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EXHIBIT 10.27
PFIZER, INC.
COLLABORATIVE RESEARCH
AGREEMENT
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COLLABORATIVE RESEARCH AGREEMENT
This COLLABORATIVE RESEARCH AGREEMENT ("Agreement") is entered into as of
December 22, 1997 by and between PFIZER INC ("Pfizer"), a Delaware corporation,
having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and its
Affiliates, and ABGENIX, INC. ("Abgenix"), a Delaware corporation, having an
office at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000;
WHEREAS, Abgenix has expertise in the generation of human monoclonal antibodies
through utilization of transgenic Xenomouse(TM) animals; and
WHEREAS, Abgenix is licensed under the patents and patent applications set forth
in Exhibit A attached to and made part of this Agreement with respect to the
transgenic Xenomouse(TM) animals; and
WHEREAS, Pfizer has the capability to undertake research for the discovery and
evaluation of agents for treatment of disease and also the capability for
clinical analysis, manufacturing and marketing with respect to therapeutic
agents;
WHEREAS, Pfizer and Abgenix enter into this Agreement to discover and develop
patentable therapeutic antibody agents;
NOW, THEREFORE, the parties agree as follows:
1. Definitions
Whenever used in this Agreement, the terms defined in this Section 1 shall have
the meanings specified.
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1.1 "Affiliate" means any corporation or other legal entity owning,
directly or indirectly, fifty percent (50%) or more of the voting capital shares
or similar voting securities of Pfizer or Abgenix; any corporation or other
legal entity fifty percent (50%) or more of the voting capital shares or similar
voting rights of which is owned, directly or indirectly, by Pfizer or Abgenix or
any corporation or other legal entity fifty percent (50%) or more of the voting
capital shares or similar voting rights of which is owned, directly or
indirectly, by a corporation or other legal entity which owns, directly or
indirectly, fifty percent (50%) or more of the voting capital shares or similar
voting securities of Pfizer or Abgenix.
1.2 "Research Plan" means the written plan describing the research and
development in the Area to be carried out by Pfizer and Abgenix pursuant to this
Agreement. The Research Plan is attached to and made a part of this Agreement as
Exhibit B.
1.3 "Research Program" is the collaborative research program in the Area
conducted by Pfizer and Abgenix pursuant to the Research Plan.
1.4 "Effective Date" is December 22, 1997.
1.5 "Contract Period" means the period beginning on the Effective Date
and ending on the date on which this Agreement terminates.
1.6 "Area" means research or development with respect to the discovery
and development of therapeutic Antibody Products directed against a Target
Antigen useful in the treatment or prevention of human disease.
1.7 "Technology" means and includes all materials, technology, technical
information, know-how, expertise and trade secrets within the Area.
1.8 "Abgenix Technology" means Technology that is or was:
(a) developed by employees of or consultants to Abgenix alone or
jointly with third parties prior to the Effective Date; or
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(b) acquired by purchase, license, assignment or other means from
third parties by Abgenix prior to the Effective Date or since that date that is
not part of Joint Technology.
1.9 "Joint Technology" means Technology that is or was:
(a) developed by employees of or consultants to Pfizer or Abgenix
solely or jointly with each other in the course of performing the Research
Program including (i) Antibody Products, (ii) cells that express or secrete
Antibody Products and (iii) materials derived from Antibody Products or cells
that express or secrete Antibody Products; provided, however that XenoMouse(TM)
animals immunized in the course of conducting the Research Program shall remain
Abgenix Technology; or
(b) acquired by purchase, license, assignment or other means from
third parties by Abgenix or Pfizer, pursuant to Article 7, in the course of
performing the Research Program.
1.10 "Pfizer Technology" means Technology that is or was:
(a) developed by employees of or consultants to Pfizer alone or
jointly with third parties prior to the Effective Date; or
(b) acquired by purchase, license, assignment or to other means from
third parties by Pfizer prior to the Effective Date or since that date that is
not of Joint Technology.
