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EXHIBIT 10.17
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406. * INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST THAT IS FILED SEPARATELY WITH THE COMMISSION.
JOINT VENTURE AGREEMENT
AMONG
SEQUANA THERAPEUTICS, INC.,
MEMORIAL XXXXX-XXXXXXXXX CANCER CENTER
AND
GENOS BIOSCIENCES, INC.
DATED AS OF
JANUARY 29, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
ARTICLE II
FORMATION OF THE COMPANY
2.1 Name and Office.......................................................................... 8
2.2 Business Purposes........................................................................ 8
2.3 Fiscal Year.............................................................................. 8
2.4 Limitation on Authority.................................................................. 8
ARTICLE III
CONTRIBUTIONS
3.1 Initial Contributions by the Shareholders................................................ 9
3.2 Issuance of Shares of Class A Common Stock to the Shareholders........................... 9
3.3 Additional Contributions by the Shareholders............................................. 9
ARTICLE IV
MANAGEMENT
4.1 Board of Directors...................................................................... 10
4.2 Authority of the Board of Directors...................................................... 12
4.3 Adoption of Annual Plan.................................................................. 13
4.4 Required Approval for Certain Actions.................................................... 13
4.5 Deadlock................................................................................. 15
4.6 Officers................................................................................. 15
4.7 Scientific Advisory Committee............................................................ 16
4.8 Company Equity Plan...................................................................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARTIES; INDEMNIFICATION
5.1 Representations and Warranties of Sequana................................................ 17
5.2 Representations and Warranties of MSK.................................................... 18
5.3 Survival of Representations and Warranties............................................... 19
5.4 Indemnification of the Company by Sequana................................................ 20
5.5 Indemnification of the Company by MSK.................................................... 20
5.6 Indemnification Procedure................................................................ 20
ARTICLE VI
AGREEMENTS OF THE PARTIES
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6.1 Other Business Activities; Exculpation................................................... 21
6.2 Company Rights of First Negotiation...................................................... 21
6.3 Sequana Right of First Negotiation....................................................... 22
6.4 Rights of the Company.................................................................... 23
6.5 Interested Party Transactions............................................................ 23
6.6 Confidentiality.......................................................................... 23
6.7 Consents and Approvals................................................................... 24
ARTICLE VII
SHAREHOLDER REPORTS
7.1 Independent Auditors..................................................................... 24
7.2 Reports to Shareholders.................................................................. 24
ARTICLE VIII
ADMISSION OF NEW SHAREHOLDERS;
TRANSFER OF INTERESTS
8.1 Issuance of Shares....................................................................... 25
8.2 Transfer of Shares....................................................................... 25
8.3 Sequana Change of Control................................................................ 26
ARTICLE IX
TERMINATION OF THE AGREEMENT
9.1 Termination Events....................................................................... 26
9.2 Events Upon Termination of the Agreement................................................. 27
9.3 Distribution Upon Termination of the Agreement........................................... 28
9.4 Distributions in Cash or in Kind......................................................... 28
9.5 Time for Liquidation..................................................................... 28
9.6 Shareholders Not Personally Liable for Return of Capital Contributions................... 29
9.7 Ownership of Results..................................................................... 29
9.8 Survival of Termination.................................................................. 29
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendments............................................................................... 29
10.2 Notices.................................................................................. 29
10.3 Counterparts............................................................................. 31
10.4 Table of Contents and Headings........................................................... 31
10.5 Successors and Assigns................................................................... 31
10.6 Severability............................................................................. 31
10.7 Non-Waiver............................................................................... 31
10.8 Applicable Law........................................................................... 31
10.9 Entirety of Agreement.................................................................... 31
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Exhibit A By-laws..................................................................................A-1
Exhibit B Certificate of Incorporation.............................................................B-1
Exhibit C MSK License Agreement....................................................................C-1
Exhibit D MSK Services Agreement...................................................................D-1
Exhibit E Sequana License Agreement................................................................E-1
Exhibit F Sequana Services Agreement...............................................................F-1
Exhibit G 1997 Annual Plan.........................................................................G-1
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JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT, dated as of the 29th day of January,
1997, among Sequana Therapeutics, Inc., a California corporation ("Sequana"),
and Memorial Xxxxx-Xxxxxxxxx Cancer Center, a New York not-for profit
corporation ("MSK" and, together with Sequana, the "Shareholders") and Genos
Biosciences, Inc., a Delaware corporation (the "Company").
WHEREAS, Sequana and MSK have entered into an Agreement in
Principle, dated as of August 20, 1996 (the "Agreement in Principle"), setting
forth the terms on which Sequana and MSK propose to establish the Company in
order to conduct a joint venture with the commercial purposes of researching and
identifying genes and related gene sequence information associated with the
etiology of breast, prostate and colon cancer;
WHEREAS, immediately prior to the execution hereof, the
Shareholders have formed the Company for the purpose of conducting the joint
venture;
WHEREAS, concurrently with the execution hereof, each of Sequana
and MSK will enter into a License Agreement (collectively, the "License
Agreements") with the Company pursuant to which each of Sequana and MSK will
grant certain rights to the Company;
WHEREAS, concurrently with the execution hereof, each of Sequana
and MSK will enter into a Warrant Agreement (the "Warrant Agreement") pursuant
to which Sequana will issue and sell to MSK a warrant to purchase 350,000 shares
of Sequana common stock, par value $.01 per share;
WHEREAS, concurrently with the execution hereof, each of Sequana
and MSK is contributing the initial capital of the Company (the "Initial
Contribution");
WHEREAS, in consideration for each party's Initial Contribution
and execution of its respective License Agreement, Sequana and MSK will each
initially own fifty percent (50%) of the outstanding voting stock of the
Company; and
WHEREAS, the parties desire to confirm their understandings with
respect to the manner in which the Company will be organized and operated
subsequent to the date hereof and their understandings with respect to their
respective stock ownership in the Company.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby covenant and agree as follows:
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ARTICLE I
DEFINITIONS
As used herein the following terms have the meaning set forth
below:
"Affiliate" shall mean, in respect of any specified Person, a
Person that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, the Person
specified.
"Agreement" shall mean this Joint Venture Agreement among Sequana,
MSK and the Company.
"Agreement in Principle" shall have the meaning given to such term
in the recitals hereto.
"Annual Plan" shall have the meaning given to such term in Section
4.3. The 1997 Annual Plan is attached hereto as Exhibit G.
A Person shall be deemed the "beneficial owner" of, and shall be
deemed to "beneficially own," any securities which such Person or any of its
Affiliates is deemed to "beneficially own" within the meaning of Rule 13d-3
under the Exchange Act.
"Board" shall have the meaning given to such term in Section 4.1.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York or California) on
which banks are open for business in New York, New York and San Diego,
California.
"Business Plan" shall mean a business plan for the Company for the
three year period ending December 31, 1999 setting forth the proposed plan of
operations for the Company, including a forecast of expenditures and operating
costs in sufficient detail to enable the Shareholders to have a clear
understanding of the nature of such proposed plans and expenditures and the
reasons therefor.
"By-laws" shall mean the By-laws of the Company substantially in
the form attached hereto as Exhibit A.
"Certificate of Incorporation" shall mean the Certificate of
Incorporation of the Company substantially in the form attached hereto as
Exhibit B.
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"Chairman" shall have the meaning given to such term in Section
4.1.
"Chief Executive Officer" shall have the meaning given to such
term in Section 4.6.
"Class A Common Stock" shall mean the Company's Class A Common
Stock, par value $.01 per share.
"Class B Common Stock" shall mean the Company's Class B Common
Stock, par value $.01 per share.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the Class A Common Stock together with
the Class B Common Stock.
"Company" shall mean Genos Biosciences, Inc., a Delaware
corporation.
"Company Opportunity" shall have the meaning given to such term in
Section 6.3.
"Control" shall mean, with respect to a particular Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of such
Person.
"Deadlock" shall have the meaning given to such term in Section
4.5 hereof.
"Equity Plan" shall have the meaning given to such term in Section
4.8.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"Field" shall mean the identification and biological
characterization of genes, regulatory elements and patterns of expression that
cause, or create a predisposition to, or involve the natural history, response
to therapy or suppression of, breast, prostate and colon cancer for the purpose
of the commercial development of diagnostic, prognostic and therapeutic products
and services therefrom with respect to such three types of cancer.
"Fiscal Year" shall mean the fiscal year of the Company, as
determined pursuant to Section 2.3 hereof.
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"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time.
"Initial Contribution" shall have the meaning given to such term
in the recitals hereto and ss. 3.1(a) and (b).
"IND" or "Investigational New Drug Application" shall mean an
application to the United States Food and Drug Administration or the equivalent
agency of Canada, Japan or any country in the European Union to commence Phase I
clinical trials of a drug.
"Indemnified Party" shall have the meaning given to such term in
Section 5.6.
"Indemnifying Party" shall have the meaning given to such term in
Section 5.6.
"Independent Director" for purposes of ss. 4.1(c) and (d) shall
mean a person who (i) is in fact independent, (ii) does not have any direct
financial interest or any material indirect financial interest in Sequana or MSK
or any of their respective Affiliates (other than by reason of ownership of not
more than 1% of any class of securities thereof), and (iii) is not connected
with Sequana or MSK or any of their respective Affiliates as an officer,
employee, consultant, agent, advisor, representative, trustee, partner, director
(other than of the Company) or person performing similar functions.
"Insolvency Event" shall mean, with respect to any Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the filing of
a voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or
insolvent, or having had entered against such Person an order for relief in any
bankruptcy or insolvency proceeding, (iv) the filing by such Person of a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, (v) the filing by such Person of an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against such Person in any proceeding specified in (vii) below, (vi) seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator of such Person or of all or any substantial part of the assets of
such Person or (vii) the failure to obtain dismissal within 60 days of the
commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, or the entry of any order
appointing a trustee, liquidator or receiver of such Person or of such Person's
assets or any substantial portion thereof.
"Intellectual Property Holding Company" shall have the meaning
given to such term in Section 9.7.
"Interested Party Transaction" shall mean any transaction or
series of similar transactions to which the Company is a party in which the
amount involved exceeds $50,000
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and in which any of the following has a direct or indirect material
interest: any director, employee or holder of more than 1% of the outstanding
shares of capital stock of the Company.
"License Agreements" shall have the meaning given to such term in
the recitals hereto.
"Losses" shall mean all losses, damages, liabilities, claims,
out-of-pocket costs and expenses, of any nature or kind, known or unknown,
fixed, accrued, absolute or contingent, liquidated or unliquidated, including,
without limitation, any and all legal expenses.
"Management" shall have the meaning given to such term in Section
4.6 hereof.
"MSK" shall have the meaning set forth in the preamble hereto.
"MSK Data" shall have the meaning given such term in the MSK
License Agreement.
"MSK License Agreement" shall mean the License Agreement dated as
of the date hereof between the Company and MSK substantially in the form
attached hereto as Exhibit C.
"MSK Opportunity" shall have the meaning given to such term in
Section 6.2(b) hereof.
"MSK Services Agreement" shall mean the Services Agreement dated
as of the date hereof between the Company and MSK substantially in the form
attached hereto as Exhibit D.
"Other MSK Agreements" shall have the meaning set forth in
Section 5.2(b).
"Other Sequana Agreements" shall have the meaning set forth in
Section 5.1(b).
"NDA" or "New Drug Application" shall mean a new drug application
to the United States Food and Drug Administration or the equivalent agency of
Canada, Japan or any country in the European Union to commence commercial sales
of a drug.
"Officers" shall have the meaning given to such term in Section
4.6(e) hereof.
"Permitted Persons" shall have the meaning given to such term in
Section 6.1 hereof.
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"Person" shall mean any individual, entity, firm, corporation,
partnership, association, limited liability company, joint-stock company, trust,
or unincorporated organization.
"Related Party" shall mean, with respect to any Person who is not
an individual, a stockholder, director, officer, employee, partner or member of
such Person.
"Research" shall mean all work by or on behalf of the Company in
the Field during the term of this Agreement.
"Research Director" shall have the meaning given to such term in
Section 4.6 hereof.
"Results" shall have the meaning set forth in Section 6.4 hereof.
"Scientific Advisory Committee" shall have the meaning set forth
in Section 4.7 hereof.
"Senior Management" shall have the meaning set forth in Section
4.6(d) hereof.
"Sequana" shall have the meaning set forth in the preamble hereto.
"Sequana Change in Control" shall occur upon any of the following:
(i) any "person" (as defined in Section 13(d) of the Exchange Act) is or becomes
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, through a purchase, merger or other acquisition transaction or
series of transactions, of more than 50% of the total voting power of all shares
of capital stock of Sequana entitled to vote generally in the election of
directors (the "Voting Shares") unless the event(s) resulting in such beneficial
ownership is a Business Combination (as defined below) following which each of
subclause (A) through (C) of clause (iv) of this paragraph apply, or (ii) a
change in the composition of the Board of Directors of Sequana such that the
individuals who, as of the date hereof, constitute the Sequana Board (the
"Incumbent Board"), cease for any reason to constitute at least a majority of
the Sequana Board; provided, however, that for purposes hereof, any individual
who becomes a member of the Sequana Board whose election was approved by a
majority of the Incumbent Board (other than in response to an actual or
threatened (in writing) election contest or other solicitation of proxies or
consents) will be considered as though such individual were a member of the
Incumbent Board; or (iii) the sale or other disposition (including by merger,
consolidation or otherwise) of all or substantially all of the assets of Sequana
as an entirety to a "person" (as defined in Section 13(d) of the Exchange Act);
or (iv) the consummation of a reorganization, merger or consolidation (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the Persons who were the beneficial
owners of the outstanding Voting Shares immediately prior to such Business
Combination beneficially own, directly
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or indirectly, more than 50% of the then outstanding shares of voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns Sequana
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the outstanding Voting Shares, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of Sequana or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (C) at least a majority
of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination.
"Sequana License Agreement" shall mean the License Agreement dated
as of the date hereof between the Company and Sequana substantially in the form
attached hereto as Exhibit E.
"Sequana Opportunity" shall have the meaning given to such term in
Section 6.2(a) hereof.
"Sequana Services Agreement" shall mean the Services Agreement
dated as of the date hereof between the Company and Sequana substantially in the
form attached hereto as Exhibit F.
"Sequana Technology" shall have the meaning given to such term in
the Sequana License Agreement.
"Services Agreements" shall mean the MSK Services Agreement and
the Sequana Services Agreement.
"Shareholder Chief Executive Officers" shall have the meaning
given to such term in Section 4.5 hereof.
"Shareholders" shall mean Sequana and MSK.
"Supermajority Approval" shall have the meaning given to such term
in Section 4.4 hereof.
"Termination Event" shall have the meaning given to such term in
Section 9.1 hereof.
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"Transfer" shall have the meaning given to such term in Section
8.2.
"Warrant Agreement" shall have the meaning given to such term in
the recitals hereto.
ARTICLE II
FORMATION OF THE COMPANY
2.1 Name and Office.
(a) The name of the Company shall be "Genos Biosciences,
Inc."
(b) The Company shall initially maintain an office at 00000
X. Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xx Xxxxx, XX 00000. At any time hereafter, the
Board may change the principal office of the Company.
(c) The registered office of the Company shall be located at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (New Castle County), and the
registered agent for service of process on the Company at such address shall be
The Corporation Trust Company, unless and until changed by the Board.
2.2 Business Purposes. Unless otherwise agreed by the
Shareholders, the purposes of the Company are (i) to research and identify and
biologically characterize genes and related genetic sequence information
associated with the etiology of breast, colon and prostate cancer for the
purpose of developing and selling diagnostic, prognostic and therapeutic
products and services, (ii) licensing any such technologies, products and
services, as the Board deems advisable, (iii) establishing commercial and
academic relationships with entities in addition to the Shareholders in order to
further the Company's business objectives including, without limitation, to
secure state-of-the-art technology, clinical expertise and clinical materials
and (iv) to engage in such other activities in connection with the foregoing as
the Board deems necessary or advisable.
2.3 Fiscal Year. Unless otherwise agreed by the Board, the fiscal
year of the Company shall end on December 31, and the initial fiscal year of the
Company shall commence on the date hereof and end on December 31, 1996.
2.4 Limitation on Authority. Nothing in this Agreement shall be
construed to make either Shareholder the agent of the other. Neither Shareholder
shall have the authority to bind the other or the Company except as expressly
provided by the terms of this Agreement.
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ARTICLE III
CONTRIBUTIONS
3.1 Initial Contributions by the Shareholders.
(a) Contemporaneously with the execution hereof:
(i) Sequana shall contribute to the Company $1,185,400 in
immediately available funds;
(ii) Sequana shall contribute intellectual property to the
Company by entering into the Sequana License Agreement; and
(iii) Sequana and the Company shall enter into the Sequana
Services Agreement.
(b) Contemporaneously with the execution hereof:
(i) MSK shall contribute to the Company $814,600 in immediately
available funds;
(ii) MSK shall contribute biological material and records, and
intellectual property rights in and to the same, to the
Company to the extent provided in the MSK License Agreement;
and
(iii) MSK and the Company shall enter into the MSK Services
Agreement.
3.2 Issuance of Shares of Class A Common Stock to the
Shareholders. In consideration for each party's Initial Contribution and
the execution of its respective License Agreement, the Company shall issue to
each of the Shareholders 200,000 shares of Class A Common Stock.
3.3 Additional Contributions by the Shareholders.
(a) Upon the approval by the Board of the Business Plan,
each Shareholder shall invest in the Company $2 million in immediately
available funds in exchange for 400,000 shares of Class A Common Stock each.
