common stock, $.0025
par value (the "Shares"), at a price of $5.50 per share for a total purchase
price of $2,999,997.00 (the "Purchase Price").
2.2 THE CLOSING. The closing ("Closing") of the purchase and sale of the
Shares shall be held on November 20, 1996, or at such other time as the
Company and Investor shall mutually agree. At the Closing, the Company shall
deliver the Shares to the Investor upon delivery to the Company by the Investor
of a check drawn on a U.S. bank or wire transfer of funds in the amount of the
Purchase Price. The Shares to be delivered to the Investor will be evidenced by
a single certificate registered in the Purchaser's name.
ARTICLE III
In addition to the representation and warranties made by the Company
under Article I above, the Company also represents and warrants to the Investor
as follows:
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3.1 CAPITALIZATION. Immediately prior to the Closing, the authorized
capital of the Company will consist of:
(a) COMMON STOCK. 22,400,000 shares of common stock, $0.0025 par
value, of which 6,738,312 shares are duly and validly issued
(including, without limitation, issued in compliance with
applicable federal and state securities laws), fully-paid, non-
assessable, outstanding. A true and correct list of all five
percent (5%) shareholders has been furnished to the Investor.
(b) OTHER SECURITIES. Except with respect to (i) the Company's stock
option plan as described below, (ii) a Stock Warrant dated
January 17, 1990, and amended on February 8, 1991, issued to
Fitchburg Research Park Associates enabling it, under certain
circumstances, to purchase 114,290 shares of Company common stock
at a purchase price of $0.0025 per share, and (iii) a certain
Consulting Agreement dated May 19, 1994, enabling the consultant
to purchase 200,000 shares of Company common stock at a purchase
price of $4.50 per share, there are no outstanding options,
warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from or by the Company
of any shares of its capital stock. Options to purchase 461,889
shares of the Company's common stock have been issued pursuant to
the Company's stock option plan for employees, officers and
directors and are currently outstanding. 657,160 shares of the
Company's common stock are currently reserved for issuance
pursuant to such plan.
3.2 FINANCIAL STATEMENTS. The Company has furnished the Investor with the
audited financial statements (balance sheet, statement of operations and
statement of cash flows) of the Company as of and for the year ending September
30, 1995, together with the accompanying notes and report of the Company's
independent auditors together with unaudited financial statements for the
interim period ended September 30, 1996 (such audited and unaudited financial
statements are collectively referred to as the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and are
consistent with each other.
3.3 DEVELOPMENT AGREEMENT. The Company is not in violation or breach of any
provisions, representations, warranties or obligations set forth in the
Development Agreement.
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3.4 NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement will not result in any violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (a) any provision of the Company's Articles of
Incorporation or Bylaws; (b) any provision of any judgment, decree or order to
which the Company is a party or by which it is bound; (c) any material
contract, obligation or commitment to which the Company is a party or by which
it is bound; or (d) to the Company's knowledge, any statute, rule or
governmental regulation applicable to the Company.
3.5 NO MATERIAL LIABILITY. As of the date of this Agreement, there are no
outstanding material liabilities except for those that are set forth in the
Financial Statements.
3.6 DISTRIBUTION. As of the date of the Financial Statements, there has
been no declaration or payment by the Company of any dividend, nor any
distribution by the Company of any assets of any kind, to any of its
shareholders with respect to any of the Company's securities, except as set
forth in the Financial Statements.
3.7 CONFLICT OF INTEREST. The Company and its executive officers have no
interest (other than as holders of securities of a publicly-traded company)
that are material to the Company's ability to meet its responsibilities and
obligations under this Agreement and the Development Agreement, either directly
or indirectly, in any entity, including, without limitation thereto, any
corporation, partnership, joint venture, proprietorship, firm, person,
licensee, business or association (whether as an employee, officer, director,
shareholder, agent, independent contractor, security holder, creditor,
consultant or otherwise) that presently (i) provides any services, or designs,
produces and/or sells any products, or engages in any activity which is the
same, similar to or competitive with any activity or business in which the
Company is now engaged or proposes to become engaged; (ii) is a supplier,
customer, or creditor of the Company, or has an existing contractual
relationship with any of the Company's managing employees; or (iii) has any
direct or indirect interest in any asset or property, real or personal,
tangible or intangible, of the Company or any property, real or personal,
tangible or intangible, that is necessary or desirable for the conduct of the
Company's business.
3.8 INSURANCE. The Company has in full force and effect fire and casualty
insurance policies, with extended coverage, reasonably sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its
properties that might be damaged or destroyed. The Company has also obtained
any other insurance coverages with respect to risks associated with its
business in such amounts as are customary in its industry.
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ARTICLE IV
CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT THE CLOSING
The obligations of the Investor under this Agreement to purchase the Shares
from the Company are subject to the fulfillment on or before the Closing of
each of the following conditions, any of which may be waived in writing by the
Investor:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Article I and Article III of this Agreement shall be
true on and as of the Closing with the same effect as though such
representation and warranties had been made on and as of the Closing.