1.11 "Abgenix Confidential Information" means all information about any
element of the Abgenix or Joint Technology which is disclosed by Abgenix to
Pfizer and designated "Confidential" in writing by Abgenix at the time of
disclosure or within thirty (30) days following disclosure, to the extent that
such information as of the date of disclosure to Pfizer is not (i) known to
Pfizer other than by virtue of a prior confidential disclosure to Pfizer by
Abgenix; or (ii) disclosed in published literature, or otherwise generally known
to the public
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through no fault or omission of Pfizer; or (iii) obtained from a third party
free from any obligation of confidentiality to Abgenix.
1.12 "Pfizer Confidential Information" means all information about any
element of Pfizer or Joint Technology which is disclosed by Pfizer to Abgenix
and designated "Confidential" in writing by Pfizer at the time of disclosure or
within thirty (30) days following disclosure to the extent that such information
as of the date of disclosure to Abgenix is not (i) known to Abgenix other than
by virtue of a prior confidential disclosure to Abgenix by Pfizer; or (ii)
disclosed in published literature, or otherwise generally known to the public
through no fault or omission of Abgenix; or (iii) obtained from a third party
free from any obligation of confidentiality to Pfizer.
1.13 "Valid Claim" means a claim within Patent Rights so long as such
claim shall not have been disclaimed by Pfizer (in the case of Patent Rights
within the Pfizer Technology) or by Abgenix (in the case of Patent Rights within
the Abgenix Technology) or both (in the case of Joint Patent Rights) and shall
not have been held invalid in a final decision rendered by a tribunal of
competent jurisdiction from which no appeal has been or can be taken.
1.14 "Patent Rights" shall mean:
(a) the Abgenix Patent Rights, the Abgenix-Controlled Patent Rights
and the Joint Patent Rights; and
(b) all patent rights in and to inventions within Pfizer Technology
including all the Valid Claims of patent applications, whether domestic or
foreign, claiming such patentable inventions, including all continuations,
continuations-in-part, divisions, and renewals, all letters patent granted
thereon, and all reissues, reexaminations and extensions thereof.
1.15 "Abgenix Patent Rights" shall mean:
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(a) the Valid Claims of Abgenix's patents and patent applications,
listed in Exhibit Al, and patents issuing on them, including any divisions,
continuation, continuation-in-part, renewal, extension, reexamination, reissue
or foreign counterpart thereof; and
(b) all patent rights in and to inventions within Abgenix Technology
including all the Valid Claims of patent applications, whether domestic or
foreign, claiming such patentable inventions, including all continuations,
continuations-in-part, divisions, and renewals, all letters patent granted
thereon, and all reissues, reexaminations and extensions thereof.
1.16 "Abgenix Controlled Patent Rights" shall mean the Valid Claims of
the licensed patent applications and patents listed on Exhibit A2, including all
continuations, continuations-in-part, divisions, and renewals, all letters
patent granted thereon, and all reissues, reexaminations, extensions and all
foreign counterparts thereof.
1.17 "Joint Patent Rights" shall mean all patent rights in and to
inventions within the Joint Technology, including all the Valid Claims of patent
applications, whether domestic or foreign, claiming such patentable inventions,
including all continuations, continuations-in-part, divisions, and renewals, all
letters patent granted thereon, and all reissues, reexaminations and extensions
thereof.
1.18 "Target Antigen" means the target molecule used as an immunogen for
the discovery of antibodies.
1.19 " Antibody Product" means a whole antibody, or a fragment thereof,
that binds to a particular Target Antigen and is derived from Abgenix Technology
pursuant to the Research Plan.
1.20 "Licensed Antibody Product" shall have the meaning defined in the
License Agreement.
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1.21 "Materials Transfer Agreement" means that certain Materials
Transfer Agreement entered into by and between Pfizer and Abgenix existing as of
September 25, 1997.
1.22 "License Agreement" means the License and Royalty Agreement
attached hereto as Exhibit C entered into by and between Pfizer and Abgenix as
of the Effective Date.