(b) Any request by the Board for a capital contribution to
the Company by the Shareholders in addition to those contemplated by Section
3.3(a) must be approved by the Supermajority Approval specified in Section 4.4
hereof. In the event of such approval, the Board shall notify the Shareholders
of the amount of additional capital
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contribution required from each and the date by which such additional capital
contribution shall be made to the Company. Upon written notice from the Board,
each of the Shareholders agrees to make a capital contribution to the Company
of up to an additional $2 million in immediately available funds.
(c) The Shareholders agree that the prompt contribution of
capital to the extent specifically required hereunder is of the essence and
subject to the terms of Section 4.3(b) hereof, that the failure to make such
payments as provided herein will constitute a "material breach of a material
provision" for purposes of Section 9.1(c) and (d) hereunder.
ARTICLE IV
MANAGEMENT
. 4.1 Board of Directors.
(a) Prior to or immediately following the execution hereof,
the Shareholders shall elect a new Board of Directors of the Company (the
"Board") which shall consist initially of six (6) directors with three (3)
directors to be designated by Sequana (the "Sequana Directors") and three (3)
directors to be designated by MSK (the "MSK Directors"). The Sequana Directors
shall initially consist of: Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, and Xxxxx Xxxxx. The
MSK Directors shall initially consist of: Xxxx Xxxxx, Xxxx Xxxx and Xxxx Xxxxx.
(b) If the Board so determines by the Supermajority Approval
specified in Section 4.4 hereof, the Shareholders shall increase membership on
the Board by one (1) by electing the Chief Executive Officer to the Board.
(c) If the Board so determines by the Supermajority Approval
specified in Section 4.4 hereof, the Shareholders shall increase membership on
the Board by two (2) by electing two (2) Independent Directors. Subject to
ratification by the MSK Directors, the Sequana Directors may designate one (1)
of the Independent Directors. The Independent Director designated by Sequana
shall be deemed a "Sequana Director" for all purposes of this Agreement. Subject
to ratification by the Sequana Directors, the MSK Directors may designate one
(1) of the Independent Directors. The Independent Director designated by MSK
shall be deemed a "MSK Director" for all purposes of this Agreement. All
Shareholder voting (including, but not limited to, voting pursuant to Sections
4.1(e) - (h) hereof) with respect to Independent Directors shall be subject to
the ratification requirements contemplated by this Section 4.1(c).
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(d) If the Board so determines by the Supermajority Approval
specified in Section 4.4 hereof, the chairman of the Board (the "Chairman")
shall preside at meetings of the Board and either:
(i) shall be the Chief Executive Officer; or
(ii) the Shareholders shall increase membership on the Board by one (1),
and the Chairman shall be an Independent Director.
(e) Each of Sequana and MSK agrees to vote, in person or by
proxy, all of the shares of Class A Common Stock owned by such Shareholder, at
any meeting of shareholders or in any written consent in lieu thereof called for
the purpose of voting on the election of directors, in favor of the Sequana
Directors and the MSK Directors and to take all other action (if any) necessary
to cause the Board to be comprised of such individuals.
(f) If a vacancy is created on the Board by reason of the
death, removal or resignation of a Sequana Director, each of Sequana and MSK
agrees to take such steps (including voting to remove or elect individuals as
directors and to fill vacancies) as shall be necessary to permit Sequana to
designate a replacement Sequana Director.
(g) If a vacancy is created on the Board by reason of the
death, removal or resignation of a MSK Director, each of Sequana and MSK agrees
to take such steps (including voting to remove or elect individuals as directors
and to fill vacancies) as shall be necessary to permit MSK to designate a
replacement MSK Director.
(h) Upon the receipt of written instructions from Sequana,
the Board and MSK shall take such actions as shall be necessary to remove any of
the Sequana Directors (including voting to remove or elect individuals as
directors and to fill vacancies). Upon receipt of written instructions from MSK,
the Board and Sequana shall take such actions as shall be necessary to remove
any of the MSK Directors (including voting to remove or elect individuals as
directors and to fill vacancies).
(i) As set forth in the By-laws, the Board shall meet a
minimum of one (1) time in each fiscal quarter. The schedule for regular
meetings of the Board shall be established at a Board meeting held in
conjunction with the annual meeting of the stockholders.
(j) Each director of the Company shall be given at least ten
(10) business days notice in writing of any meeting of the Board which notice
shall contain the time and place of such meeting, and shall specify to a
reasonable degree, the purpose of such meeting; provided that such notice to any
director may be waived by such director either before or after the meeting. Such
notice shall be given in the manner specified in the By-laws.
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(k) Subject to Section 4.4 hereof, no action shall be taken
at any meeting of the Board of Directors, except for the adjournment of such
meeting, unless a majority of the Directors, and at least two MSK Directors and
two Sequana Directors, shall be present. Notwithstanding any other provision of
this Agreement, the Certificate of Incorporation or the By-laws, any
determination to cause the Company to (x) seek indemnification against a
Shareholder pursuant to Sections 5.4 or 5.5 hereof, (y) to exercise the rights
of first negotiation set forth in Sections 6.2(a) and 6.2(b) hereof or (z) to
seek to enforce the Company's rights under the MSK License Agreement, the
Sequana License Agreement, the MSK Services Agreement or the Sequana Services
Agreement, shall only require a quorum, and the vote, of the directors not
having an interest in such matter. For the purposes of this Section 4.1(k), the
Sequana Directors shall be deemed to not have an interest in the Company's
determination to (x) seek indemnification against MSK pursuant to Section 5.5,
(y) exercise the rights of first negotiation set forth in Section 6.2(b), or (z)
seek to enforce the Company's rights under the MSK License Agreement or the MSK
Services Agreement. For the purposes of this Section 4.1(k), the MSK Directors
shall be deemed to not have an interest in the Company's determination to (x)
seek indemnification against Sequana pursuant to Section 5.4, (y) exercise the
rights of first negotiation set forth in Section 6.2(a), or (z) seek to enforce
the Company's rights under the Sequana License Agreement or the Sequana Services
Agreement.
For purposes of the foregoing and to the extent permitted
under applicable law, any director may be present at any meeting in person, by
means of telephone or similar communication equipment by means of which each
person participating in the meeting can hear and speak to each other.
(l) Any action required or permitted to be taken at a
meeting of the Board may be taken without a meeting if a written consent to such
action, setting forth the action so taken, shall be signed by all of the
Directors, and such consent shall have the same force and effect as a duly
conducted vote of the Board. A counterpart of each such consent to action shall
be delivered to the Secretary of the Company for placement in the minute books
of the Company, but the failure to deliver a counterpart of any such consent to
action to the Secretary shall not affect the validity or effectiveness of such
consent to action.
(m) Each of Sequana and MSK agree that each committee of the
Board created by the Board in accordance with the Company's By-laws shall
include at least one Sequana Director and one MSK Director, and that no
committee of the Board will be delegated the authority or authorized to approve
on behalf of the Board or the Company any of the matters requiring Supermajority
Approval set forth in Section 4.4 hereof.
4.2 Authority of the Board of Directors. The Board of Directors
of the Company shall have and exercise all of the powers belonging or
pertaining to the Company, except with respect to such matters as by law,
the Certificate of Incorporation, the By-laws or this Agreement, require the
action of the stockholders of the Company. Members of the
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Board of Directors shall have full and free access to the facilities,
operations and records of the Company during normal business hours.
4.3 Adoption of Annual Plan.
(a) The Board of Directors shall endeavor to adopt on or
before November 30 of each fiscal year, an annual plan setting forth the
proposed fiscal and other basic policies of the Company, including the proposed
capital and expense budget for the Company and the business endeavors in which
the Company shall engage in the next fiscal year (as adopted, supplemented or
amended from time to time in accordance with Section 4.4 hereof, the "Annual
Plan"). The particular Research projects to be carried out in each fiscal year
will be described in the Annual Plan and the Annual Plan will delineate the
specific studies, timetable and technical goals to be pursued by the Company
during the applicable fiscal year. The business and affairs of the Company shall
be conducted in accordance with the terms of the Annual Plan. The Annual Plan
for the 1997 fiscal year is attached hereto as Exhibit G.
(b) In the event that the Board of Directors fails to
approve an Annual Plan by November 30 for the succeeding fiscal year in
accordance with Section 4.4 hereof, the Shareholders agree to use their good
faith efforts to develop an Annual Plan that can be so approved. In the event
that an Annual Plan shall not have been approved by the Board by March 31 of the
fiscal year to which such Annual Plan relates, the Board shall promptly notify
the Research Director and upon receipt of such notice the Research Director
shall suspend all research being conducted by the Company at such time. To the
extent that there are any pending additional capital contributions pursuant to
Section 3.3(c) hereof, the respective obligations of the Shareholders to make
such contributions shall be suspended until such time as the Annual Plan for
such year is approved.
4.4 Required Approval for Certain Actions. Except as
specifically set forth herein, in accordance with the Company's By-laws, the
Company's Board shall act by the vote of a majority of the directors present at
a meeting and the required quorum for a meeting of the Board shall be as
specified in Section 4.1(k). Notwithstanding the foregoing, the following
actions shall require supermajority approval ("Supermajority Approval") by one
of the following methods: (i) by the unanimous vote of the Sequana Directors and
MSK Directors present at a duly held meeting, (ii) by the unanimous written
consent of all the members of the Board (at a time when there is no more than
one vacancy among the Sequana Directors or the MSK Directors respectively) or
(iii) by each of (A) the majority vote of the Board at a duly held meeting of
the Board, (B) by written consent of Sequana and (C) by written consent of MSK:
(a) the approval of any amendments or modifications to the
1997 Annual Plan, and the approval of the Annual Plan of the Company or any
amendments or modifications thereto for all years after the fiscal year ending
December 31, 1997;
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(b) the approval of the Business Plan or any amendments or
modifications thereto;
(c) the incurrence by the Company of indebtedness not
provided for in the Annual Plan in excess of $100,000 in the aggregate in any
fiscal year;
(d) the filing of an IND, NDA, patent application or other
application or filing with any U.S. or foreign regulatory agency;
(e) the approval or implementation of any commercial
application of Results;
(f) entering into any license agreement, or other material
third party contract;
(g) the appointment and removal of and the approval of
compensation for members of Senior Management of the Company;
(h) the approval of compensation for the members of the
Scientific Advisory Committee;
(i) the approval of capital expenditures not provided for in
the Annual Plan in excess of $100,000 in the aggregate during any fiscal year;
(j) the acquisition or disposition of property or assets of
the Company not provided for in the Annual Plan in excess of $100,000 in the
aggregate in any fiscal year;
(k) the amendment of this Agreement, the Certificate of
Incorporation, the By-laws, the License Agreements, Services Agreements, or any
other agreement between the Company and either of the Shareholders;
(l) the reorganization of the Company in another form or
jurisdiction;
(m) the sale, transfer or issuance of any equity securities
of the Company to any Person, other than pursuant to Section 3.3(a);
(n) the dissolution, liquidation, merger, consolidation,
business combination or other similar transaction involving the Company;
(o) the approval of dividends or other distributions not
provided for in the Annual Plan;
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(p) the approval of any Interested Party Transaction with
either of the Shareholders or their respective Affiliates;
(q) the ratification of the Chief Executive Officer's
appointment of members of the Scientific Advisory Committee, or, if there is no
Chief Executive Officer, the appointment of such members, and the removal of
members of the Scientific Advisory Committee pursuant to Section 4.7 hereof;
(r) the replacement of the independent auditors of the
Company; and
(s) increasing the size of the Board of Directors pursuant
to Section 4.1(b), (c) or (d) or selecting the Chairman pursuant to Section
4.1(d).
provided, however, that if there is any matter which would require Supermajority
Approval pursuant to this Section 4.4, but which has previously been approved as
part of the Annual Plan, the Chief Executive Officer shall be authorized to take
such action without seeking Board approval as otherwise required herein.
4.5 Deadlock. In the event that the Board is unable to reach agreement
after a period of thirty (30) days after a duly called meeting of the Board at
which either Sequana or MSK sought Supermajority Approval of an item specified
in Section 4.4, the Shareholders shall use their reasonable best efforts to
reach an agreement with respect to such matter. In the event that the
Shareholders are unable to reach an agreement with respect to such matter after
an additional period of [***] the matter shall be submitted to the respective
Chief Executive Officer of each of the Shareholders (collectively, the
"Shareholder Chief Executive Officers"). The Shareholder Chief Executive
Officers shall use their reasonable best efforts for a period of [***] following
the time such matter was submitted to the Shareholder Chief Executive Officers
to reach an agreement with respect to such matter. The inability of the
Shareholder Chief Executive Officers to reach an agreement with respect to such
matter after such [***] period shall constitute a "Deadlock" and shall be a
Termination Event for purposes of Article IX hereunder.
4.6 Officers.
(a) Subject only to the overall direction of the Board,
including the obligation to implement the orders and resolutions thereof, and to
the limitations herein set forth, the Chief Executive Officer and the other
executive officers of the Company (as provided in the By-laws) (the
"Management") shall have full and complete authority and responsibility for the
conduct of the operations and business of the Company. The Management, however,
shall not authorize or take, or permit any other Person to authorize or take,
without the prior Supermajority Approval, any of the actions specifically set
forth in Section 4.4.
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(b) Subject to Supermajority Approval, the Board shall elect
a Chief Executive Officer of the Company who shall serve as such until the
earlier of his death or resignation or his removal in accordance with the terms
of this Agreement (the "Chief Executive Officer"). The Chief Executive Officer
shall at all times conform to policies and programs established by the Board and
act to ensure that the business and affairs of the Company are conducted in
accordance with such policies and programs. The Chief Executive Officer may not
be removed or discharged without Supermajority Approval pursuant to Section 4.4.
(c) Subject to Supermajority Approval, from time to time as
appropriate, the Board shall elect a Research Director of the Company who shall
serve as such until the earlier of his death or resignation or removal in
accordance with the terms of this Agreement (the "Research Director"). The
Research Director shall be responsible for preparing reports and directing the
Research, as directed by the Board, the Scientific Advisory Committee or in
accordance with the Annual Plan. The Research Director may not be removed or
discharged without Supermajority Approval pursuant to Section 4.4.
(d) Subject to Supermajority Approval, from time to time as
appropriate, the Board shall elect the other key officers and employees of the
Company (collectively with the Chief Executive Officer and the Research
Director, the "Senior Management"). Members of Senior Management may not be
removed or discharged without Supermajority Approval pursuant to Section 4.4.
(e) From time to time as appropriate, by majority vote the
Board shall elect other officers of the Company, as required by the By-laws or
otherwise, each of whom shall serve until the earlier of his death or
resignation or removal (collectively with the Chief Executive Officer and the
Research Director, the "Officers"). Such members shall have the duties
determined by the By-laws or as determined by the Board.
4.7 Scientific Advisory Committee. Within a reasonable time from the date
hereof, the Shareholders shall appoint a scientific advisory committee (the
"Scientific Advisory Committee") composed of individuals with expertise in the
Field. The Scientific Advisory Committee shall be composed of [***], or
such other number as the Shareholders shall determine. Each Shareholder shall
appoint [***] of the Scientific Advisory Committee, and the appointing
Shareholder shall have the right to terminate and replace such members of the
Scientific Advisory Committee, with or without cause, without the consent of the
Board. The Chief Executive Officer shall recommend, and the Board shall ratify,
by Supermajority Approval, [***] of the Scientific Advisory Committee.
If there is no Chief Executive Officer, the Board shall select such
[***] of the Scientific Advisory Committee by Supermajority Approval. The
Board shall have the right to terminate and replace such members of the
Scientific Advisory Committee by Supermajority Approval, with or without cause.
The Scientific Advisory Committee will meet at least twice each fiscal year. No
action shall be taken at any meeting of the Scientific
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Advisory Committee unless at least [***] Scientific Advisory Committee
representatives appointed by each of the Shareholders shall be present. The
Scientific Advisory Committee shall advise and assist the Board and the Officers
with respect to all aspects of the Research, including but not limited to the
preparation of the Annual Plan.
4.8 Company Equity Plan. At the first meeting of the Board pursuant to
Section 4.1(i) hereunder, the Board shall seek to establish an equity-based
incentive plan (the "Equity Plan"). The terms and conditions of the Equity Plan
shall be subject to approval by the Board by Supermajority Approval; provided,
however, that the Equity Plan shall provide that any awards granted to MSK
Directors, members of the Scientific Advisory Committee appointed by MSK or
other individuals appointed by MSK may be assigned to MSK and any awards
granted to Sequana Directors, members of the Scientific Advisory Committee
appointed by Sequana or other individuals appointed by Sequana may be assigned
to Sequana. Pursuant to the Equity Plan, the Board will initially reserve
300,000 shares of Class B Common Stock for the grant of awards to purchase
shares of Class B Common Stock under the Equity Plan. The number of shares of
Class B Common Stock reserved for issuance pursuant to the Equity Plan shall
represent 20% of the outstanding shares of Common Stock on a fully diluted
basis. Awards under the Equity Plan may be granted subject to Supermajority
Approval to employees of the Company who are hired within the first eighteen
months of the Company operations, members of the Board and members of the
Scientific Advisory Committee.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARTIES; INDEMNIFICATION
5.1 Representations and Warranties of Sequana. Sequana hereby
represents and warrants to MSK and the Company that:
(a) Organization and Good Standing of Sequana. Sequana is
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of California, and has the corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted except where the failure to be so existing and in good
standing or to have such power and authority would not have a material adverse
effect on Sequana.