4.2 PERFORMANCE. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Investor a certificate dated as of the Closing, executed by an executive
officer of the Company and in a form reasonably acceptable to the Investor,
certifying that the conditions set forth in Sections 4.1 and 4.2 have been
satisfied and that there has been no material adverse change in the assets,
properties, prospects, condition, affairs, operations or business of the
Company, as now conducted or as proposed to be conducted, since the date of
this Agreement.
4.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings taken by
the Company in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor, and the Investor shall have received all such
documents as it may have reasonably requested.
4.5 OPINION OF COUNSEL. The Investor shall have received an opinion from
the Company's counsel, dated as of the Closing and in a form and substance
reasonably acceptable to the Investor, to the effect that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation,
and the Company has the requisite corporate power and authority
to own its properties and to conduct its business;
(b) The Company has the requisite corporate power and authority to
execute, deliver and perform this Agreement. This
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Agreement has been duly and validly authorized by the Company,
duly executed and delivered by an authorized officer of the
Company and constitutes a legal, valid and binding obligation of
the Company enforceable in accordance with its terms, except as
enforceability may be limited by law affecting the rights of
creditors generally;
(c) The capitalization of the Company is as set forth in this
Agreement;
(d) The certificates representing the Shares are in due and proper
form and have been duly and validly executed by the officers of
the Company named thereon;
(e) The execution, delivery, performance and compliance with the
terms of this Agreement do not violate any provision of the
Company's Articles of Incorporation or By-laws and, to the best
of such counsel's knowledge, do not conflict with or constitute a
default under the provisions of any judgment, writ, decree, order
or agreement to which the Company is a party or by which it is
bound, which conflict or default would be materially adverse to
the Company.
(f) All consents, approvals, orders or authorizations of, and all
qualifications, registrations, designations, declarations, or
filings with, any federal, state of incorporation or principal
place of business governmental authority required to be made
prior to the Closing in connection with the consummation of the
transactions contemplated by this Agreement have been obtained,
and are effective, as of the Closing and such counsel is not
aware of any proceedings, or threat thereof, which question the
validity thereof;
(g) Based in part upon the representations of the Investor set forth
in this Agreement, the offer and sale of the Shares pursuant to
the terms of this Agreement are exempt from the registration
requirements of Section 5 of the Securities Act and from any
state qualification requirements of the Company's state of
incorporation and principal place of business;
(h) Such counsel is not aware of any action, proceeding or
investigation pending against the Company or any of its officers,
directors, or employees, or that any of the foregoing has
received any threat thereof, which questions the validity of this
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Agreement, or the right of the Company or its officers or
directors to enter into this Agreement.
(i) The Shares have been duly and validly authorized and issued
(including, without limitation, issued in compliance with
applicable federal and state securities laws), fully paid and
non-assessable and not subject to any preemptive rights, liens,
claims or encumbrances, or other restriction on transfer, except
as set forth in this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
OPHIDIAN PHARMACEUTICALS, INC. XXX XXXXX AND COMPANY
By By
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Xxxxxxx X. Xxxxxxxx August X. Xxxxxxxx
President Executive Vice President
Science and Technology
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**** Indicates where confidential material has been omitted and filed
separately with the Commission
EXHIBIT E
IMMUNOLOGY INVESTIGATIONS
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97
OPHIDIAN PHARMACEUTICALS, INC.
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0000 Xxxx Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000 Phone: (000) 000-0000
Fax: (000) 000-0000
EXHIBIT F
XX. XXXXXXX XXXXXXXX, PRESIDENT & CEO
OPHIDIAN PHARMACEUTICALS, INC.
FOR IMMEDIATE RELEASE (000) 000-0000
XXXXX X. XXXXXX
XXX XXXXX AND COMPANY
(000) 000-0000
LILLY AND OPHIDIAN TEAM UP TO DEVELOP A NEW, NON-ANTIBIOTIC
THERAPY FOR SERIOUS GASTROINTESTINAL INFECTIONS
June 4, 0000, Xxxxxxxxxxxx, XX; Madison, WI. Xxx Xxxxx and Company and Ophidian
Pharmaceuticals, Inc. announced today that they will jointly develop a new type
of pharmaceutical for the treatment of gastrointestinal infections. The
collaborative effort will first focus on developing Ophidian's lead compound to
treat Clostridium difficile - associated diseases (CDAD). CDAD is a serious
diarrheal disease that results from broad-spectrum antibiotic therapy of other
infections and is increasing at an alarming rate worldwide. Unlike currently
available antibiotics used to treat CDAD, the new compound selectively targets
toxins produced by the disease-causing microbe and not the intestine's normal
microbes. This approach should provide more effective management of CDAD.
Under the agreement, Ophidian could receive up to $12.4 million in equity
investments, milestone and other precommercial payments and will manufacture
the compound for Lilly. Lilly will conduct clinical testing, register and
market of the drug worldwide. In addition, the companies will begin to
negotiate an agreement for the supply of Ophidian's companion CDAD diagnostic
product.