2. Collaborative Research Program
2.1.1 Purpose. Abgenix and Pfizer shall conduct the Research Program
throughout the Contract Period. All Technology in the Area developed in the
course of performing the Research Plan will become part of the Joint Technology.
The objective of the Research Program is to discover and develop Antibody
Products. The Target Antigen for this Agreement is [*].
2.1.2 Research Plan. The Research Plan is described in the attached
Exhibit B. Each new Research Plan, if any, for each succeeding Target Antigen,
in accordance with Section 9.6, shall be appended to Exhibit B and made part of
this Agreement. Additional research projects, determined to be needed by the
Research Committee will also be appended to Exhibit B and made part of this
Agreement in accordance with Section 2.2 below.
2.1.3 Exclusivity. Abgenix agrees that during the Contract Period,
Abgenix shall not conduct research itself or sponsor any other research, or
engage in any research sponsored by any third party to develop or commercialize
any protein, peptide, or antibodies that bind to the Target Antigen without
Pfizer's consent.
2.2 Research Committee
2.2.1 Purpose. Pfizer and Abgenix shall establish a Research
Committee (the "Research Committee"):
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(a) to review and evaluate progress under the Research Plan;
(b) to prepare the Research Plan, and any amendments thereto, for
any additional projects or Target Antigens; and
(c) to coordinate and monitor publication of research results
obtained from and the exchange of information and materials that relate to the
Research Program. (This function shall survive the termination of this
Agreement).
2.2.2 Membership.. Pfizer and Abgenix each shall appoint, in its sole
discretion, three members to the Research Committee. Substitutes may be
appointed at any time.
The members initially shall be:
Pfizer Appointees: [*]
[*]
[*]
Abgenix Appointees: [*]
[*]
[*]
2.2.3 Chair. The Research Committee shall be chaired by two co-
chairpersons, one appointed by Pfizer and the other appointed by Abgenix.
2.2.4 Meetings. The Research Committee shall meet at least
quarterly, at places selected by each party in turn and on dates mutually agreed
by the parties. The location of the first meeting of the Research Committee
shall be at Pfizer's election. Representatives of Pfizer or Abgenix or both, in
addition to members of the Research Committee, may attend such meetings at the
invitation of either party.
2.2.5 Minutes. The Research Committee shall keep accurate minutes of
its deliberations which record all proposed decisions and all actions
recommended or taken. Drafts of the minutes shall be delivered to all Research
*Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Committee members within five (5) business days after each meeting. The party
choosing the location for the meeting shall be responsible for the preparation
and circulation of the draft minutes. Draft minutes shall be edited by the
cochairpersons and shall be issued in final form only with their approval and
agreement.
2.2.6 Decisions. All technical decisions of the Research Committee
shall be made by majority of the members, with final authority residing with
Pfizer. Notwithstanding the foregoing or any other provision of this Agreement
(i) Research Plans may only be amended (and Research Plans for additional Target
Antigens adopted) as mutually agreed by Pfizer and Abgenix and approved by the
Research Committee, and (ii) except as Abgenix may otherwise agree, Abgenix
shall only be obligated under this Agreement to perform research activities in
accordance with such a Research Plan.
2.2.7 Expenses. Pfizer shall bear all expenses, including reasonable
travel, related to the participation of the designated members of the Research
Committee.
2.3 Reports and Materials.
2.3.1 Reports. During the Contract Period, Pfizer and Abgenix each
shall furnish to the Research Committee:
(a) summary written reports within fifteen (15) days after the end
of each stage of the Research Plan, commencing on the Effective Date, describing
the progress under the Research Plan; and
(b) comprehensive written reports within thirty (30) days after the
end of each year, describing in detail the work accomplished by it under the
Research Plan during the year and discussing and evaluating the results of such
work.