(b) Authority, Approvals and Consents. Sequana has the
corporate power and authority to execute, deliver and perform this Agreement,
the Sequana License Agreement, the Sequana Services Agreement, and the Warrant
Agreement (collectively, the "Other Sequana Agreements") and to consummate the
transactions contemplated hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Other Sequana Agreements and the
consummation of the transactions contemplated hereby and
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thereby have been duly authorized and approved by the Board of Directors of
Sequana and no other corporate proceedings on the part of Sequana are necessary
to authorize and approve this Agreement and the Other Sequana Agreements and the
transactions contemplated hereby and thereby. This Agreement and the Other
Sequana Agreements have been duly executed and delivered by Sequana. Assuming
due authorization, execution and delivery by the other parties hereto and
thereto, this Agreement and the Other Sequana Agreements constitute valid and
binding obligations of Sequana, enforceable against Sequana in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies. The execution, delivery and performance of this Agreement and the
Other Sequana Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(i) contravene any provisions of the Certificate of
Incorporation or the By-Laws of Sequana;
(ii) to the knowledge of Sequana, (with or without
notice or lapse of time or both) result in a breach of any provision of, or
constitute a default (or an event which, with or without notice or lapse of time
or both, would constitute a default) under any contract, agreement, or any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
of any kind to which Sequana or any of its properties or assets is subject; or
(iii) violate or conflict with any statutes,
ordinances, laws, codes, rules, regulations, decrees, judgments or injunctions
applicable to Sequana or any of its properties or assets, except in the cases of
clauses (ii) and (iii) for such violations or conflicts which in the aggregate
would not have a material adverse effect (A) on Sequana or (B) on the ability
of Sequana to perform its obligations hereunder or thereunder.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not require any authorization,
consent, permit or approval of, or notice to, or filing with, any third party,
including, but not limited to, any governmental or regulatory authority other
than filings pursuant to the Exchange Act.
5.2 Representations and Warranties of MSK. MSK hereby represents
and warrants to Sequana and the Company that:
(a) Organization and Good Standing of MSK. MSK is duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of New York, and has the corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted except where the failure to be so existing and in good standing or to
have such power and authority would not have a material adverse effect on MSK.
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(b) Authority, Approvals and Consents. MSK has the corporate
power and authority to execute, deliver and perform this Agreement, the MSK
License Agreement, the MSK Services Agreement and the Warrant Agreement
(collectively, the "Other MSK Agreements") and to consummate the transactions
contemplated hereunder and thereunder. The execution, delivery and performance
of this Agreement and the Other MSK Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized and
approved by the Board of Directors of MSK and no other corporate proceedings on
the part of MSK are necessary to authorize and approve this Agreement and the
Other MSK Agreements and the transactions contemplated hereby and thereby. This
Agreement and the Other MSK Agreements have been duly executed and delivered by
MSK. Assuming due authorization, execution and delivery by the other parties
hereto and thereto, this Agreement and the Other MSK Agreements constitute valid
and binding obligations of MSK, enforceable against MSK in accordance with their
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by the principles governing the availability of equitable
remedies. The execution, delivery and performance of this Agreement and the
Other MSK Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(i) contravene any provisions of the Certificate of
Incorporation or the By-Laws of MSK;
(ii) to the knowledge of MSK, (with or without notice
or lapse of time or both) result in a breach of any provision of, or constitute
a default (or an event which, with or without notice or lapse of time or both,
would constitute a default) under any contract, agreement, or any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement, of any
kind to which MSK or any of its properties or assets is subject; or
(iii) violate or conflict with any statutes,
ordinances, laws, codes, rules, regulations, decrees, judgments or injunctions
applicable to MSK or any of its properties or assets, except in the cases of
clauses (ii) and (iii) for such violations or conflicts which in the aggregate
would not have a material adverse effect (A) on MSK or (B) on the ability of MSK
to perform its obligations hereunder or thereunder.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not require any authorization,
consent, permit or approval of, or notice to, or filing with, any third party,
including, but not limited to any governmental or regulatory authority.
5.3 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement (notwithstanding any investigation or
inquiry which any party hereto or any representative may have made) shall
survive the execution and delivery
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of this Agreement and continue until the dissolution of the Company in
accordance with Article IX hereof.
5.4 Indemnification of the Company by Sequana. Sequana shall
indemnify and hold the Company harmless from and against, and shall reimburse
the same for, all Losses which may be claimed or assessed against it, or to
which it may be subject, in connection with any and all claims, suits or
asserted Losses which arise from or are related to the inaccuracy or
incompleteness of any representation or warranty of Sequana contained in or made
pursuant to this Agreement.
5.5 Indemnification of the Company by MSK. MSK shall indemnify
and hold the Company harmless from and against, and shall reimburse the
same for, all Losses which may be claimed or assessed against it, or to which it
may be subject, in connection with any and all claims, suits or asserted Losses
which arise from or are related to the inaccuracy or incompleteness of any
representation or warranty of MSK contained in or made pursuant to this
Agreement.
5.6 Indemnification Procedure. In the event that the Company seeks
indemnification hereunder, the Company (the "Indemnified Party") agrees to
give the party that would be obligated to provide such indemnification (an
"Indemnifying Party") prompt written notice of any claim, assertion, event or
proceeding by or in respect of a third party of which it has knowledge
concerning any liability or damage as to which it may request indemnification
hereunder. The Indemnifying Party shall have the right to direct, through
counsel of its own choosing, the defense or settlement of any such claim or
proceeding at its own expense, which counsel shall be reasonably satisfactory to
the Indemnified Party. If the Indemnifying Party elects to assume the defense of
any such claim or proceeding, the Indemnified Party may participate in such
defense, but in such case the expenses of the Indemnified Party incurred in
connection with such participation shall be paid by the Indemnified Party;
provided, however, that the Indemnifying Party shall be responsible for such
expenses if the Indemnified Party reasonably concludes that counsel selected by
the Indemnifying Party has a conflict of interest. The Indemnified Party shall
cooperate with the Indemnifying Party in the defense or settlement of any such
claim, assertion, event or proceeding. If the Indemnifying Party elects not to
compromise or defend such claim or proceeding or contests its obligation to
indemnify hereunder, the Indemnified Party hereof may pay, compromise or defend
such claim or proceeding at the Indemnifying Party's expense. Notwithstanding
the foregoing, neither the Indemnifying Party nor the Indemnified Party may
settle or compromise any claim over the objection of the other; provided,
however, that consent to settlement or compromise shall not be unreasonably
delayed or withheld.
ARTICLE VI
AGREEMENTS OF THE PARTIES
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6.1 Other Business Activities; Exculpation. (a) Each of the
Shareholders understands that the other Shareholder or its respective
Affiliates and Related Parties (collectively, the "Permitted Persons") may be
interested or involved, directly or indirectly, in various businesses and
undertakings other than the Company. Each Shareholder also understands and
agrees that the conduct of the business of the Company may involve business
dealings with such other businesses or undertakings. Without limiting the
generality of the foregoing and subject to the terms and conditions of this
Agreement and the License Agreements, the Shareholders hereby agree that the
creation of the Company and the assumption by each of the Shareholders of their
duties under this Agreement and under the License Agreements and Service
Agreements shall be without prejudice to their rights (or the rights of their
Affiliates) to have such other interests and activities and to receive and enjoy
profits or compensation therefrom, and each Shareholder waives any rights it
might otherwise have to share or participate in such other interest or
activities of the other Shareholder or its Affiliates. Subject to the terms and
conditions of this Agreement and the License Agreements, no Shareholder shall
have any obligation to present any business opportunity to the Company, even if
the opportunity is one that the Company might reasonably be deemed to have
pursued or had the ability or desire to pursue, in each case, if granted the
opportunity to do so, and no Shareholder shall be liable to the Company or any
Shareholder (or any Affiliate thereof) for breach of any fiduciary or other
duty, as a member or otherwise, by reason of the fact that a Permitted Person
pursues or acquires such business opportunity, directs such business opportunity
to another Person or fails to present such business opportunity, or information
regarding such business opportunity, to the Company.
(b) Each Shareholder, through its representatives on the
Board, shall be entitled to manage the business and affairs of the Company in
the manner it believes in its sole discretion is appropriate, and shall be
entitled to cause its representatives on the Board to vote for or against any
matter submitted to a vote pursuant to Section 4.4 or any other provision of
this Agreement, Delaware law, the Certificate of Incorporation or the By-laws,
in the interests of such Shareholder in its sole discretion, even if such
conduct is not in the interest of the other Shareholder, or the Company as a
whole. No Shareholder nor any Affiliate, stockholder, officer, director,
employee or agent, including any representative on the Board, of any
Shareholder, shall be liable to the Company, or any other Shareholder or any
Affiliate of Sequana or MSK for any breach of any alleged duty to the Company or
any other Shareholder in connection with the management of the business and
affairs of the Company, or the exercise of any voting rights on the Board,
except to the extent such a breach is found to have occurred and involved any
act or omission which involves gross negligence, a knowing violation of the law,
or, in the case of an individual only, any improper personal benefit.
6.2 Company Rights of First Negotiation.
(a) In the event that Sequana identifies any opportunity
with respect to the use of [***] (a "Sequana Opportunity"), before exploiting
such opportunity, Sequana shall first send the Company and the Board written
notice of such opportunity, setting forth in such notice all of the details of
the Sequana Opportunity. The Company shall have thirty (30) business days after
the receipt of such notice to notify Sequana of its desire to enter into an
agreement with Sequana with respect to the Sequana Opportunity In the event
that the Company so exercises its right of first negotiation, the Company and
Sequana agree to negotiate in good faith for a period of 45 business days to
enter into an agreement with the Company with respect to the subject of the
Sequana Opportunity. In the event that the Company does not respond within
thirty (30) business days or rejects the opportunity to negotiate with Sequana
with respect to such Sequana Opportunity or negotiates with Sequana but the
parties are unable to reach an agreement after such 45 business day period,
Sequana shall be free to exploit such Sequana Opportunity in any manner.
(b) In the event that MSK identifies any opportunity to
enter into a [***] with respect to the use of [***] (an "MSK Opportunity"),
before exploiting such opportunity, MSK shall first send the Company and the
Board written notice of such opportunity, setting forth in such notice all of
the details of the MSK Opportunity. The Company shall have thirty (30) business
days after the receipt of such notice to notify MSK of its desire to enter into
an agreement with MSK with respect to the MSK Opportunity. In the event that
the Company so exercises its right to first negotiation, the Company and MSK
agree to negotiate in good faith for a period of 45 business days to enter into
an agreement with the Company with respect to the subject of the MSK
Opportunity. In the event that the Company does not respond within thirty (30)
business days or rejects the opportunity to negotiate with MSK with respect to
such MSK Opportunity or negotiates with MSK but the parties are unable to reach
an agreement after such 45 business day period, MSK shall be free to exploit
such MSK Opportunity in any manner.
3. Sequana Right of First Negotiation. In the event that
the Company desires to enter into an agreement with respect to the commercial
development by any party other than Sequana of *** (a "Company Opportunity"),
the Company shall give Sequana written notice of such desire. Sequana shall have
thirty (30) business days after the receipt of such notice to notify the Company
of its desire to enter into an agreement with the Company with respect to the
Company Opportunity. In the event that Sequana so exercises its right of first
negotiation, the Company and Sequana agree to negotiate in good faith for a
period of 45 business days to enter into an agreement with respect to the
subject of the Company Opportunity. In the event that Sequana does not respond
within thirty (30) business days or rejects the opportunity to negotiate with
the Company with respect to such Company Opportunity or negotiates with the
Company but the parties are unable to reach an agreement after such 45 business
day period the Company shall be free to exploit such Company Opportunity in any
manner.
4. Rights of the Company. The Company will own all
biological materials, information, ideas, data, know-how, inventions,
discoveries, methods, techniques, software, works of authorship and technology
and results developed by or specifically on behalf of the Company, including
without limitation any gene, genes or gene sequence information, whether or not
patentable, all diagnostic, prognostic, and therapeutic applications resulting
therefrom and all patents, patent applications, trade secrets, know-how,
copyrights and other proprietary rights arising therefrom or appurtenant
thereto, whether or not in the Field ("Results") that are made, created or
discovered independently by employees of the Company as a result of the
Research, consultants or employees of Sequana or MSK specifically contracted to
work on the Research in connection with the parties' respective Services
pursuant to the Services Agreements. The Company will not license to MSK,
Sequana or any third party such Results or any improvement or discovery which
depends on such Results, without Supermajority Approval.
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[***]
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[***]
6.5 Interested Party Transactions. Provided that any Interested
Party Transaction is approved by Supermajority Vote as specified in Section
4.4(p) hereof, each of the Shareholders acknowledges and agrees that the Company
may enter into agreements or engage in material transactions with the
Shareholders or their respective Affiliates.
6.6 Confidentiality. Neither Shareholder shall during the period
such Shareholder is a shareholder of the Company and at any time after such
Shareholder has ceased to be a Shareholder, willfully disclose any confidential
or proprietary information with respect to the Company, including, but not
limited to, any confidential information relating to the Research or contained
in the Results, to any Person, except (i) with the prior written consent of the
other Shareholder; (ii) to the extent necessary to comply with law or the valid
order of a court of competent jurisdiction, or requirements of not-for-profit,
governmental or quasi-governmental organizations in which event the party making
such disclosure shall so notify the other Shareholder as promptly as practicable
(and, if possible, prior to making such disclosure) and shall seek confidential
treatment of such information; (iii) as part of its normal reporting or review
procedure to its parent company, if any, its partners, its auditors, its
attorneys and other representatives or to any not-for-profit, governmental or
quasi-governmental organization to which such Shareholder is subject; provided,
that, such Shareholder shall be responsible for the compliance of its parent
company, if any, its partners, auditors, attorneys and representatives and such
other entities, with the provisions of this Section 6.6; (iv) in connection with
the enforcement of such Shareholder's rights hereunder; and (v) with respect to
disclosures to an affiliate of, or professional advisor to, such Shareholder in
connection with the performance by such Shareholder of its obligations hereunder
(provided, that, such Shareholder shall be responsible for the compliance of its
affiliates or professional advisors with the provisions of this Section 6.6).
Except as provided in the immediately preceding sentence, no Shareholder, nor
any of its Affiliates, shall, during the periods referred to therein, use any
confidential or proprietary information with respect to the Company.
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6.7 Consents and Approvals. Each of the Shareholders agrees to use its
reasonable best efforts to assist the Company in obtaining as promptly as
practicable all consents, authorizations, approvals and waivers from any
governmental or regulatory authority required to be obtained by the Company in
order to operate the Company's business in accordance with any Annual Plan then
in effect, including, without limitation, assisting the Company in making any
required filings, submissions and notifications with any governmental or
regulatory authority. Each of the Shareholders will furnish to the Company such
necessary information and reasonable assistance as the Company may reasonably
request in connection with the foregoing.
ARTICLE VII
SHAREHOLDER REPORTS
7.1 Independent Auditors. The books of account and records of the Company
shall be audited as of the end of each Fiscal Year by Ernst & Young LLP or such
other nationally recognized accounting firm as shall have been selected by the
Supermajority Approval pursuant to Section 4.4.
7.2 Reports to Shareholders.
(a) Within ninety (90) days after the end of each Fiscal
Year, the Company shall cause to be prepared and mailed to each Shareholder a
financial report setting forth:
(i) a balance sheet of the Company dated as of the last day of
each such Fiscal Year;
(ii) an income statement of the Company for such Fiscal Year;
(iii) all other financial statements of the Company for such
Fiscal Year required to be prepared in accordance with GAAP;
(iv) footnote disclosure for the financial statements described
in clauses (i), (ii) and (iii) hereof, in each case, as required to be
prepared in accordance with GAAP;
(v) an audit opinion of the Company's independent auditors
relating to the financial statements described in clauses (i), (ii),
(iii) and (iv) hereof; and
(b) Within forty-five (45) days after the end of each
quarter thereof and within fifteen (15) days after the end of each calendar
month, the Company shall cause to be prepared and mailed to each Shareholder a
financial report setting forth:
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(i) a balance sheet of the Company dated as of the last day of
each such quarter or month, as the case may be;
(ii) an income statement of the Company for such quarter or month
and the portion of the Fiscal Year ending with such quarter or month,
as the case may be; and
(iii) such other reports as the Board may require.
(c) Each financial report delivered to the Shareholders
pursuant to Sections 7.2(a) and (b) hereof shall (i) be prepared in accordance
with GAAP consistently applied, and (ii) include comparisons with the
corresponding amounts (A) set forth in the Annual Plan for the corresponding
period and (B) for the corresponding period of the immediately prior Fiscal
Year.
ARTICLE VIII
ADMISSION OF NEW SHAREHOLDERS;
TRANSFER OF INTERESTS
8.1 Issuance of Shares. No equity security of the Company shall be issued
to any Person without Supermajority Approval to the extent provided in Section
4.4.
8.2 Transfer of Shares.
(a) Neither Sequana nor MSK shall sell, transfer, or
otherwise dispose of ("Transfer") any shares of Common Stock beneficially owned
by such Shareholder to a third party without Supermajority Approval pursuant to
Section 4.4; provided, however that (i) Sequana may Transfer such interests to a
subsidiary of Sequana that is and remains wholly owned by Sequana and that
becomes a party hereto and (ii) MSK may transfer up to 60,000 shares to Lazard
Freres & Co. pursuant to an agreement providing that MSK shall exercise all of
the rights of Lazard Freres & Co. and such shares shall remain subject to all
restrictions on transfer under this Agreement, provided, that, such transfer
agreement shall be subject to Sequana's approval, which such approval shall not
be unreasonably withheld.