The overuse of powerful, broad-spectrum antibiotics has led to a growing
medical problem of antibiotic resistance and opportunistic infections.
"Broad-spectrum antibiotics indiscriminately destroy both the good and the bad
bacteria" comments Xx. Xxxxxx Xxxx, Head, Section of Infectious Diseases, at
the University of Wisconsin Hospitals and Clinics. "Some bacteria that escape
through resistance, and others like C. difficile that sprout like weeds in the
barren gut, multiply at an alarming rate--especially in hospitals," explains
98
Xx. Xxxx. The normal bacterial residents of the gut keep C. difficile in check.
When this ecological balance is altered by antibiotics, C. difficile can take
over.
CDAD now affects hundreds of thousands of hospitalized patients worldwide.
Already weakened by other conditions, infected patients often develop diarrhea,
but some progress to a more debilitating or life-threatening form of the
disease--colitis. CDAD also adds considerably to treatment and containment
costs, imposing a growing economic burden on hospitals.
Antibiotics used to treat CDAD, while effective, further devastate the
intestinal microbial ecology--thereby promoting selection and over growth of
drug-resistant microbes in the gut. One intestinal bacterial species, the
enterococcus, are now resistant to virtually all antibiotics. To address this
difficult issue, Ophidian developed an antibody that specifically targets the
toxins of C. difficile, thus allowing the normal bacteria to recover and
contribute to the patient's natural defenses.
Comments August Watanabe, M.D., Lilly Executive Vice President, Science and
Technology, "As a leader in the treatment of infectious diseases, Lilly is
committed to providing solutions to unmet medical needs, such as this difficult
problem. Ophidian's technology offers the potential for more effective CDAD
therapy while helping to preserve the usefulness of essential antibiotics."
"While still early in the development process Ophidian has collected extensive
preclinical data showing the compound's efficacy in animals," says Xx. Xxxxxxx
Xxxxxxxx, President and Chief Executive Officer of Ophidian. "To make this
approach work, we had to combine several scientific and manufacturing
strengths. First we focused on discovering what parts of the disease process
make the best drug target. Then we designed antibodies that block this target
and found a way to get these antibodies through the digestive system to the
diseased parts of the gut. What we now have is a technology which has the
potential to
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99
create an expanding family of products to manage gastrointestinal
infections. Lilly's unparalleled strengths in biologic products and infectious
disease management make them a perfect partner for this product," adds
Xxxxxxxx.
Lilly is a global research-based pharmaceutical corporation headquartered in
Indianapolis, IN, that is dedicated to creating and delivering superior health
care solutions--by combining pharmaceutical innovation, existing pharmaceutical
technology, disease prevention and management, and information technologies--in
order to provide customers worldwide with optimal clinical and economic
outcomes.
Ophidian is a privately-held biopharmaceutical firm headquartered in Madison,
WI, focused on the discovery and development of new drugs to prevent and treat
infectious diseases. Ophidian's proprietary technologies for the production and
oral delivery of pathogen-specific anti-infectives have opened a new pathway to
the management of gastrointestinal infections that does not lead to antibiotic
resistance or opportunistic infections.
Page 3 of 3
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separately with the Commission
Schedule 8.2
MANUFACTURING MILESTONES
Section 8.2(a) Manufacturing Milestone:
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Section 8.2(b) Manufacturing Milestone:
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Section 8.2(c) Manufacturing Milestone:
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101
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separately with the Commission
Schedule 1.20
Lilly Patents
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102
Schedule 1.26
Ophidian Patents
United States Patent Appln. Serial No. 07/985,321, filed 12/4/92
PCT Patent Appln. No. PCT/U.S. 93/11755, filed 00-0-00
Xxxxxx Xxxxxx Patent Appln. Serial No. 08/329,154, filed 10/24/94
United States Patent Appln. Serial No. 08/422,711, filed 4/14/95
United States Patent Appln. Serial No. 08/456,997, filed 6/1/95
Canadian Patent Appln. Xx. 0000000, xxxxx 0/0/00
Xxxxxx Xxxxxx Patent Appln. Serial No. 08/456,847, filed 6/1/95
United States Patent Appln. Serial No. 08/480,604, filed 6/7/95
United States Patent Appln. Serial No. 08/161,907, filed 12/2/93
PCT Patent Appln. No. PCT/U.S. 94/03765, filed 4/6/94
PCT Patent Appln. No. PCT/U.S. 95/13737, filed 00-00-00
Xxxxxx Xxxxxx Patent Appln. Serial No. 08/457,890, filed 6/1/95
Australian Patent Appln. No. 66538/94, filed 7/3/95
EPC Patent Appln. No. 94 903 438.3, filed 6/12/95
United States Patent Appln. Serial No. 08/457,048, filed 6/1/95
103
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separately with the Commission
Schedule 9.2
Projected Sales at Effective Date
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104
**** Indicates where confidential material has been omitted and filed
separately with the Commission Schedule A-2
Base Bulk Drug Substance Manufacturing Process
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