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2.3.2 Materials. Abgenix and Pfizer shall, during the Contract
Period, as a matter of course as described in the Research Plan, or upon each
other's written or oral request, furnish to each other samples of biochemical,
biological or synthetic chemical materials which are part of Pfizer Technology,
Abgenix Technology or Joint Technology and which are necessary for each party to
carry out its responsibilities under the Research Plan; provided, however, that
Abgenix shall, upon request, deliver to Pfizer samples of any material made
pursuant to the Research Plan. This will not include the transfer of
Xenomouse(TM) animals by Abgenix. To the extent that Pfizer requests and Abgenix
provides quantities of materials in excess of the quantities required to be
provided under the Research Plan, Pfizer shall reimburse Abgenix for the
reasonable costs of such materials as per Section 3.2.2.
2.3.3 The materials transferred by one party (the "Transferor") to
the other (the "Transferee") shall remain the property of the respective owner
of such materials prior to such transfer, and the transfer of physical
possession of materials to the Transferee, and/or possession or use by the
Transferee, of such materials shall not be, nor be construed as, a sale, lease,
offer to sell or lease, or other transfer of title to such transferred
materials. The Transferee shall retain control over the Transferor's materials
provided to the Transferee hereunder and shall not transfer the Transferor's
materials to any third party without the Transferor's written consent.
2.4 Laboratory Facilities and Personnel. Abgenix shall provide suitable
laboratory facilities, equipment and personnel for the work to be done by
Abgenix in carrying out the Research Program.
2.5 Diligent Efforts. Pfizer and Abgenix each shall use reasonably
diligent efforts to achieve the objectives of the Research Program. Abgenix will
use reasonably diligent efforts to achieve the objectives listed in the Research
Plan
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and Pfizer will use reasonably diligent efforts to assist Abgenix in each
Research Plan.
3. Funding the Research Program.
3.1.1 Pfizer will fund the research to be performed by Abgenix, pursuant
to this Agreement, by making payments to Abgenix within thirty (30) days of the
completion of each event as described in the Research Plan, according to the
following schedule:
EVENT AMOUNT
----- ------
A. Execution of this Agreement [*]
B. [*]
C. [*] [*]
3.1.2 [*].
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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3.2 Other Payments.
3.2.1 [*], Pfizer shall pay Abgenix the amount of [*].
3.2.2 [*].
3.2.3 [*].
3.3. Each payment pursuant to this Agreement shall be paid by Pfizer in
U.S. currency by wire transfer in immediately available funds to an account
designated by Abgenix, or by other mutually acceptable means within thirty (30)
days after receipt and acceptance by Pfizer of the invoice from Abgenix.
3.4 Abgenix shall keep for three (3) years from the conclusion of each
year complete and accurate records of its expenditures of payments received by
it from Pfizer under Section 3.2.3. The records shall conform to good accounting
principles as applied to a similar company similarly situated. Pfizer shall have
the right at its own expense during the term of this Agreement and during the
subsequent three-year period to appoint an independent certified public
accountant reasonably acceptable to Abgenix to inspect said records to verify
the accuracy of such expenditures, pursuant to each Research Plan. Upon
reasonable notice by Pfizer, Abgenix shall make its records available for
inspection by the independent certified public accountant during regular
business hours at the place
*Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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or places where such records are customarily kept, to verify the accuracy of the
expenditures. This right of inspection shall not be exercised more than once in
any calendar year and not more than once with respect to records covering any
specific period of time. All information concerning such expenditures, and all
information learned in the course of any audit or inspection, shall be deemed to
be Abgenix Confidential Information, except to the extent that it is necessary
for Pfizer to reveal the information in order to enforce any rights it may have
pursuant to this Agreement or if disclosure is required by law. The failure of
Pfizer to request verification of any expenditures before or during the
three-year period shall be considered acceptance by Pfizer of the accuracy of
such expenditures, and Abgenix shall have no obligation to maintain any records
pertaining to such report or statement beyond such three-year period. The
results of such inspection, if any, shall be binding on the parties.