(b) Each certificate for Class A Common Stock of the Company
shall contain substantially the following legends:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
OF AND RESTRICTIONS ON TRANSFER SET FORTH IN A JOINT VENTURE AGREEMENT
ENTERED INTO AMONG SEQUANA THERAPEUTICS, INC., MEMORIAL XXXXX-XXXXXXXXX
CANCER CENTER AND GENOS BIOSCIENCES, INC., DATED AS OF
25
30
JANUARY 29, 1997 (THE "JOINT VENTURE"), COPIES OF WHICH ARE ON FILE
WITH THE SECRETARY OF THE JOINT VENTURE AND ARE HELD AND MAY BE SOLD,
ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE
THEREWITH.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR THE SECURITIES
LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF EFFECTIVE
REGISTRATION STATEMENTS COVERING SUCH SECURITIES UNDER THE 1933 ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) Any purported Transfer of a Shareholder's interest in
the Company in violation of this Section 8.2 shall be void and of no effect.
8.3 Sequana Change of Control. A Sequana Change of Control shall not be
deemed to be a Transfer by Sequana of its interest in the Company; provided that
Sequana, or its successor(s) by operation of law, shall remain a party to this
Agreement and the Other Sequana Agreements and be bound by the terms hereof and
thereof.
ARTICLE IX
TERMINATION OF THE AGREEMENT
9.1 Termination Events. This Agreement may be terminated and the Company
may be dissolved, subject to Section 9.7, upon the occurrence of any of the
following events (collectively, "Termination Events"):
(a) the Board unanimously votes for the termination of the
Agreement pursuant to Section 4.4;
(b) by either Shareholder in the event of a Deadlock
pursuant to Section 4.5;
(c) by MSK, upon a material violation or breach by Sequana
of a material provision of this Agreement, the Sequana License Agreement or the
Sequana Services Agreement and such violation or breach has not been waived by
MSK and such breach remains uncorrected for a period of ninety (90) days after
receipt by Sequana of a written
26
31
notice specifying the provision that has been breached and the details
surrounding such breach;
(d) by Sequana, upon a material violation or breach by MSK
of a material provision of this Agreement, the MSK License Agreement or the MSK
Services Agreement and such violation or breach has not been waived by Sequana;
and such breach remains uncorrected for a period of ninety (90) days after
receipt by MSK of a written notice specifying the provision that has been
breached and the details surrounding such breach;
(e) by MSK, in the event of a Sequana Change of Control
which results in a Person controlling Sequana that has not been approved by
MSK; provided that MSK's approval of such Person shall not be unreasonably
withheld or delayed and provided further that MSK shall not be entitled to
terminate this Agreement pursuant to this clause (e) in the event that the
Person controlling Sequana following a Sequana Change of Control is engaged in
the health care or pharmaceutical business unless MSK, in its reasonable
judgment believes that an affiliation by MSK with such Person would jeopardize
MSK's scientific or ethical principles, MSK's not-for-profit charter or MSK's
relationships with regulatory agencies;
(f) by MSK upon the occurrence of an Insolvency Event of
Sequana;
(g) by Sequana upon the occurrence of an Insolvency Event of
MSK;
(h) by either Shareholder, in the event that (a) the
Company has expended (i) the Initial Contributions and (ii) any required
investments by the Shareholders pursuant to Section 3.3(a) hereof and (iii)
additional investments from each Shareholder, if any, required pursuant to
Section 3.3(b) hereof and (b) the Scientific Advisory Committee has certified
to the Board that no gene discovery has been made; and
(i) by either Shareholder in the event of the termination
of the Sequana License Agreement or the MSK License Agreement in accordance
with the terms thereof.
9.2 Events Upon Termination of the Agreement. In the event of a
Termination Event, written notice thereof shall forthwith be given to the other
party or parties hereto and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein:
(a) the License Agreements shall terminate;
(b) the Service Agreements shall terminate;
27
32
(c) if a Termination Event referred to in Sections 9.1(a),
9.1(d) or 9.1(g) has occurred, the Warrant Agreement shall terminate and the
warrant granted thereunder shall be cancelled;
(d) the assets of the Company, other than the Results, shall
be distributed in accordance with Section 9.3;
(e) subject to Section 9.7, the Results shall be conveyed to
the Intellectual Property Holding Company; and
(f) Section 9.8 hereof (and the Sections referred to
therein) shall survive.
9.3 Distribution Upon Termination of the Agreement. Subject to
Section 9.7, upon termination of this Agreement, the Company may be
dissolved and, the Shareholders acting together shall proceed, subject to the
provisions herein, to liquidate the Company and apply the proceeds in such
liquidation, or in their sole discretion to distribute Company assets, in the
following order of priority:
(a) First, to the payment of debts and liabilities of the
Company (other than any loans or advances that may have been made by any
of the Shareholders to the Company) and the expenses of liquidation;
(b) Second, to the repayment of any loans, advances or
capital contributions made by any of the Shareholders including any
amounts then due under the MSK Services Agreement and the Sequana
Services Agreement; and
(c) Third, the remaining assets shall be paid to each
Shareholder in proportion to their relative equity interests in the
Company.
9.4 Distributions in Cash or in Kind. Upon termination of this
Agreement, the Shareholders, their successors or other representatives may
in their sole discretion (a) liquidate all or a portion of the Company assets
(other than the Results) and apply the proceeds of such liquidation as set forth
in Section 9.3 hereof or (b) determine the value of any Company assets not sold
or otherwise disposed of (including, if they so determine, hiring an appraiser,
in which event the cost of such appraisal shall be considered a debt of the
Company) and distribute such assets to the Shareholders at such determined
value; provided, however, that no Shareholder shall have any non-cash assets
distributed to them without such Shareholder's consent.
9.5 Time for Liquidation. A reasonable time period shall be
allowed for the orderly liquidation of the assets of the Company and the
discharge of liabilities to creditors so as to enable the Shareholders to
minimize the losses attendant upon such liquidation.
28
33
9.6 Shareholders Not Personally Liable for Return of Capital
Contributions. Neither of the Shareholders or any of their respective
Affiliates shall be personally liable for the return of the capital
contributions made pursuant to Section 3.3 or otherwise of any Shareholder and
such return shall be made solely from available Company assets, if any, and each
Shareholder hereby waives any and all claims it may have against the other
Shareholder in this regard.
9.7 Ownership of Results. Upon termination of this Agreement, the
Shareholders shall form a new entity (the "Intellectual Property Holding
Company") to own and license the Results, which Intellectual Property Holding
Company shall be owned by the Shareholders, provided, however, that the
Stockholders may agree to maintain the corporate existence of the Company to own
and license the Results, and distribute all of the assets of the Company (other
than the Results) in accordance with Section 9.3.
9.8 Survival of Termination. Sections 5.4, 5.5, 5.6, 6.4 (subject
to 9.7), 6.6 and 9.7 shall survive the termination of this Agreement pursuant to
this Article IX.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendments. This Agreement may be modified or amended only
by an instrument in writing signed by each of MSK and Sequana.
10.2 Notices. Any notice, request, consent or communication
collectively a "Notice") under this Agreement shall be effective only if
it is in writing and (i) personally delivered, (ii) sent by certified or
registered mail, return receipt requested, postage prepaid (iii) sent by a
nationally recognized overnight delivery service, with delivery confirmed, or
(iv) telexed or telecopied, with receipt confirmed, addressed as follows:
(a) if to the Company, to
Genos Biosciences, Inc.
00000 X. Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx Xxxxx, XX 00000
Attention: Chief Executive Officer
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34
(b) if to Sequana, to
Sequana Therapeutics, Inc.
00000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(c) if to MSK, to
Memorial Xxxxx-Xxxxxxxxx Cancer Center
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Ph.D.
Facsimile: (000) 000-0000
with a copy to
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Vlahakas
Facsimile: (000) 000-0000
A Notice shall be deemed to have been given as of (i) the date when personally
delivered, (ii) three (3) days after deposited with the United States certified
or registered mail, properly addressed, return receipt requested, postage
prepaid, (iii) the next day when delivered during business hours to said
overnight delivery service properly addressed, or (iv) confirmation of receipt
of the telex or telecopy, as the case may be, unless the sending party has
actual knowledge that a Notice was not received by the intended recipient. All
Notices shall specifically state: (i) the provision (or provisions) of this
Agreement with respect to which such Notice is given, and (ii) the relevant time
period, if any, in which the party receiving such Notice must respond.
30
35
The addresses set forth above may be changed by any party upon
furnishing to the other party a notice of change of address in accordance with
the terms of this paragraph.
10.3 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered an original.
10.4 Table of Contents and Headings. The table of contents and
the headings of the sections of this Agreement are inserted for convenience
only and shall not be deemed to constitute a part hereof.
10.5 Successors and Assigns. Except as otherwise permitted
herein, no Shareholder may assign its rights hereunder, whether by operation of
law or otherwise, without the prior written consent of the other Shareholder.
This Agreement shall inure to the benefit of and be binding upon the parties and
to their respective heirs, executors, administrators, successors and permitted
assigns.
10.6 Severability. Every provision of this Agreement is intended
to be severable. If any term or provision hereof is illegal or invalid for
any reason whatsoever such term or provision will be enforced to the maximum
extent permitted by law and, in any event, such illegality or invalidity shall
not affect the validity of the remainder of the Agreement.
10.7 Non-Waiver. No provision of this Agreement shall be deemed
to have been waived except if the giving of such waiver is contained in a
written notice given to the party claiming such waiver and no such waiver shall
be deemed to be a waiver of any other or further obligation or liability of the
party or parties in whose favor the waiver was given.
10.8 Applicable Law. This Agreement and the rights and
obligations of the parties hereto shall be interpreted and enforced in
accordance with and governed by the laws of the State of Delaware without regard
to the conflicts of laws principles thereof.
10.9 Entirety of Agreement. This Agreement, the License
Agreements, the Services Agreements and the Warrant Agreement constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and supersede all prior agreements, understandings, offers and
negotiations oral or written.
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36
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the day and year first above written.
SEQUANA THERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President & Chief Executive
MEMORIAL XXXXX-XXXXXXXXX CANCER
CENTER
By:
-----------------------------------
Name:
Title:
GENOS BIOSCIENCES, INC.
By: /s/ N.C. Dracopoli
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Vice President, Research Director
37
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the day and year first above written.
SEQUANA THERAPEUTICS, INC.
By:
-----------------------------------
Name:
Title:
MEMORIAL XXXXX-XXXXXXXXX CANCER
CENTER
By: /s/ XXXX X. XXXX
-----------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
GENOS BIOSCIENCES, INC.
By:
-----------------------------------
Name:
Title:
38
BY-LAWS
OF
GENOS BIOSCIENCES, INC.
39
TABLE OF CONTENTS
page
----
ARTICLE I
OFFICES........................................................................................... 5
Section 1. Registered Office............................................................ 5
Section 2. Other Offices................................................................ 5
ARTICLE II
MEETINGS OF STOCKHOLDERS.......................................................................... 5
Section 1. Place of Meetings............................................................ 5
Section 2. Annual Meetings.............................................................. 6
Section 3. Special Meetings............................................................. 6
Section 4. Quorum....................................................................... 7
Section 5. Voting....................................................................... 7
Section 6. Consent of Stockholders in Lieu of Meeting................................... 8
Section 7. List of Stockholders Entitled to Vote........................................ 8
Section 8. Stock Ledger................................................................. 9
ARTICLE III
DIRECTORS......................................................................................... 9
Section 1. Number and Election of Directors............................................. 9
Section 2. Vacancies.................................................................... 10
Section 3. Duties and Powers............................................................ 10
Section 4. Meetings..................................................................... 14
Section 5. Quorum....................................................................... 15
Section 6. Actions of Board............................................................. 16
Section 7. Meetings by Means of Conference Telephone.................................... 16
Section 8. Committees................................................................... 16
Section 9. Compensation................................................................. 18
Section 10. Interested Directors........................................................ 18
ARTICLE IV
OFFICERS.......................................................................................... 19
Section 1. General...................................................................... 19
Section 2. Election..................................................................... 20
Section 3. Voting Securities Owned by the Corporation................................... 20
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40
Section 4. Chairman of the Board of Directors........................................... 21
Section 5. Chief Executive Officer...................................................... 21
Section 6. Vice Presidents.............................................................. 22
Section 7. Secretary.................................................................... 23
Section 8. Treasurer.................................................................... 24
Section 9. Assistant Secretaries........................................................ 24
Section 10. Assistant Treasurers........................................................ 25
Section 11. Other Officers.............................................................. 25
ARTICLE V
STOCK............................................................................................. 26
Section 1. Form of Certificates......................................................... 26
Section 2. Signatures................................................................... 26
Section 3. Lost Certificates............................................................ 26
Section 4. Transfers.................................................................... 27
Section 5. Record Date.................................................................. 27
Section 6. Beneficial Owners............................................................ 28
ARTICLE VI
NOTICES........................................................................................... 28
Section 1. Notices...................................................................... 28
Section 2. Waivers of Notice............................................................ 29
ARTICLE VII
GENERAL PROVISIONS................................................................................ 29
Section 1. Dividends.................................................................... 29
Section 2. Disbursements................................................................ 30
Section 3. Fiscal Year.................................................................. 30
Section 4. Corporate Seal............................................................... 30
ARTICLE VIII
INDEMNIFICATION................................................................................... 31
Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than Those
by or in the Right of the Corporation........................................... 31
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation........................................................ 32
Section 3. Authorization of Indemnification............................................. 33
Section 4. Good Faith Defined........................................................... 33
Section 5. Indemnification by a Court................................................... 34
Section 6. Expenses Payable in Advance.................................................. 35
3
41
Section 7. Nonexclusivity of Indemnification and Advancement of Expenses................ 35
Section 8. Insurance.................................................................... 36
Section 9. Certain Definitions.......................................................... 37
Section 10. Survival of Indemnification and Advancement of Expenses..................... 38
Section 11. Limitation on Indemnification............................................... 38
Section 12. Indemnification of Employees and Agents..................................... 38
ARTICLE IX
AMENDMENTS........................................................................................ 39
Section 1. Amendments................................................................... 39
Section 2. Entire Board of Directors.................................................... 39
4
42
BY-LAWS
OF
GENOS BIOSCIENCES, INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State
of Delaware.
Section 2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of Delaware
as the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders
for the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
5
43
Section 2. Annual Meetings. The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting, at which meetings the stockholders shall elect by a plurality
vote a Board of Directors, and transact such other business as may properly be
brought before the meeting. Written notice of the Annual Meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than ten nor more than sixty days before the
date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by
law or by the Certificate of Incorporation, Special Meetings of
Stockholders, for any purpose or purposes, may be called by the Chief Executive
Officer, and shall be called by the Chief Executive Officer or the Secretary at
the request in writing of a majority of the Board of Directors or at the request
in writing of stockholders owning a majority of the capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. Written notice of a
Special Meeting stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called shall be given not less than ten nor
more than sixty days before the date of the meeting to each stockholder entitled
to vote at such meeting.
6
44
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation, these By-Laws or the Joint Venture Agreement (the "Joint Venture
Agreement"), dated as of January 29, 1997, among the Corporation, Sequana
Therapeutics, Inc. ("Sequana") and Memorial Xxxxx-Xxxxxxxxx Cancer Center
("MSK"), any question brought before any meeting of stockholders shall be
decided by the vote of the holders of a majority of the stock represented and
entitled to vote
7
45
thereat. Each stockholder represented at a meeting of stockholders shall be
entitled to cast one vote for each share of the capital stock entitled to vote
thereat held by such stockholder. Such votes may be cast in person or by proxy
but no proxy shall be voted on or after three years from its date, unless such
proxy provides for a longer period. The Board of Directors, in its discretion,
or the officer of the Corporation presiding at a meeting of stockholders, in his
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 6. Consent of Stockholders in Lieu of Meeting. Unless otherwise
required by law, the Certificate of Incorporation, these Bylaws or the Joint
Venture Agreement any action required or permitted to be taken at any Annual or
Special Meeting of Stockholders of the Corporation, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
Section 7. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and
8
46
make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
Section 8. Stock Ledger. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 7 of this Article II or the books of the
Corporation, to vote in person or by proxy at any meeting of stockholders or to
consent in writing to any action of stockholders taken without a meeting.
ARTICLE IIII
DIRECTORS
Section 1. Number and Election of Directors. Subject to ss.3
of this Article III, the Board of Directors initially shall consist of six
(6) members, provided
9
47
that such number may be increased to ten (10) as provided in ss. 3 of this
Article III. Except as provided in Section 2 of this Article, directors
shall be elected by a plurality of the votes cast at Annual Meetings of
Stockholders, and each director so elected shall hold office until the next
Annual Meeting and until his successor is duly elected and qualified, or until
his earlier resignation or removal. Any director may resign at any time upon
notice to the Corporation. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created
directorships resulting from any increase in the authorized number of
directors or from the resignation or removal of any director(s) may be filled by
a majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
next annual election and until their successors are duly elected and qualified,
or until their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation
shall be managed by or under the direction of the Board of Directors which
may exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws directed or required to be exercised or done by the stockholders.