4. Treatment of Confidential Information
4.1 Confidentiality
4.1.1 Pfizer and Abgenix each recognize that the other's
Confidential Information constitutes highly valuable, confidential information.
Subject to the terms and conditions of the License and Royalty Agreement between
the parties of even date with this Agreement (the "License Agreement"), the
obligations set forth in Section 4.3 and the publication rights set forth in
Section 4.2, Pfizer and Abgenix each agree that during the term of this
Agreement and for five (5) years thereafter, it will keep confidential, and will
cause its Affiliates to keep confidential, all Abgenix Confidential Information
or Pfizer Confidential Information, as the case may be, that is disclosed to it,
or to any of its Affiliates pursuant to this Agreement. Neither Pfizer nor
Abgenix nor any of their respective Affiliates shall use such Confidential
Information of the
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other party except as expressly permitted in this Agreement. For the purposes of
this Section 4, it is understood that Joint Technology shall be deemed
Confidential Information of both parties.
4.1.2 Pfizer and Abgenix each agree that any disclosure of the
other's Confidential Information to any officer, employee or agent of the other
party or of any of its Affiliates shall be made only if and to the extent
necessary to carry out its responsibilities under this Agreement and shall be
limited to the maximum extent possible consistent with such responsibilities.
Pfizer and Abgenix each agree not to disclose the other's Confidential
Information to any third parties under any circumstance without written
permission from the other party. Each party shall take such action, and shall
cause its Affiliates to take such action, to preserve the confidentiality of
each other's Confidential Information as it would customarily take to preserve
the confidentiality of its own Confidential Information. Each party, upon the
other's request, will return all the Confidential Information disclosed to it by
the other party pursuant to this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request upon the termination of this
Agreement except for one (1) copy which may be kept for the purpose of complying
with continuing obligations under this Agreement.
4.1.3 Abgenix and Pfizer each represent that all of its employees,
and any consultants to such party, participating in the Research Program who
shall have access to Joint Technology, the Technology of the other (Pfizer
Technology or Abgenix Technology, as the case may be) or Confidential
Information of the other (Pfizer Confidential Information or Abgenix
Confidential Information, as the case may be) are bound by agreement to maintain
such information in confidence.
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4.2 Publication. Notwithstanding any matter set forth with
particularity in this Agreement to the contrary, results obtained in the course
of the Research Program may be submitted for publication following scientific
review by the Research Committee and subsequent approval by Abgenix's and
Pfizer's managements, which approval shall not be unreasonably withheld. After
receipt of the proposed publication by both Pfizer's and Abgenix's managements
written approval or disapproval shall be provided within thirty (30) days for a
manuscript, within fourteen (14) days for an abstract for presentation at, or
inclusion in the proceedings of a scientific meeting, and within fourteen (14)
days for a transcript of an oral presentation to be given at a scientific
meeting.
4.3 Publicity. Except as required by law, neither party may disclose the
terms of this Agreement nor the research described in it without the written
consent of the other party, which consent shall not be unreasonably withheld.
4.4 Permitted Disclosure.
4.4.1 Disclosure Required by Law. If either party is requested to
disclose the Confidential Information in connection with a legal or
administrative proceeding or is otherwise required by law to disclose the
Confidential Information, such party will give the other party prompt notice of
such request. The disclosing party may seek an appropriate protective order or
other remedy or waive compliance with the provisions of this Agreement. If such
party seeks a protective order or other remedy, the other party will cooperate.
If such party fails to obtain a protective order or waive compliance with the
relevant provisions of this Agreement, the other party will disclose only that
portion of Confidential Information which its legal counsel determines it is
required to disclose.
4.4.2 Disclosure of Inventions. Each party shall promptly inform the
other about all inventions in the Area within the Joint Technology that are
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made in the course of carrying out the Research Program by employees of, or
consultants to, either of them solely, or jointly with employees of, or
consultants to the other.
4.5 Restrictions on Transferring Materials. Abgenix recognizes that the
biological and biochemical materials which are part of Pfizer Technology or
Joint Technology, represent valuable commercial assets. Therefore, throughout
the Contract Period and for five (5) years thereafter, Abgenix agrees not to
transfer such materials to any third party, unless prior written, consent for
any such transfer is obtained from Pfizer.
5. Intellectual Property Rights. The following provisions relate to
rights in the intellectual property developed by or for Abgenix or Pfizer, or
both, during the course of carrying out the Research Program.
5.1 Ownership. All Abgenix Confidential Information and Abgenix
Technology shall be owned by Abgenix. All Pfizer Confidential Information and
Pfizer Technology shall be owned by Pfizer. All Joint Technology shall be
jointly owned by Abgenix and Pfizer except for the hybridoma cells generated
during the course of conducting the Research Program ("Hybridoma Technology")
which shall be owned by Abgenix.
5.2 Grants of Research Licenses.
5.2.1 Abgenix and Pfizer each grants to the other a nonexclusive,
irrevocable, worldwide, royalty-free, perpetual license, including the right to
grant sublicenses to Affiliates, to make and use Confidential Information, Joint
Technology and joint Patent Rights for all research purposes other than the sale
or manufacture for sale of products or processes except for the following:
(i) this license does not include the Xenomouse(TM) animals owned by
Abgenix; and
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(ii) neither party can use an Antibody Product derived from the Joint
Technology to identify or model the structure of a Target Antigen or the
structure of the Antibody Product to which the Target Antigen is bound, to
design a molecule of pharmaceutical therapeutic value which is not an antibody.
5.2.2 Abgenix grants to Pfizer a co-exclusive, irrevocable,
worldwide, royalty-free, perpetual license, including the right to grant
sublicenses to Affiliates, to make and use Hybridoma Technology for all research
purposes other than the sale or manufacture for sale of products or processes.
6. Provisions Concerning the Filing, Prosecution and Maintenance of Joint Patent
Rights. The following provisions relate to the filing, prosecution and
maintenance of Joint Patent Rights during the term of this Agreement:
6.1 Filing, Prosecution and Maintenance by Abgenix. With respect to
Joint Patent Rights in which Abgenix employees or consultants, alone or together
with Pfizer employees, or consultants are named as inventors, Abgenix shall have
the exclusive right and obligation :
(a) to file applications for letters patent on patentable inventions
included in Joint Patent Rights; provided, however, that Abgenix shall consult
with Pfizer regarding countries in which such patent applications should be
filed and shall file patent applications in those countries where Pfizer
requests that Abgenix file such applications; and, further provided, that
Abgenix, at its option and expense, may file in countries where Pfizer does not
request that Abgenix file such applications;
(b) to take all reasonable steps to prosecute all pending and new
patent applications included within Joint Patent Rights;
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(c) to respond to oppositions, nullity actions, re-examinations,
revocation actions and similar proceedings filed by third parties against the
grant of letters patent for such applications;
(d) to maintain in force any letters patent included in Joint Patent
Rights by duly filing all necessary papers and paying any fees required by the
patent laws of the particular country in which such letters patent were granted;
and
(e) to cooperate fully with, and take all necessary actions
requested by, Pfizer in connection with the preparation, prosecution and
maintenance of any letters patent included in Joint Patent Rights.
Abgenix shall notify Pfizer in a timely manner of any decision to
abandon a pending patent application or an issued patent included in Joint
Patent Rights. Thereafter, Pfizer shall have the option, at its expense, of
continuing to prosecute any such pending patent application or of keeping the
issued patent in force.
6.1.1 Copies of Documents. Abgenix and Pfizer shall provide to each
other copies of all patent applications that are part of Joint Patent Rights
prior to filing, for the purpose of obtaining substantive comment of the other
party's patent counsel. Abgenix and Pfizer shall also provide to the other
copies of all documents relating to prosecution of all such patent applications
in a timely manner and shall provide to the other every six (6) months a report
detailing the status of all patent applications that are a part of Joint Patent
Rights.