10
48
The aforesaid powers of the Board shall include, but shall in
no way be limited to, the power to authorize and approve the following specific
actions, and such specific actions (a) shall be within the province of the Board
as prescribed by law, the Certificate of Incorporation or these By-laws, and
shall not be delegated to any officer, employee or agent of the Corporation and
(b) shall require supermajority approval ("Supermajority Approval") by one of
the following methods: (i) by unanimous vote of the Sequana Directors (as
defined in the Joint Venture Agreement) and MSK Directors (as defined in the
Joint Venture Agreement) present at a duly held meeting, (ii) by the unanimous
written consent of all the members of the Board of Directors (at a time when
there is no more than one vacancy among the Sequana Directors or the MSK
Directors, respectively) or (iii) (A) by the majority vote of the Board of
Directors at a duly held meeting of the Board of Directors, (B) by written
consent of Sequana and (C) by written consent of MSK:
i) the approval of any amendments or modifications to
the 1997 Annual Plan (as defined in the Joint Venture Agreement), and the
approval of the Annual Plan (as defined in the Joint Venture Agreement) of the
Company or any amendments or modifications thereto for all years after the
fiscal year ending December 31, 1997;
(ii) the approval of the Business Plan (as defined in
the Joint Venture Agreement) or any amendments or modifications thereto;
11
49
(iii) the incurrence by the Corporation of indebtedness
not provided for in the Annual Plan in excess of [***] in the aggregate in
any fiscal year;
(iv) the filing of an IND (as defined in the Joint
Venture Agreement), NDA (as defined in the Joint Venture Agreement), patent
application or other application or filing with any U.S. or foreign regulatory
agency;
(v) the approval or implementation of any commercial
application of Results (as defined in the Joint Venture Agreement);
(vi) entering into any license agreement, or other
material third party contract;
(vii) the appointment and removal of and the approval
of compensation for members of Senior Management (as defined in the Joint
Venture Agreement) of the Corporation;
(viii) the approval of compensation for the members of
the Scientific Advisory Committee (as defined in the Joint Venture Agreement);
(ix) the approval of capital expenditures not provided
for in the Annual Plan in excess of [***] in the aggregate during any fiscal
year;
(x) the acquisition or disposition of property or
assets of the Corporation not provided for in the Annual Plan in excess of
[***] in the aggregate in any fiscal year;
12
*** CONFIDENTIAL TREATMENT REQUESTED
50
(xi) the amendment of the Joint Venture Agreement, the
Certificate of Incorporation, these By-laws, the License Agreements (as
defined in the Joint Venture Agreement), the Services Agreements (as defined in
the Joint Venture Agreement), or any other agreement between the Corporation and
either Sequana or MSK;
(xii) the reorganization of the Corporation in another
form or jurisdiction;
(xiii) the sale, transfer or issuance of any equity
securities of the Corporation to any Person (as defined in the Joint
Venture Agreement, other than pursuant to Section 3.3(a) of the Joint Venture
Agreement);
(xiv) the dissolution, liquidation, merger,
consolidation, business combination or other similar transaction involving the
Company (as defined in the Joint Venture Agreement);
(xv) the approval of dividends or other distributions
not provided for in the Annual Plan;
(xvi) the approval of any Interested Party Transaction
(as defined in the Joint Venture Agreement) with any of Sequana, MSK or their
respective Affiliates (as defined in the Joint Venture Agreement);
(xvii) the ratification of the Chief Executive
Officer's appointment of members of the Scientific Advisory Committee or,
if there is no
13
51
Chief Executive Officer, the appointment of such members, and the removal of
members of the Scientific Advisory Board pursuant to Section 4.7 of the Joint
Venture Agreement;
(xviii) the replacement of the independent auditors of
the Company; and
(xix) increasing the size of the Board of Directors
pursuant to Section 4.1(b), (c) or (d) of the Joint Venture Agreement or
selecting the Chairman pursuant to Section 4.1(d) of the Joint Venture
Agreement.
Section 4. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the
State of Delaware. Regular meetings of the Board of Directors shall be held each
fiscal quarter, at such time and at such place as may from time to time be
determined by the Board of Directors. Special meetings of the Board of Directors
may be called by the Chief Executive Officer or any director. Each director
shall be given at least ten (10) business days notice of any meeting of the
Board of Directors which notice shall contain the time and place of such
meeting, and shall specify to a reasonable degree, the purpose of such meeting;
provided that such notice to any director may be waived by such director either
before or after the meeting.
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Section 5. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these By-Laws, at all
meetings of the Board of Directors, a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the entire Board of Directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors; provided, however, that
no action shall be taken at any meeting of the Board of Directors, except for
the adjournment of such meeting, unless at least four directors, consisting of
two MSK Directors and two Sequana Directors, shall be present, and provided
further that three (3) directors shall constitute a quorum for any determination
to cause the Corporation to (x) seek indemnification pursuant to Sections 5.4 or
5.5 of the Joint Venture Agreement, (y) exercise the rights of first negotiation
set forth in Sections 6.2(a) and 6.2(b) of the Joint Venture Agreement or (z)
seek to enforce the Corporation's rights under the License Agreements (as
defined in the Joint Venture Agreement) or the Services Agreement (as defined in
the Joint Venture Agreement). If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
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Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or committee, but the failure to file such writing or
writings shall not affect the validity or effectiveness of such consent.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws,
members of the Board of Directors of the Corporation, or any committee
designated by the Board of Directors, may participate in a meeting of the Board
of Directors or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 7 shall constitute presence in person at such meeting.
Section 8. Committees. The Board of Directors may designate
one or more committees, each committee to consist of at least one MSK
Director and one Sequana Director (as such terms are defined in the Joint
Venture Agreement). The Board of Directors may designate one or more directors
as alternate members
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of any committee, who may replace any absent or disqualified member at any
meeting of any such committee; provided, that any action of a committee may only
be taken (whether by vote or by written consent) if such committee consists of
at least one MSK Director and one Sequana Director. In the absence or
disqualification of a member of a committee, and in the absence of a designation
by the Board of Directors of an alternate member to replace the absent or
disqualified member, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member; provided, that any
action of a committee may only be taken (whether by vote or by written consent)
if such committee consists of at least one MSK Director and one Sequana
Director. Any committee, to the extent allowed by law and provided in the
resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Notwithstanding anything to the contrary
contained herein, no committee shall have the power and authority, or be
delegated the power and authority, to take any of the actions which require the
Supermajority Approval pursuant to ss. 3 of Article III hereof. Each committee
shall keep regular minutes and report to the Board of Directors when required.
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Section 9. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors.
No such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Directors who are not also
officers or employees of the Corporation may be paid a fixed sum for attendance
at each meeting of the Board of Directors or a stated salary as director.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 10. Interested Directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association, or
other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or
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their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a Chief Executive Officer, a
Secretary and a Treasurer. Subject to Article 4 of this Article 4, the Board of
Directors may also choose a Chairman of the Board of Directors and one or more
Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers.
Any number of offices may be held by the same person, unless otherwise
prohibited by law, the Certificate of Incorporation or these By-Laws. The
officers of the Corporation need not be stockholders of the Corporation nor need
such officers be directors of the Corpor-
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ation. The salaries of all officers of
the Corporation shall be fixed by the Board of Directors.
Section 2. Election. The Board of Directors at its first
meeting held after each Annual Meeting of Stockholders shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier resignation or removal. Any officer elected by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the Corporation
shall be filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation.
Powers of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed
in the name of and on behalf of the Corporation by the Chief Executive Officer
or any Vice President and any such officer may, in the name of and on behalf of
the Corporation, take all such action as any such officer may deem advisable to
vote in person or by proxy at any meeting of security holders of any corporation
in which the Corporation may own securities and at any such meeting shall
possess and may exercise any and all rights
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and power incident to the ownership of such securities and which, as the owner
thereof, the Corporation might have exercised and possessed if present. The
Board of Directors may, by resolution, from time to time confer like powers upon
any other person or persons.
Section 4. Chairman of the Board of Directors. Pursuant to
Section 4.1(d) of the Joint Venture Agreement, if the Board of Directors so
determine by the vote specified in Section 4.4 of the Joint Venture Agreement,
the Chairman shall preside at all meetings of the stockholders and of the Board
of Directors and either: (i) shall be the Chief Executive Officer, or (ii) the
shareholders shall increase membership on the Board of Directors by one (1), and
the Chairman shall be an Independent Director (as defined in the Joint Venture
Agreement). The Chairman of the Board of Directors shall also perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-Laws or by the Board of Directors.
Section 5. Chief Executive Officer. The Chief Executive
Officer shall, subject to the control of the Board of Directors, have
general supervision of the business of the Corporation and shall see that all
orders and resolutions of the Board of Directors are carried into effect. He
shall execute all bonds, mortgages, contracts and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise
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signed and executed and except that the other officers of the Corporation may
sign and execute documents when so authorized by these By-Laws, the Board
of Directors or the Chief Executive Officer. The Chief Executive Officer shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by these By-Laws or by the Board of Directors.
Pursuant to Section 4.1(b) and (d) of the Joint Venture Agreement, the Chief
Executive Officer may be elected to the Board of Directors and may be the
Chairman.
Section 6. Vice Presidents. At the request of the Chief
Executive Officer or in his absence or in the event of his inability or
refusal to act, the Vice President or the Vice Presidents if there is more than
one (in the order designated by the Board of Directors) shall perform the duties
of the Chief Executive Officer, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the Chief Executive Officer. Each
Vice President shall perform such other duties and have such other powers as the
Board of Directors from time to time may prescribe. If there be no Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the Chief Executive Officer or in the event of the
inability or refusal of the Chief Executive Officer to act, shall perform the
duties of the Chief Executive Officer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Chief Executive
Officer.
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Section 7. Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or the
Chief Executive Officer, under whose supervision he shall be. If the Secretary
shall be unable or shall refuse to cause to be given notice of all meetings of
the stockholders and special meetings of the Board of Directors, and if there be
no Assistant Secretary, then either the Board of Directors or the Chief
Executive Officer may choose another officer to cause such notice to be given.
The Secretary shall have custody of the seal of the Corporation and the
Secretary or any Assistant Secretary, if there be one, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by the signature of the Secretary or by the signature of any such
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing by
his signature. The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept or filed
are properly kept or filed, as the case may be.
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Section 8. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. The Treasurer shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer and the Board of
Directors, at its regular meetings, or when the Board of Directors so requires,
an account of all his transactions as Treasurer and of the financial condition
of the Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 9. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, Assistant Secretaries, if there be any, shall
perform such duties and have such powers as from time to time may be assigned to
them by the Board of Directors, the Chief Executive Officer, any Vice President,
if there be one,
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or the Secretary, and in the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors, the Chief Executive
Officer, any Vice President, if there be one, or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 11. Other Officers. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as
from time to time may be assigned to them by the Board of Directors. The Board
of Directors may delegate to any other officer of the Corporation the power to
choose such other
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officers and to prescribe their respective duties and powers, subject to the
restrictions set forth in Article III, Section 3 of these By-laws.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chief Executive Officer or a Vice President and (ii)
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, certifying the number of shares owned by him in
the Corporation.
Section 2. Signatures. Any or all of the signatures on a
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board of
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Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws.
Transfers of stock shall be made on the books of the Corporation only by the
person named in the certificate or by his attorney lawfully constituted in
writing and upon the surrender of the certificate therefor, which shall be
cancelled before a new certificate shall be issued. A copy of the Joint Venture
Agreement, containing certain restrictions on transfers of stock, is on file at
the Corporation's headquarters and is available from the Secretary of the
Corporation.
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other
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lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty days nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 6. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to vote as such owner,
and to hold liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by
law, the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, such notice shall be effective
if it is in writing and (i) personally delivered, (ii) sent by certified or
registered mail, postage prepaid, return receipt requested, (iii) sent by a
nationally recognized overnight delivery
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service, with delivery confirmed, or (iv) telexed or telecopied, with
receipt confirmed, addressed to such director, member of a committee or
stockholder, at his address as it appears on the records of the Corporation. A
notice shall be deemed to have been given as of (i) the date when personally
delivered, (ii) three (3) days after deposited with the United States certified
or registered mail, properly addressed, return receipt requested, postage
prepaid, (iii) the next day when delivered during business hours to said
overnight delivery service properly addressed, or (iv) confirmation of receipt
of the telex or telecopy, as the case may be, unless the sending party has
actual knowledge that a notice was not received by the intended recipient.
Section 2. Waivers of Notice. Whenever any notice is required
by law, the Certificate of Incorporation or these By-Laws, to be given to
any director, member of a committee or stockholder, a waiver thereof in writing,
signed, by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation
and ss. 3 of Article III hereof, and the Joint Venture Agreement, if any, may be
declared by the
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Board of Directors at any regular or special meeting, and may be paid in
cash, in property, or in shares of the capital stock. Before payment of any
dividend, there may be set aside out of any funds of the Corporation available
for dividends such sum or sums as the Board of Directors from time to time, in
its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for
money and notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of Directors may from time
to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall commence on January 1 and end on December 31 of each year.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
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ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings
other Than Those by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was a director or officer of the Corporation serving at the request of
the Corporation as a director or officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be
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in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings
by or in the Right of the Corporation. Subject to Section 3 of this Article
VIII, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably
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entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 3. Authorization of Indemnification. Any
indemnification under this Article VIII (unless ordered by a court) shall
be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders. To
the extent, however, that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any
determination under Section 3 of this Article VIII, a person shall be
deemed to have acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, or, with respect to
any criminal action or proceeding,
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to have had no reasonable cause to believe his conduct was unlawful, if his
action is based on the records or books of account of the Corporation or another
enterprise, or on information supplied to him by the officers of the Corporation
or another enterprise in the course of their duties, or on the advice of legal
counsel for the Corporation or another enterprise or on information or records
given or reports made to the Corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Section 4 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise of
which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this Section 4 shall not
be deemed to be exclusive or to limit in any way the circumstances in which a
person may be deemed to have met the applicable standard of conduct set forth in
Sections 1 or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 3 of this Article
VIII, and notwithstanding the absence of any determination thereunder, any
director or officer may apply to any court of competent jurisdiction in the
State of Delaware for indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article VIII.
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The basis of such indemnification by a court shall be a determination by
such court that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standards of conduct set forth
in Sections 1 or 2 of this Article VIII, as the case may be. Neither a contrary
determination in the specific case under Section 3 of this Article VIII nor the
absence of any determination thereunder shall be a defense to such application
or create a presumption that the director or officer seeking indemnification has
not met any applicable standard of conduct. Notice of any application for
indemnification pursuant to this Section 5 shall be given to the Corporation
promptly upon the filing of such application. If successful, in whole or in
part, the director or officer seeking indemnification shall also be entitled to
be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement
of Expenses. The indemnification and advancement of expenses provided by or
granted
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pursuant to this Article VIII shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any By-Law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, it
being the policy of the Corporation that indemnification of the persons
specified in Sections 1 and 2 of this Article VIII shall be made to the fullest
extent permitted by law. The provisions of this Article VIII shall not be deemed
to preclude the indemnification of any person who is not specified in Sections 1
or 2 of this Article VIII but whom the Corporation has the power or obligation
to indemnify under the provisions of the General Corporation Law of the State of
Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director or
officer of the Corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would
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have the power or the obligation to indemnify him against such liability
under the provisions of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article
VIII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For purposes of
this Article VIII, references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably
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believed to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not opposed to
the best interests of the Corporation" as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 hereof),
the Corporation shall not be obligated to indemnify any director or officer in
connection with a proceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, provide rights to indemnification and to the advancement of
expenses to
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employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended
or repealed, in whole or in part, or new By-Laws may be adopted by the
stockholders or by Supermajority Approval, provided, however, that notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such meeting of stockholders or Board of Directors as the case may
be. All such amendments must be approved by either the holders of a majority of
the outstanding capital stock entitled to vote thereon or by Supermajority
Approval.
Section 2. Entire Board of Directors. As used in this Article
IX and in these By-Laws generally, the term "entire Board of Directors" means
the total number of directors which the Corporation would have if there were no
vacancies.
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CERTIFICATE OF INCORPORATION
OF
GENOS BIOSCIENCES, INC.
FIRST: The name of the Corporation is Genos Biosciences,
Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 0000 Xxxxxx Xxxxxx, in the City of
Wilmington, County of New Castle. The name of its registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").
FOURTH: The total number of shares of all classes of stock
which the Corporation is authorized to issue is 5,000,000 shares, consisting of
4,000,000 shares of Class A Common Stock, par value $.01 per share and 1,000,000
shares of Class B Common Stock, par value $.01 per share.
(a) Rights and Privileges of Common Stock
As used herein, the term "Common Stock" shall include the
Class A Common Stock and the Class B Common Stock. Except as otherwise provided
herein, all shares of Class A Common Stock and Class B Common Stock will be
identical and will entitle the holders thereof to the same rights and
privileges.
1. VOTING RIGHTS
Except as otherwise required by law or as otherwise provided
herein, on all matters submitted to the Corporation's stockholders, (a) the
holders of Class A Common Stock will be entitled to one vote per share and (b)
the holders of Class B Common Stock will have no right to vote.
78
FIFTH: The name and mailing address of the Sole Incorporator
is as follows:
Name Address
---- --------
Xxxxxxx X. Xxxxxx X.X. Xxx 000
Xxxxxxxxxx, XX 00000
SIXTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as
from time to time fixed by, or in the manner provided in, the By-Laws
of the Corporation. Election of directors need not be by written ballot
unless the By-Laws so provide.
(4) To the fullest extent permitted by the GCL, as it exists
on the date hereof or as it may hereafter be amended, no director shall
be personally liable to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the GCL or (iv) for any
transaction from which the director derived an improper personal
benefit. Any repeal or modification of this Article SIXTH or any
adoption of any provision of this Certificate of Incorporation
inconsistent with this Article SIXTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
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79
modification with respect to acts or omissions occurring prior to such
repeal, modification or adoption.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Certificate of Incorporation, and
any By-Laws adopted by the stockholders; provided, however, that no
By-Laws hereafter adopted by the stockholders shall invalidate any
prior act of the directors which would have been valid if such By-Laws
had not been adopted.