6.1.2 Reimbursement of Costs for Filing Prosecuting and Maintaining
Joint Patent Rights, Within thirty (30) days of receipt of invoices from
Abgenix, Pfizer shall reimburse Abgenix for all the costs of filing,
prosecuting, responding to opposition and maintaining patent applications and
patents in countries where Pfizer requests that patent applications be filed,
prosecuted and maintained. Such reimbursement shall be in addition to other
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funding payments under this Agreement and shall include such costs of all
activities described in 6.1 (a)-(e) above. However, Pfizer may, upon sixty (60)
days notice, request that Abgenix discontinue filing or prosecution of certain
patent applications in any country and discontinue reimbursing Abgenix for the
costs of filing, prosecuting, responding to opposition or maintaining such
patent application or patent in any country. Abgenix shall pay all costs in
those countries in which Pfizer requests that Abgenix not file, prosecute or
maintain patent applications and patents, but in which Abgenix, at its option,
elects to do so.
6.1.3 Pfizer shall have the right to file on behalf of and as an
agent for Abgenix all applications for, and take all actions necessary to obtain
patent extensions pursuant to 35 USC Section 156 and foreign counterparts with
respect to the Joint Patent Rights to the extent that such extensions are
available by reason of a Licensed Antibody Product under the License Agreement
during the period the License Agreement is in effect. Abgenix agrees, to sign,
such further documents and take such further actions as may be requested by
Pfizer in this regard, at Pfizer's expense
6.2 Filing, Prosecution and Maintenance by Pfizer. With respect to
Patent Rights in which Pfizer employees or consultants alone are named as
inventors, Pfizer shall have those rights and duties ascribed to Abgenix in
Section 6.1., except that Pfizer will bear all related expenses.
6.3 Neither party may disclaim a Valid Claim within Joint Patent Rights
without the consent of the other.
7. Acquisition of Rights from Third Parties.
(a) During the Contract Period, Abgenix and Pfizer shall each
promptly notify each other of any and all opportunities to acquire in any manner
from third parties, technology or patents or information which it elects to use
in
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the course of performing the Research Program. Abgenix and Pfizer shall decide
if such rights should be acquired in connection with the Research Program and,
if so, whether by Abgenix, Pfizer or both, it being understood that nothing
herein shall obligate either party to obtain such rights or, if it does acquire
such rights, to make such rights available for use in the Research Program. If
acquired such rights shall become part of the Confidential Information,
Technology or Patent Rights, whichever is appropriate, of the acquiring party or
Joint Technology, as the case may be.
8. Other Agreements. Concurrently with the execution of this Agreement,
Abgenix and Pfizer shall enter into the License Agreement appended to and made
part of this Agreement as Exhibit C and the Stock Purchase Agreement appended to
and made a part of this Agreement as Exhibit D. This Agreement, the Stock
Purchase Agreement and the License Agreement are the sole agreements with
respect to the subject matter and supersede all other agreements and
understandings between the parties with respect to same. The Materials Transfer
Agreement is hereby terminated and superseded by this Agreement, provided,
however, that Abgenix shall not (except as otherwise authorized pursuant to this
Agreement or the License Agreement) disclose or license to any third party
inventions made using the antigen materials provided to Abgenix under the
Materials Transfer Agreement without the prior agreement of Pfizer.
9. Term, Termination and Disengagement.
9.1 Term. Unless sooner terminated, as provided below or extended, by
mutual agreement of the parties, this Agreement shall expire on December 21,
1999.
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9.2 Events of Termination. The following events shall constitute events
of termination ("Events of Termination"):
(a) any written representation or warranty by Abgenix or Pfizer, or
any of its officers, made under or in connection with this Agreement shall prove
to have been incorrect in any material respect when made;
(b) Abgenix or Pfizer shall fail in any material respect to perform
or observe any term, covenant or understanding contained in this Agreement or in
any of the other documents or instruments delivered pursuant to, or concurrently
with, this Agreement, and any such failure shall remain unremedied for thirty
(30) days after written notice to the failing party.