SEVENTH: Meetings of stockholders may be held within or
without the State of Delaware, as the By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the GCL) outside
the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-Laws of the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the GCL, do make
this Certificate, hereby declaring and certifying that this is my act and deed
and the facts herein stated are true, and accordingly have hereunto set my hand
this 23rd day of January, 1997.
/s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Sole Incorporator
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STATE OF DELAWARE
Page 1
OFFICE OF THE SECRETARY OF STATE
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY "GENOS BIOSCIENCES, INC" IS DULY INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE
SO FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE TWENTY-FOURTH DAY OF
JANUARY, A.D. 1997.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE NOT BEEN
ASSESSED TO DATE.
---------------------------------
Xxxxxx X. Xxxxx, Secretary of State
Authentication: 8300414
Date: 01-24-97
81
LICENSE AGREEMENT
BETWEEN
GENOS BIOSCIENCES, INC.
AND
SEQUANA THERAPEUTICS, INC.
DATED AS OF
JANUARY 29, 1997
82
TABLE OF CONTENTS
Page
-----
ARTICLE I - DEFINITIONS......................................................................................... 2
ARTICLE II - GRANT.............................................................................................. 7
ARTICLE III - CONFIDENTIALITY................................................................................... 9
ARTICLE IV - PATENT PROSECUTION................................................................................. 10
ARTICLE V - INDEMNIFICATION..................................................................................... 11
ARTICLE VI - LIABILITY FOR INJURY AND DAMAGES................................................................... 11
ARTICLE VII - REPRESENTATIONS AND WARRANTIES.................................................................... 12
ARTICLE VIII - TERMINATION...................................................................................... 14
ARTICLE IX - RELATIONSHIP TO THE JOINT VENTURE AGREEMENT........................................................ 16
ARTICLE X - ARBITRATION......................................................................................... 16
ARTICLE XI - INFRINGEMENT....................................................................................... 17
ARTICLE XII - ASSIGNMENT........................................................................................ 18
ARTICLE XIII - NON-USE OF NAMES................................................................................. 18
ARTICLE XIV - COMMUNICATIONS.................................................................................... 18
ARTICLE XV - MISCELLANEOUS PROVISIONS........................................................................... 18
EXHIBIT A - THIRD PARTY LICENSES................................................................................ 21
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SEQUANA/GENOS BIOSCIENCES, INC. LICENSE AGREEMENT
This Agreement, made and entered into this twenty-ninth day of January,
1997, (the "Effective Date") by and between Sequana Therapeutics, Inc., a
corporation of the state of California having principal offices at 00000 Xxxxx
Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xx Xxxxx, XX 00000 ("Sequana"); and Genos
Biosciences, Inc., a corporation of the state of Delaware having principal
offices at 00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xx Xxxxx, XX 00000 ("the
Company").
W I T N E S S E T H:
WHEREAS, the Company is a development stage, free-standing,
for-profit entity which will engage in the business of researching and
identifying genes and related genetic sequence information associated with the
etiology of breast, prostate, and colon cancer, for the purpose of developing
diagnostic, prognostic, and therapeutic products and services relating thereto;
and
WHEREAS, the Company has been established as a joint venture
by and between Sequana and the Memorial Xxxxx-Xxxxxxxxx Cancer Center, 0000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 (hereinafter "MSK"), pursuant to a Joint Venture
Agreement which is to be executed prior to or concurrently with the execution of
this Agreement; and
WHEREAS, the Joint Venture Agreement specifies that Sequana will grant
certain rights in its patents, copyrights, trade secrets, know-how, and software
to the Company;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and in the Joint Venture Agreement, the parties hereby agree as follows:
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "Confidential Information" shall mean private information
transmitted by one party to the other, including but not limited to plans,
results, data, ideas, concepts, conclusions, suggestions, know-how, show-how,
inventions, discoveries, products, processes, trade secrets, and all information
relating to Licensed Inventions, Improvement Inventions, Licensed Trade Secrets,
Improvement Trade Secrets, Licensed Know-How, Improvement Know-How, Licensed
Copyrightable Works, Improvement Copyrightable Works, Licensed Products,
Licensed Processes, Licensed Services, Licensed Software, and Improvement
Software; any information provided by or to patent counsel engaged in
prosecution and/or maintenance of the Licensed
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84
Patent Rights or Improvement Patent Rights; financial and business
information; and any other information marked "Confidential" prior to
transmittal. With regard to oral communications, information conveyed thereby
shall be considered "Confidential Information" if made in the context of
discussions clearly relating to the Field, or if reduced to a writing marked
"CONFIDENTIAL" and transmitted to the other party within forty-five (45) days
after said oral communication. Confidential Information shall not include (i)
information that is readily accessible by proper means to those in the field of
cancer research at the time of disclosure, and (ii) information that the other
party can establish by competent proof was in its possession at the time of
disclosure and was not acquired directly or indirectly from the other party, and
the receiving party so informs the other party in writing within thirty (30)
days from disclosure.
1.2 "Copyrights" shall mean the rights provided under the copyright
laws of the United States and foreign countries, or under the 1886 Berne
Convention for the Protection of Literary and Artistic Works, in and to all
Sequana works of authorship that have been or may be fixed in any tangible
medium of expression, now known or later developed, from which they can be
perceived, reproduced, or otherwise communicated, either directly or with the
aid of a machine or device, irrespective of whether any registration of such
rights in any country has been or shall be undertaken.
1.3 "Field" shall mean the identification and biological
characterization of genes, regulatory elements and patterns of expression that
cause, or create a predisposition to, or involve the natural history, response
to therapy or suppression of, breast, prostate, and colon cancer, for the
purpose of the commercial development of diagnostic, prognostic, and therapeutic
products and services therefrom with respect to such three types of cancer.
1.4 "Improvement Copyrights" shall mean the Copyrights in and to
Sequana works of authorship that may be fixed in a tangible medium after the
Effective Date, which may reasonably be considered to be useful or necessary for
research and development in the Field, and which are derivative works (as
defined in the 00 Xxxxxx Xxxxxx Code ss.101) based upon one or more Licensed
Copyrightable Work. Works covered by Improvement Copyrights shall be referred to
as "Improvement Copyrightable Works".
1.5 "Improvement Inventions" shall mean the Inventions covered by the
Improvement Patent Rights.
1.6 "Improvement Know-How" shall mean Sequana Know-How that comes into
existence after the Effective Date, and which comprises then-current
perspectives and information necessary or useful for the proper use and
understanding of the Licensed Know-How.
1.7 "Improvement Patent Rights" shall mean the rights under patent
applications filed anywhere in the world by Sequana after the Effective Date
(but which are not Licensed Patent Applications as defined hereinabove), and the
patents issuing therefrom, which (i) rely upon one or more Licensed Patent or
Licensed Patent Application for priority, and (ii) claim inventions
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85
which are drawn to the same objects as the inventions claimed in one or
more Licensed Patent or Licensed Patent Application. The applications and
patents under which such rights are secured shall be referred to as "Improvement
Patent Applications" and "Improvement Patents," respectively.
1.8 "Improvement Process" shall mean one or more processes,
methods, or procedures, each of which:
(a) is covered in whole or in part by (i) a pending claim contained in an
Improvement Patent Application in the country in which the process is
practiced; or (ii) a valid and unexpired claim contained in an
Improvement Patent in the country in which the process is practiced; or
(b) was conceived, engineered, formulated, developed, designed,
implemented, manufactured, marketed, advertised, sold, distributed or
used in whole or in part through the use by the Company of Improvement
Trade Secrets and/or Improvement Know-How; or
(c) utilizes in whole or in part any Improvement Copyrightable Work or any
Improvement Software.
1.9 "Improvement Products" shall mean one or more product, each of
which:
(a) is covered in whole or in part by, or is manufactured or used by using
a process which is covered in whole or in part by, (i) a pending claim
contained in an Improvement Patent Application in the country in which
the products are made, used, offered for sale, sold or imported; or
(ii) a valid and unexpired claim contained in an Improvement Patent in
the country in which the products are made, used, offered for sale,
sold or imported; or
(b) was conceived, engineered, formulated, developed, designed,
implemented, manufactured, marketed, advertised, sold, distributed or
used in whole or in part through the use by the Company of Improvement
Trade Secrets and/or Improvement Know-How; or
(c) comprises in whole or in part any Improvement Copyrightable Work or
Improvement Software.
1.10 "Improvement Services" shall mean the use of Improvement Products
and/or Improvement Processes by the Company on behalf of third parties.
1.11 "Improvement Software" shall mean Sequana Software that comes into
existence after the Effective Date, and is a derivative work (as defined in 00
Xxxxxx Xxxxxx Code ss.101) based upon one or more item of Licensed Software.
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86
1.12 "Improvement Trade Secrets" shall mean Sequana Trade Secrets that
come into existence after the Effective Date, and which comprise then-current
perspectives and information necessary or useful for the proper use and
understanding of the Licensed Trade Secrets.
1.13 "Know-How" shall mean Trade Secrets that subsist at least in part
as the personal knowledge of Sequana directors, officers, employees and agents.
1.14 "Licensed Copyrights" shall mean the Copyrights in and to any
Sequana works of authorship that are fixed in tangible medium as of the
Effective Date, and which may reasonably be considered to be useful or necessary
for research and development in the Field. "Licensed Copyrightable Works" shall
mean any such Sequana works of authorship which are or may be protected by
Copyrights.
1.15 "Licensed Inventions" shall mean the Inventions covered by the
Licensed Patent Rights.
1.16 "Licensed Know-How" shall mean Sequana Know-How in existence as of
the Effective Date and which may reasonably be considered to be useful or
necessary for research and development in the Field.
1.17 "Licensed Patent Rights" shall mean the inchoate rights under any
United States and foreign patent applications as have been or may be filed by
Sequana on inventions made before the Effective Date which may reasonably be
considered to be useful or necessary for research and development in the Field;
equivalents thereof subsequently filed in other countries; any continuations,
divisions, reissues, or temporal extensions of any of the foregoing (hereinafter
the "Licensed Patent Applications"); and the legal rights under any patents
issuing from the Licensed Patent Applications (hereinafter the "Licensed
Patents").
1.18 "Licensed Processes" shall mean one or more processes, methods, or
procedures, each of which:
(a) is covered in whole or in part by (i) a pending claim contained in a
Licensed Patent Application in the country in which the process is
practiced; or (ii) a valid and unexpired claim contained in a Licensed
Patent in the country in which the process is practiced; or
(b) was conceived, engineered, formulated, developed, designed,
implemented, manufactured, marketed, advertised, sold, distributed or
used in whole or in part through the use by the Company of Licensed
Trade Secrets, and/or Licensed Know-How; or
(c) utilizes in whole or in part any Licensed Copyrightable Work or any
Licensed Software.
1.19 "Licensed Products" shall mean one or more products, each of
which:
(a) is covered in whole or in part by, or is manufactured or used by using
a process which
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87
is covered in whole or in part by, (i) a pending claim
contained in a Licensed Patent Application in the country in which the
products are made, used, offered for sale, sold or imported; or (ii) a
valid and unexpired claim contained in a Licensed Patent in the country
in which the products are made, used, offered for sale, sold or
imported; or
(b) was conceived, engineered, formulated, developed, designed,
implemented, manufactured, marketed, advertised, sold, distributed or
used in whole or in part through the use by the Company of Licensed
Trade Secrets and/or Licensed Know-How; or
(c) comprises in whole or in part any Licensed Copyrightable Work or
Licensed Software.
1.20 "Licensed Services" shall mean the use of Licensed Products and/or
Licensed Processes by the Company on behalf of third parties (i.e., to provide
services to third parties).
1.21 "Licensed Software" shall mean Sequana Software in existence as of
the Effective Date and which may reasonably be considered to be useful or
necessary for research and development in the Field.
1.22 "Licensed Trade Secrets" shall mean all Sequana Trade Secrets in
existence as of the Effective Date which may reasonably be considered to be
useful or necessary for research and development in the Field.
1.23 "Sequana Improvement Technology" shall mean Improvement Patent
Rights, Improvement Copyrights, Improvement Trade Secrets, Improvement Know-How,
and Improvement Software, taken collectively.
1.24 "Sequana Technology" shall mean the Licensed Patent Rights,
Licensed Copyrights, Licensed Trade Secrets, Licensed Know-How, and Licensed
Software, taken collectively.
1.25 "Software" shall mean Sequana computer code, including both source
code and object code, which, when executed by a digital computer, provides said
computer with the capability of manipulating numbers, text and/or graphics in a
manner defined by said computer code.
1.26 "Trade Secrets" shall mean information, including formulae,
patterns, compilations, programs, devices, methods, techniques, or processes
that (i) derive independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and (ii)
are the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. Trade Secrets as defined herein shall include all
proprietary rights to the commercial use and exploitation of Confidential
Information that may be protected by the laws of the United States or any state
thereof, or of any federal or local foreign government having jurisdiction
pertaining thereto, whether or not such rights are also protectable by patent
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88
rights or other legal rights.
1.27 "Transition Date" shall mean the later of the date that is (i)
three after the Effective Date, or (ii) the date upon which the equity ownership
interests of MSK and Sequana, as defined in the Joint Venture Agreement, are
first reduced by the contribution of capital from a party other than MSK or
Sequana.
ARTICLE II - GRANT
2.1 In exchange for the promises and other consideration contained
herein and in the Joint Venture Agreement, Sequana hereby grants to the Company
a non-exclusive, royalty-free, worldwide right and license under the Sequana
Technology to conduct research and development in the Field and to develop,
make, have made, use, lease, offer for sale, sell and import Licensed Products,
to practice the Licensed Processes, and to provide Licensed Services; but all of
the rights granted under this Section 2.1 are expressly limited to the Field.
This grant shall continue in perpetuity or until this Agreement may be
terminated as hereinafter provided.
2.2 In exchange for the promises and other consideration contained
herein and in the Joint Venture Agreement, Sequana further grants to the
Company, a non-exclusive, royalty-free, worldwide right and license under the
Sequana Improvement Technology (and also, in as much as needed to practice the
Sequana Improvement Technology, under the Licensed Patent Rights, Licensed
Copyrights, Licensed Trade Secrets, Licensed Know-How, and Licensed Software) to
develop, make, have made, use, lease, offer for sale, sell and import
Improvement Products, to practice the Improvement Processes, and to provide
Improvement Services; but all of the rights granted under this Section 2.2 are
expressly limited to the Field. This grant shall be construed to include the
right to use the results of research as may be conducted by Sequana in the
Field; and, to the extent that Sequana has the right to so grant, the right to
use the results of research as may be conducted by third parties in the Field.
This grant shall continue until the Transition Date. Sequana and the Company
hereby agree that prior to the expiration of this grant, they shall enter into
good faith negotiations to determine a mutually agreeable royalty or other fee
basis upon which such grant may be extended beyond such expiration.
2.3 The Company shall not have the right to grant sublicenses to any of
the rights, privileges and license granted hereunder, except to the limited
extent such sublicenses are impliedly granted to purchasers of Licensed
Products, Licensed Services, Improvement Products or Improvement Services.
2.4 In exchange for the promises and other consideration contained
herein and in the Joint Venture Agreement, Sequana further grants to the Company
an option, commencing with the Effective Date and expiring [***] thereafter, to
acquire non-exclusive sublicenses from Sequana, but only in the Field, under
those Software and other technology licenses from third parties which are listed
in Exhibit A hereto. Also in exchange for such consideration, Sequana hereby
grants to the Company options to acquire non-exclusive sublicenses from Sequana,
but only in the Field, under those Software and other technology licenses from
third parties which may be obtained by Sequana between the Effective Date and
the Transition Date, each such option to begin upon the effective date of each
such license and end [***] thereafter or upon the Transition Date, whichever is
sooner. All sublicenses optioned under this paragraph shall be at Sequana's
actual or allocable cost for the Company's use thereof, and shall be limited to
the extent to which Sequana has the right to so sublicense. Upon the Company's
exercise of such an option, which shall be effected by written notice to Sequana
within the applicable option period, Sequana shall within a reasonable time
thereafter prepare and forward to the Company sublicense agreement(s) prepared
in accordance with the requirements of the primary license, and requiring the
costs of the Company's use thereof to be paid directly by the Company, if the
primary license so permits. All such sublicenses shall, by their terms, expire
on the Transition Date. Sequana and the Company hereby agree that prior to the
Transition Date they shall enter into good faith negotiations to determine a
mutually agreeable royalty or other fee basis upon which such sublicenses may be
extended beyond such expiration.
7
*** CONFIDENTIAL TREATMENT GRANTED
89
[***]
2.6 The parties hereby agree that within a reasonable time after the
Effective Date hereof, the Company and Sequana will meet to discuss reasonable
and secure means by which the Licensed Copyrightable Works, Licensed Trade
Secrets, Licensed Know-How and Licensed Software will be delivered from Sequana
to the Company; and that such delivery shall be completed within one hundred and
eighty (180) days after the Effective Date, unless (i) such period shall be
extended by mutual agreement between the Company and Sequana, or (ii) delivery
of certain materials during such period shall not be practicable, in which case
transfer of same shall be completed within thirty (30) days of becoming
practicable. The parties further agree that within a reasonable time after the
Effective Date they will meet to discuss an ongoing process by which Improvement
Copyrightable Works, Improvement Trade Secrets, Improvement Know-How, and
Improvement Software, as well as information regarding Improvement Inventions,
can be timely transferred in a secure manner from Sequana to the Company.
2.7 Sequana hereby agrees that it will, from time to time, provide the
Company with access to non-confidential, non-proprietary information regarding
markers of prognostic value in the Field which is developed by Sequana during
the term of this Agreement.
2.8 The Company hereby agrees that it shall not use any of the Sequana
Technology or Sequana Improvement Technology, or any of the rights or
privileges granted herein, for any purposes other than research and development
(including commercial development of commercial products and services) in the
Field and the manufacturing, marketing and sale of commercial products and
services in the Field, as set forth in this Article II.
8
*** CONFIDENTIAL TREATMENT GRANTED
90
2.9 The grants under Sequana's Copyrights under this Article II
notwithstanding, the Company hereby agrees that (i) it shall not publish any
Licensed Copyrightable Works, Improvement Copyrightable Works, or significant
portions thereof in academic journals or elsewhere without the express written
permission of Sequana, which permission shall not be unreasonably withheld; and
(ii) that all such publications shall include attribution of authorship to
Sequana and/or its directors, officers, employees, agents or affiliates in a
manner that authors and readers of publications of that type would generally
consider to be proper and appropriate.
ARTICLE III - CONFIDENTIALITY
3.1 Sequana and the Company hereby agree to, and to use their best
efforts to cause their respective officers, directors, employees and agents to,
maintain one another's Confidential Information in strict secrecy, through at a
minimum the use of the same security measures as each uses to protect its own
most confidential records and information. Sequana hereby agrees that it shall
cause each of its officers, directors, employees and agents who receive
Confidential Information to maintain such Confidential Information in secrecy.
The Company likewise agrees that each of its directors, employees, officers, and
agents will be so bound in writing upon their employment, and will continue to
be so bound as condition of their employment. The Company also agrees that
Confidential Information will be provided only to directors, officers, employees
and agents who will utilize such information in their work as permitted under
this Agreement, and that all directors, officers, employees and agents receiving
such Confidential Information will be informed of the obligations of
confidentiality hereunder. Neither Sequana nor the Company will provide
Confidential Information of the other party to any third party (other than MSK)
without the express written permission from directors, officers or employees of
the other party known to have authority to provide such permission. The Company
and Sequana further agree that they will not, and will use their best efforts to
cause their directors, officers, employees and agents not to, communicate
Confidential Information of the other party to directors, officers, employees or
agents of MSK unless (i) such persons are bound by confidentiality obligations
such as those in this Agreement, and (ii) such persons are first made aware of
the confidential nature of the information being provided. Notwithstanding
anything contained herein to the contrary, the disclosure obligations set forth
in this Section 3.1 shall not preclude disclosure of Confidential Information by
either party hereto (or any of its respective officers, directors, employees or
agents) (i) with the prior written consent of the other party hereto, (ii) to
the extent necessary to comply with law or the valid order of a court or other
governmental or regulatory body of competent jurisdiction, in which event the
party making such disclosure shall so notify the other party hereto as promptly
as practicable (and, if possible, prior to making such disclosure) and shall
seek confidential treatment of such information, or (iii) to any not-for-profit,
governmental or quasi-governmental organization which may require such
disclosure, in which event the party making such disclosure shall take all
available measures to have such organization maintain such Confidential
Information in confidence; or if no such measures are available, shall so notify
the other party hereto as promptly as practicable (and, if possible, prior to
making such disclosure), in order to allow the other party to consider and to
undertake the filing of patent applications or other protective measures.
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3.2 The Company further accepts and acknowledges that it has a special
obligation of confidentiality with regard to the Licensed Inventions,
Improvement Inventions, Licensed Trade Secrets, Licensed Know-How, Improvement
Trade Secrets, and Improvement Know-How. The Company shall protect such Trade
Secrets and Know-How by undertaking those same measures as set forth in Section
3.1 hereinabove, and also by undertaking all measures that the Company uses to
protect its own trade secrets and know-how, as well as any and all other
security measures as may be reasonable and appropriate under the circumstances.
Furthermore, the Company hereby acknowledges that the unauthorized disclosure of
Sequana Trade Secrets or Know-How would cause irreparable injury to Sequana; and
the Company hereby agrees that in addition to monetary damages therefor, Sequana
shall be entitled to an injunction or other equitable remedy to prevent or limit
such disclosure.
3.3 Nothing in this Article III shall be construed to require either
the Company or Sequana to provide any particular Confidential Information to the
other party.
ARTICLE IV - PATENT PROSECUTION
4.1 Sequana shall apply for, shall seek prompt issuance of, and
maintain during the term of this Agreement the Licensed Patents and Improvement
Patents, which shall be the primary responsibility of Sequana. All decisions
regarding the filing, prosecution and maintenance of such patents shall be made
by Sequana in its sole discretion; provided, however, that the Company shall
have reasonable opportunities to advise Sequana and shall cooperate with Sequana
in such prosecution and/or maintenance.
4.2 Sequana may retain patent counsel of its own choosing, and
reserves the right to change such counsel at its own discretion.
4.3 Payment of all fees and costs relating to the prosecution and
maintenance of the Patent Applications and Patents, including additional foreign
or domestic filings, shall be paid by Sequana. However, should Sequana determine
that it will not file, or that (i) it will abandon, one or more Licensed Patent
Applications or Improvement Patent Applications in the United States Patent and
Trademark Office, the Japanese Patent Office, the European Patent Office, or the
Canadian Patent Office; or (ii) it will abandon one or more Licensed Patents or
Improvement Patents by failure to pay maintenance fees therefor, then Sequana
will so notify the Company. Upon written election by the Company to pay all
reasonable costs therefor (including reasonable attorney's fees), Sequana will
file and prosecute, and will not abandon, such applications and patents, and
will maintain patents issuing therefrom, for so long as the Company continues to
timely reimburse Sequana for all costs therefor.
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ARTICLE V - INDEMNIFICATION
5.1 The Company hereby agrees to indemnify and hold harmless Sequana,
its directors, officers, employees, agents and affiliates against any liability,
damages, loss or expense (including reasonable attorney fees and expenses of
litigation) arising out of the actions of the Company, its directors, officers,
employees, agents, or affiliates, or any third party acting on behalf or under
authorization by the Company, as the result of any products, processes or
services, including, but not limited to, the Licensed Products, Licensed
Processes, Licensed Services, Improvement Products, Improvement Processes, or
Improvement Services, or otherwise developed or made through the use, direct or
indirect, of any Licensed Patent Rights, Improvement Patent Rights, Confidential
Information, Trade Secrets, Know-How, or Software of Sequana.
5.2 Sequana hereby agrees to indemnify and hold the Company harmless
against any liability, damages, loss or expense (including reasonable attorneys
fees and expenses of litigation) arising out of the breach of any representation
or warranty provided by Sequana hereunder. Similarly, the Company hereby agrees
to indemnify and hold Sequana harmless against any liability, damages, loss or
expense (including reasonable attorneys fees and expenses of litigation) arising
out of the breach of any representation or warranty provided by the Company
hereunder.
ARTICLE VI - LIABILITY FOR INJURY AND DAMAGES
6.1 The Company shall not market, distribute, offer for sale or sell
any Licensed Products or Improvement Products, or provide any Licensed Services
or Improvement Services, or otherwise extend the benefits of the licenses
granted hereunder to any third party, or take any other action that could
reasonably be expected to give rise to a claim against Sequana for damages for
personal injury, unless the Company shall have first provided Sequana with
either:
(a) a certificate of insurance proving that the Company has in force, during
the term of this Agreement, a policy of insurance which (1) will indemnify
Sequana, its directors, officers, employees, agents and affiliates against
liability claims for injury or damages arising as the result of any
products, processes or services, including, but not limited to, the
Licensed Products, Licensed Processes, Licensed Services, Improvement
Products, Improvement Processes, or Improvement Services, or otherwise
developed or made through the use, direct or indirect, of any Licensed
Patent Rights, Improvement Patent Rights, Confidential Information, Trade
Secrets, Know-How, or Software of Sequana; (2) is drawn in an amount not
less than five million dollars ($5,000,000) for each occurrence as a
combined single limit for bodily injury and death and property damage; (3)
is endorsed to name to Sequana, the Company and their respective directors,
officers, employees, agents and affiliates as additional insureds under
such policy of insurance and such insurance shall be deemed primary; and
(4) contains a stipulation that the required coverage will not be reduced,
materially altered or canceled without first giving sixty
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(60) days prior written notice to Sequana; or
(b) evidence acceptable to Sequana that the Company has sufficient
financial resources to support meaningfully the indemnification
obligations undertaken herein.
6.2 Unless waived in writing by Sequana, the Company agrees that any
liability insurance policy used to satisfy Section 6.1 hereinabove shall be
maintained in force for so long as this Agreement remains in effect, and for six
(6) years after termination or expiration of this Agreement. Neither the Company
nor any third party shall terminate, reduce the face value of, or otherwise
materially modify such insurance coverage during the aforementioned period of
time, unless equal or greater coverage is provided under another policy in
compliance with the foregoing provisions and without a gap in coverage.
6.3 Cancellation, termination or expiration of any liability insurance
policy used to satisfy Section 6.1 hereinabove shall automatically result in
termination of the Agreement without any requirement for notice. Such
termination shall become effective immediately and simultaneously with the
cancellation, termination or expiration of such liability insurance policy,
unless prior to termination or expiration of such insurance equal or greater
coverage is provided under another policy in compliance with the foregoing
provisions and without a gap in coverage.
ARTICLE VII - REPRESENTATIONS AND WARRANTIES
7.1 Sequana hereby represents and warrants to the Company that:
(a) Sequana is duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of California, and has the
corporate power and authority to own and license its intellectual
properties.
(b) Sequana has the corporate power and authority to execute, deliver and
perform this Agreement, the Joint Venture Agreement, and other
agreements contemplated hereunder and thereunder.
(c) The execution, delivery and performance of this Agreement, the Joint
Venture Agreement and the other agreements contemplated hereunder and
thereunder have been duly authorized and approved by the Board of
Directors of Sequana, and no other corporate proceedings on the part of
Sequana are necessary to authorize and approve this Agreement, the
Joint Venture Agreement, or the other agreements contemplated hereunder
and thereunder. This Agreement has been duly executed and delivered by
Sequana.
(d) Assuming due authorization, execution and delivery by the Company, this
Agreement constitutes a valid and binding obligation of Sequana,
enforceable against Sequana in
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accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by
the principles governing the availability of equitable remedies.
(e) The execution, delivery and performance of this Agreement, the Joint
Venture Agreement, and the other agreements contemplated hereby and
thereby will not:
i. contravene any provisions of the Certificate of
Incorporation or By-Laws of the Sequana;
ii. to the knowledge of Sequana, (with or without notice
or lapse of time or both) result in a breach of any
provision of, or constitute a default (or an event
which, with or without notice or lapse of time or
both, would constitute a default) under any license,
contract, agreement, or any loan or credit agreement,
note, bond, mortgage, indenture, lease or other
agreement, of any kind to which the Sequana or any of
its properties or assets is subject; or
iii. violate or conflict with any statutes, ordinances,
codes, laws, rules, regulations, decrees, judgments or
injunctions applicable to Sequana or any of its
respective properties or assets.
(f) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not require
any authorization, consent, permit or approval of, or notice to, or
filing with, any third party, including, but not limited to any
governmental or regulatory authority, other than filings pursuant to
the Exchange Act of 1934.
(g) Sequana owns all of the Sequana Technology and will own all
of the Sequana Improvement Technology, and such ownership has not been
challenged by any Person (as that term is defined in the Joint Venture
Agreement). Sequana has not received any communication(s), or
otherwise received any information, asserting a claim by any Person to
the ownership of or right to use such Sequana Technology, or alleging
that Sequana has violated, or by conducting its business or granting
the licenses contemplated hereby would violate, any of the licenses,
patents, patent rights, trademarks, trademark rights, trade names,
trade name rights, copyrights, trade secrets, know-how, inventions,
designs, proprietary rights and processes, works of authorship,
computer programs and technical data and information of any other
Person, and Sequana does not know of any basis for any such claim. To
the knowledge of Sequana (without investigation, other than ongoing
efforts by Sequana to be generally aware of activities by competitors
and others in the biotechnology field), no Person is infringing upon
or otherwise acting adversely to the right or claimed right of Sequana
under or with respect to any of the Sequana Technology.
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(h) There are no technologies for which Sequana has a license, but does not
have the right to sublicense, which are currently contemplated to be
required in order for the Company to carry out the research and other
transactions contemplated by the 1997 Annual Plan. [***]
7.2 Except as expressly set forth herein, Sequana makes no warranties,
expressed or implied, as to any matter whatsoever, including, without
limitation, the condition, merchantability or fitness for purpose of any
information or rights provided hereunder, including without limitation the
Licensed Products, Improvement Products, Licensed Processes, Improvement
Processes, Licensed Services, Improvement Services, Licensed Patent Rights,
Improvement Patent Rights, Licensed Copyrights, Improvement Copyrights, Licensed
Trade Secrets, Improvement Trade Secrets, Licensed Know-How, Improvement
Know-How, Licensed Software, or Improvement Software. Sequana shall not be
liable for any direct, consequential, or other damages suffered by the Company
or any third party resulting from the use of any of the foregoing, except to the
extent of any breach of a representation or warranty of Sequana.
7.3 Except as expressly set forth herein, Sequana makes no
representations or warranties of any kind regarding whether any of the rights
granted hereunder can be utilized by the Company in any manner without
infringing the intellectual property rights of third parties. The Company
acknowledges that the Company alone is responsible for (1) considering whether
any products, methods or services that it contemplates making, using, selling,
offering for sale, or importing might infringe any such third parties' rights;
(2) obtaining any licenses that may be required, or alternatively, modifying its
products, methods or services in order to avoid such infringement; (3) except to
the extent of any breach of a representation or warranty of Sequana, defending
(including the payment of reasonable attorney's fees and costs of litigation)
and holding Sequana, its directors, officers, agents, and affiliates harmless
against any and all intellectual property infringement suits (pursuant to
Section 5.1 hereinabove); and (4) except to the extent of any breach of a
representation or warranty of Sequana, paying any and all damages or settlement
costs arising therefrom.
ARTICLE VIII - TERMINATION
8.1 If the Company shall be dissolved, or if the Joint Venture
Agreement shall be terminated in accordance with its terms, this Agreement shall
terminate simultaneously therewith, without the necessity for notice thereof to
either party.
8.2 If the Company (i) shall make a general assignment for the benefit
of creditors, (ii) shall file a voluntary petition of bankruptcy, (iii) shall be
adjudged a bankrupt or insolvent, or have had entered against it an order for
relief in any bankruptcy or insolvency proceeding, (iv) shall file a petition or
answer seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
(v) shall file an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding specified
in (vii) below, (vi) shall seek, consent to
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96
or acquiesce in the appointment of a trustee, receiver or liquidator of the
Company or of all or any substantial part of the assets of the Company or (vii)
shall fail to obtain dismissal within 60 days of the commencement of any
proceeding against the Company seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, or the entry of any order appointing a trustee, liquidator or
receiver of the Company or of the Company's assets or any substantial portion
thereof, this Agreement shall automatically terminate, inasmuch as permitted
under applicable and prevailing law.
8.3 Upon any material breach or default of this Agreement by the
Company, other than those occurrences set out in Paragraphs 8.1 and 8.2
hereinabove, which shall always take precedence in that order over any material
breach or default referred to in this Paragraph 8.3, Sequana shall have the
right to serve notice upon the Company by certified mail at the address
designated herein, of its intention to terminate this Agreement upon the
expiration of ninety (90) days after the day said notice was mailed, unless the
Company shall cure any such breach or default within said ninety (90) day
period. Upon the expiration of said ninety (90) day period, if the Company shall
not have so cured, and if Sequana deposits a notice of final termination with
the United States Postal Service for mailing by certified mail, final
termination of this Agreement shall be effective on the date of said deposit.
8.4 In the event that the Company shall have determined to permanently
abandon the development, manufacture, use, offering for sale, distribution,
promotion, sale, and importation of Licensed Products, Licensed Processes,
Licensed Services, Improvement Products, Improvement Processes, and Improvement
Services, then Sequana shall have the right to serve notice upon the Company by
certified mail at the address designated herein, of its intention to terminate
this Agreement upon the expiration of six (6) months after the day said notice
was mailed. Upon the expiration of said six (6) month period, if the Company
shall not have provided Sequana with a detailed written plan for the continued
or revived development, manufacture, use, offering for sale, distribution,
promotion, sale, and importation of one or more of same, and if Sequana
deposits a notice of final termination with the United States Postal Service
for mailing by certified mail, final termination of this Agreement shall be
effective on the date of said deposit.
8.5 Upon termination of this Agreement pursuant to Sections 8.1, 8.2,
and 8.4 hereinabove, the company may, for a period of six (6) months after the
termination date, sell all Licensed products and Improvement Products on hand
as of the termination date, and complete the manufacture of all Licensed
Products and Improvement Products that are the process of manufacture at the
time of such termination and sell the same.
8.6 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
8.7 The parties hereby agree that the confidentiality obligations of
Sequana and the Company set forth in Article III hereof, and the indemnity and
insurance obligations of the
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Company set forth in Articles V and VI hereof, and the indemnity obligations of
Sequana set forth in Article V hereof, shall survive termination of this
Agreement.
ARTICLE IX - RELATIONSHIP TO THE JOINT VENTURE AGREEMENT
9.1 This Agreement is made contingent upon the prior or simultaneous
execution of the Joint Venture Agreement; and the continued force and effect of
this Agreement is fully dependent upon the continued force and effect of the
Joint Venture Agreement. Any failure of the Joint Venture Agreement to be fully
binding upon the parties thereto -- for reasons including without limitation
failure of authorized execution, impossibility, termination for cause,
expiration, frustration of purpose, force majeure, and illegality -- shall
render this Agreement terminated, expired, or null and void as is the Joint
Venture Agreement, as of the moment of such termination, expiration, or other
failure of the Joint Venture Agreement. The parties hereto expressly waive the
need for any specific notice of the termination, expiration, or other failure of
this Agreement as may thus occur.
9.2 The parties hereby agree that in the event of a disagreement or
other need to resolve any ambiguity there may be regarding the language of this
Agreement or the intent of the parties, reference may be made to the language of
the executed Joint Venture Agreement, as if its terms and the terms of this
Agreement were in the same agreement; provided, however, that doing so does not
create an ambiguity in the interpretation of this Agreement where one otherwise
did not exist; and further provided that this Section 9.2 shall not be construed
as an agreement to admit parol evidence of any other form to be used in the
resolution of such ambiguity.
ARTICLE X - ARBITRATION
10.1 Except as to issues relating to the validity, construction or
effect of any patent or copyright licensed hereunder, any and all claims,
disputes or controversies arising under, out of, or in connection with this
Agreement, which have not been resolved by good faith negotiations between the
parties, shall be resolved by final and binding arbitration in New York, NY
under the rules of the American Arbitration Association then pertaining. The
arbitrators shall have no power to add to, subtract from or modify any of the
terms or conditions of this Agreement. Any award rendered in such arbitration
may be enforced by either party in either the courts of the State of New York or
in the United States District Court for the Southern District of New York, to
whose jurisdiction for such purposes Sequana and the Company each hereby
irrevocably consent and submit.
10.2 Claims, disputes or controversies concerning the validity,
construction or effect of any patent or copyright licensed hereunder shall be
resolved in a court having subject matter jurisdiction thereof.
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10.3 In the event that, in any arbitration proceeding, any issue shall
arise concerning the validity, enforceability, construction or effect of any
patent or copyright licensed hereunder, the arbitrators shall assume the
validity and enforceability of such patent or copyright in its entirety; in any
event the arbitrators shall not delay the arbitration proceeding for the purpose
of obtaining or permitting either party to obtain judicial resolution of such
issue, unless an order staying such arbitration proceeding shall be entered by a
court of competent jurisdiction. Neither party shall raise any issue concerning
the validity, enforceability, construction or effect of any patent licensed
hereunder in any proceeding to enforce any arbitration award hereunder or in any
proceeding otherwise arising out of any such arbitration award.
ARTICLE XI - INFRINGEMENT
11.1 The Company and Sequana shall promptly inform the other in writing
of any alleged infringement of which it shall have notice by a third party of
any patents, copyrights, trade secrets, know-how, or software licensed
hereunder, and provide such other with any available evidence of infringement.
11.2 During the term of this Agreement, Sequana alone shall have the
right, but shall not be obligated, to prosecute at its own expense legal action
against any infringers of any of the intellectual property rights licensed
hereunder. In furtherance of such right, the Company hereby agrees that Sequana
may join the Company as a party plaintiff in any such suit, without expense to
the Company. The total cost of any such infringement action shall be borne by
Sequana, and Sequana shall keep any recovery or damages for past infringement
derived therefrom.
11.3 In any infringement suit as Sequana may institute to enforce any
of the intellectual property rights licensed hereunder, the Company shall, at
the request of Sequana, cooperate in all respects and, to the extent possible,
have its directors, officers, employees and agents testify when requested and
make available relevant records, papers, information, samples, specimens, and
the like.
11.4 Sequana shall have the sole right to defend any of the
intellectual property rights licensed hereunder against any declaratory judgment
or other action alleging invalidity, unenforceability, or other defect in same.
11.5 Subject to Section 2.5 hereof, Sequana shall have the sole right
to settle any third party infringement of intellectual property rights licensed
hereunder by granting a license to the accused infringer or otherwise, in
Sequana's sole discretion.
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ARTICLE XII - ASSIGNMENT
12.1 Neither party may assign or otherwise transfer this Agreement and
the license granted hereby and the rights acquired by it hereunder without the
prior written consent of the other party. This Agreement shall inure to the
benefit of and be binding upon the parties and their respective heirs,
executors, administrators, successors and permitted assigns.
ARTICLE XIII - NON-USE OF NAMES
13.1 The Company shall not use the names of Sequana nor of its
directors, officers, employees, agents or affiliates, nor any adaptation
thereof, in any advertising, promotional or sales literature without prior
written consent obtained from Sequana in each case, except that the Company may
state that it is licensed by Sequana under one or more of the patents and/or
applications comprising the Licensed Patent Rights and Improvement Patent
Rights.
ARTICLE XIV - COMMUNICATIONS
14.1 Any notice, request, consent or communication (collectively, a
"Notice") under this Agreement shall be effective if it is in writing and (i)
personally delivered, (ii) sent by certified or registered mail, postage
prepaid, return receipt requested, (iii) sent by a nationally recognized
overnight delivery service, with delivery confirmed, or (iv) telexed or
telecopied, with receipt confirmed, addressed as set forth in Section 10.2 of
the Joint Venture Agreement or to such address as shall be furnished by either
party hereto to the other party hereto. A Notice shall be deemed to have been
given as of (i) the date when personally delivered, (ii) three (3) days after
being deposited with the United States certified or registered mail, properly
addressed, return receipt requested, postage prepaid, (iii) the next day when
delivered using business hours to said overnight delivery service properly
addressed, or (iv) confirmation of receipt of the telex or telecopy, as the case
may be, unless the sending party has actual knowledge that a Notice was not
received by the intended recipient. All Notices shall specifically state: (i)
the provision (or provisions) of this Agreement with respect to which such
Notice is given, and (ii) the relevant time period, if any, in which the party
receiving the Notice must respond.
ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1 This Agreement and the Joint Venture Agreement shall be construed,
governed, interpreted and applied in accordance with the laws of the State of
Delaware, U.S.A. without regard to the conflict of law principles thereof,
except that questions affecting the validity, construction or effect of any
patent shall be determined by the laws of the country in which the patent was
granted.
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15.2 The parties hereto acknowledge that this Agreement, the Joint
Venture Agreement, the Services Agreements (as such term is defined in the Joint
Venture Agreement) and the Warrant Agreement (as such term is defined in the
Joint Venture Agreement) sets forth the entire Agreement and understanding of
the parties hereto as to the subject matter hereof, and shall not be subject to
any charge or modification except by the execution of a written instrument
subscribed to by the parties hereto.
15.3 The provisions of this Agreement are severable, and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
15.4 The Company agrees to xxxx the Licensed Products sold in the
United States with all applicable United States patent numbers. All Licensed
Products shipped to or sold in other countries shall be marked in such a manner
as to conform with the patent laws and practice of the country of manufacture or
sale. Unless truly impossible, patent marking shall be physically made upon the
patented article itself. The Company hereby acknowledges that failure to xxxx or
failure to properly xxxx xxx result in the lack of notice to infringers, and
that the Company shall be fully liable to Sequana for the loss of infringement
damages which may result therefrom.
15.5 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
15.6 Nothing herein shall be construed to require the Company to
utilize any of the rights granted by Sequana hereunder, or to prevent or
restrict the Company from acquiring or using alternate gene discovery technology
of a third party or parties.
15.7 Subject to Section 6.4 of the Joint Venture Agreement, the Company
shall hold all tangible embodiments of Sequana Technology and Sequana
Improvement Tecnology and Sequana's Confidential Information in trust for
Sequana, irrespective of when or by whom such were made. Subject to Section 6.4
of the Joint Venture Agreement, upon the termination or expiration of this
Agreement for any reason, the Company shall promptly transfer to Sequana any and
all such embodiments, including all copies thereof.
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IN WITNESS WHEREOF, the parties hereto, by the signatures of their
respective authorized representatives, do attest that the Joint Venture
Agreement has already been executed, or is being executed simultaneously
herewith; and the parties hereto, by those same signatures, do hereby duly
execute this License Agreement, with the intention to become bound thereby.
SEQUANA THERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive
GENOS BIOSCIENCES, INC.
By: /s/ N.C. Dracopoli
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice-President, Research Director
102
THIRD PARTY LICENSES
[***]
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103
SERVICES AGREEMENT
This Services Agreement is made and entered into as of the 29th day of
January, 1997, between Sequana Therapeutics, Inc., a California corporation
("Sequana"), and Genos Biosciences, Inc., a Delaware corporation (the
"Company").
RECITALS
1. Sequana and Memorial Xxxxx-Xxxxxxxxx Cancer Center, a New York
not-for-profit corporation ("MSK"), have entered into a Joint Venture Agreement
dated as of January 29, 1997 (the "JV Agreement"), which contemplates the
establishment, as a joint venture, of the Company.
2. The Company will engage in the business of researching and
identifying genes and related genetic sequence information associated with the
etiology of breast, prostate, and colon cancer, for the purpose of developing
diagnostic, prognostic, and therapeutic products and services relating thereto.
3. The Company requires that Sequana provide certain services to enable
the Company to achieve its purpose.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Sequana and the Company agree as follows:
1. TERM.
1.1. This Agreement shall be effective on the date hereof and shall
continue until the dissolution of the Company pursuant to the terms of the JV
Agreement (the "Term"), unless terminated earlier in accordance with Section
1.2 hereof.
1.2. Subject to the provisions of Section 5 hereof, either party hereto
may terminate this Agreement due to a material breach by the other party of any
of its obligations or covenants hereunder upon 30 calendar days' notice to the
breaching party if such breaching party fails to remedy such breach within such
30 calendar days, or if such breach cannot be remedied within such 30 calendar
days, if such breaching
104
party has not undertaken substantial good faith efforts to remedy such breach.
This Agreement may not be terminated without cause except as specifically
provided herein or by the mutual written agreement of the parties.
1.3 In the event that this Agreement is terminated due to the material
breach of either party pursuant to Section 1.2 hereof, the duties and
obligations of the breaching party which have accrued prior to termination
shall not be released or discharged by such termination.
2. AGREEMENT TO PERFORM SELECTED SERVICES.
2.1. Subject to all of the terms and conditions hereof, Sequana and the
Company hereby agree that Sequana shall offer and provide to the Company during
the Term those services described on Schedule A hereto (collectively, the
"Services"). The Services shall be provided on a reasonably timely basis.
Charges for Services shall be as set forth in Section 3 hereof. The level of
Services to be provided in a given fiscal year shall be based on the
anticipated needs set forth in the Annual Plan (as defined in the JV Agreement)
for such fiscal year.
2.2. The Company shall afford to the officers, directors, employees and
representatives of Sequana, upon reasonable request, on-line access to computer
data (the "Data") generated by the Company and which are reasonably necessary
to enable Sequana to provide the Services, provided, that such access does not
unreasonably disrupt the personnel and/or operations of the Company. Sequana
agrees that all Data provided to Sequana or any of its officers, directors,
employees or representatives pursuant to the first sentence of this Section 2.2
shall be kept confidential, and Sequana shall not disclose such Data to any
persons other than the directors, officers, employees, and legal and financial
advisors of Sequana who reasonably need to have access to the confidential
information and who are advised of the confidential nature of such information;
provided, however, the foregoing obligation of Sequana shall not (i) relate to
any information that (a) is or becomes generally available other than as a
result of unauthorized disclosure by Sequana or by persons to whom Sequana has
made such information available, (b) is or becomes available to Sequana on a
non-confidential basis from a third party that is not, to Sequana's knowledge,
bound by any other agreement relating to confidentiality with the Company or
(ii) prohibit disclosure of any information if required by law, rule,
regulation, court order or other legal or governmental process.
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3. CHARGES FOR SERVICES; PAYMENT.
3.1 With respect to supplies and/or equipment provided to the Company,
or utilized, by Sequana in connection with any Service(s) provided hereunder,
the Company shall pay Sequana [***]. With respect to any employee (a "Sequana
Employee") of Sequana who provides any Service(s) hereunder, the Company shall
pay to Sequana, [***], the Proportionate Employee Cost (as hereinafter defined)
for such Sequana Employee for the applicable fiscal year, subject to quarterly
reconciliation (based on time actually devoted to such Service(s)).
"Proportionate Employee Cost" with respect to any Sequana Employee shall mean
[***]. The payments for the Services shall be made from and to the extent of
the capital committed by Sequana and MSK pursuant to the JV Agreement.
3.2. Sequana shall xxxx the Company monthly for all charges for Services
provided hereunder, which xxxx shall be accompanied by reasonable documentation
or explanation supporting such charges, and the Company shall pay Sequana in
full for all charges for Services within 30 days after receipt of such xxxx and
other documentation or explanation, subject to the second sentence of Section
3.1 hereof.
4. MUTUAL COVENANT. Except to the extent otherwise provided herein, the
Company and Sequana covenant and warrant that the charges for the Services
hereunder are fair and equitable.
5. FORCE MAJEURE. If either party hereto is unable to perform any of
its duties or fulfill any of its covenants or obligations under this Agreement
as a result of causes beyond its control and without its fault or negligence,
including, but not limited to, acts of God or government, fire, flood, war,
governmental controls, and labor strife, then (i) such party shall not be
deemed to be in breach of this Agreement during the continuance of such events
which rendered it unable to perform; (ii) such party shall have such additional
time thereafter as is reasonably necessary to enable it to resume performance
of its duties and obligations under this Agreement; and (iii) in the case of
Sequana's failure to perform, the Company
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shall not be required to pay Sequana for any Service not performed to the
extent that such other party is unable to perform and, in the case of the
Company's failure to perform, Sequana shall not be required to perform the
Services to the extent the Company's failure renders Sequana unable to provide
such Services. Notwithstanding the foregoing, if the suspension of a party's
obligation to perform under this Agreement is of such a nature or duration as
to substantially frustrate the purpose of this Agreement, then the Company or
Sequana, as the case may be, shall have the right to terminate this Agreement
by giving to the other 30 days' prior written notice of termination, in which
case termination shall be effective upon the expiration of such 30-day period
unless performance is resumed prior to such expiration.
6. MISCELLANEOUS.
6.1. Assignability. Neither party hereto shall assign this
Agreement or any Services to be provided hereunder without the prior written
consent of the other party hereto.
6.2. Third Parties. Nothing expressed or implied in this Agreement
is intended or shall be construed to confer upon or give to any third party any
rights or remedies by virtue of this Agreement.
6.3. Amendments. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
6.4. Notices. Except as otherwise expressly provided herein, any
notice, request, consent or communication (collectively, a "Notice") under this
Agreement shall be effective if it is in writing and (i) personally delivered,
(ii) sent by certified or registered mail, postage prepaid, return receipt
requested, (iii) sent by a nationally recognized over-night delivery service,
with delivery confirmed, or (iv) telexed or telecopied, with receipt confirmed,
addressed as shown below:
If to the Company Genos Biosciences, Inc.
00000 X. Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
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If to Sequana Sequana Therapeutics, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
A Notice shall be deemed to have been given as of (i) the date when personally
delivered, (ii) three (3) days after deposited with the United States certified
or registered mail, properly addressed, return receipt requested, postage
prepaid, (iii) the next day when delivered during business hours to said
overnight delivery service properly addressed, or (iv) confirmation of receipt
of the telex or telecopy, as the case may be, unless the sending party has
actual knowledge that a Notice was not received by the intended recipient. All
Notices shall specifically state: (i) the provision (or provisions) of this
Agreement with respect to which such Notice is given, and (ii) the relevant
time period, if any, in which the party receiving the Notice must respond.
The addresses set forth above may be changed by any party upon furnishing to
the other party a notice of change of address in accordance with the terms of
this paragraph.
6.5. Governing Law. This Agreement shall be governed by and construed
in accordance with the substantive law of the State of Delaware.
6.6. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
6.7. Effect of Headings. The section and paragraph headings herein are
for convenience only and shall not affect the construction hereof.
6.8. Time of the Essence. The parties agree that time shall be of the
essence in the performance of their obligations hereunder.
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6.9. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
6.10. Entire Agreement. This Agreement and the other agreements
referenced herein constitute the entire agreement between the Company and
Sequana with respect to the matters covered herein and supersede any prior
negotiations, understandings or agreements with respect to the matters
contemplated hereby.
6.11. Liability for Non-Performance. Neither of the parties hereto
shall have any liability to each other for failure to perform its obligations
hereunder unless such failure arises out of, directly or indirectly, the
misconduct or gross negligence on the part of the nonperforming party. Neither
party shall be required to perform any Service (or any part of any Service) to
the extent that performance of such Service (or such part of such Service)
would violate any law, rule or regulation.
6.12. Independent Entities. In carrying out the provisions of this
Agreement, the Company and Sequana are and shall be deemed to be for all
purposes, separate and independent entities. The Company and Sequana shall
select their employees and agents, and such employees and agents shall be under
the exclusive and complete supervision and control of the Company or Sequana,
as the case may be. The Company and Sequana hereby acknowledge responsibility
for full payment of wages and other compensation to all employees and agents
engaged by either in the performance of their respective Services under this
Agreement. It is the express intent of this Agreement that the relationship of
the Company to Sequana and Sequana to the Company shall be solely that of
separate and independent companies and not that of a joint venture, partnership
or any other joint relationship.
6.13. Intellectual Property. All intellectual property rights that are
created or otherwise arise in the course of providing Services on behalf of the
Company hereunder shall belong to the Company, and Sequana hereby agrees to
execute all documents and to take all other actions required in order for the
Company to secure such rights.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties set forth below.
GENOS BIOSCIENCES, INC.
By: /s/ N. C. DRACOPOLI
----------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President, Research Director
SEQUANA THERAPEUTICS, INC.
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive
110
SCHEDULE A
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