9.3 Termination.
9.3.1 Upon the occurrence of any Event of Termination, the party not
responsible may, by notice to the other party, terminate this Agreement.
9.3.2 If Pfizer terminates this Agreement pursuant to
Section 9.3.1, the License Agreement shall not automatically terminate, but
instead shall terminate or expire in accordance with its terms. If Abgenix
terminates this Agreement pursuant to Section 9.3.1, the License Agreement
shall terminate immediately.
9.4 Termination of this Agreement by either party, with or without
cause, will not terminate the licenses granted pursuant to Section 5.2.
9.5 Termination of this Agreement for any reason shall be without
prejudice to:
(a) the rights and obligations of the parties provided in Sections
2.3.3, 4, 6, 12 and 15;
(b) Abgenix's right to receive all payments accrued under Section 3;
or
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(c) any other remedies which either party may otherwise have.
9.6 Option for Additional Target-Antigens by Pfizer. Pfizer shall have
the option, in its sole, unfettered discretion, to discuss with Abgenix the
research and development of up to two (2) Target Antigens, in addition to [*]
during the term of this Agreement; provided, however, that Abgenix shall not be
obligated to accept any such additional Target Antigen proposed by Pfizer or
grant any rights or obligations with respect to such additional Target Antigens
or antibodies to them. This option shall expire if not exercised by Pfizer on or
before the last day of the twenty fourth month this Agreement is in effect. If
Pfizer exercises this option, by notice to Abgenix, and Abgenix accepts either
of both of the Target Antigens, the parties shall adopt a Research Plan during
the ensuing ninety (90) day period which shall include the funding payments not
to exceed those set forth in Sections 3.1 and 3.2 for the next ensuing two (2)
year period. All other terms and conditions of this Agreement shall otherwise
remain in full force.
10. Representations and Warranties. Abgenix and Pfizer each represents
and warrants as follows:
10.1 It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware, is qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification and has all requisite power and authority, corporate or otherwise,
to conduct its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform this Agreement.
10.2 The execution, delivery and performance by it of this Agreement
have been duly authorized by all necessary corporate action and do not and will
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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not (a) require any consent or approval of its stockholders, (b) violate any
provision of any law, rule, regulations, order, writ, judgment, injunctions,
decree, determination award presently in effect having applicability to it or
any provision of its certificate of incorporation or by-laws or (c) result in a
breach of or constitute a default under any material agreement, mortgage, lease,
license, permit or other instrument or obligation to which it is a party or by
which it or its properties may be bound or affected.
10.3 This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws, from time to time in effect,
affecting creditor's rights generally.
10.4 It is not under any obligation to any person, or entity,
contractual or otherwise, that is conflicting or inconsistent in any respect
with the terms of this Agreement or that would impede the diligent and complete
fulfillment of its obligations.
10.5 It has good and marketable title to or valid leases or licenses
for, all of its properties, rights and assets necessary for the fulfillment of
its responsibilities under the Research Program, subject to no claim of any
third party other than any relevant lessors or licensors.
10.6 ALL MATERIALS PROVIDED BY ABGENIX UNDER THE RESEARCH PROGRAM
(INCLUDING WITHOUT LIMITATION ALL HYBRIDOMAS AND ANTIBODY PRODUCTS) ARE PROVIDED
"AS IS" EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 10, ABGENIX MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES,
INCLUDING WITHOUT
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LIMITATION, ANY WARRANTIES AS TO THE PATENT RIGHTS. MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, VALIDITY, NONINFRINGEMENT OR ENFORCABILITY.
11. Covenants of Abgenix and Pfizer Other Than Reporting Requirements.
Throughout the Contract Period, Abgenix and Pfizer each shall:
11.1 maintain and preserve its corporate existence, rights, franchises
and privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in good standing in each jurisdiction in
which such qualification is from time to time necessary or desirable in view of
their business and operations or the ownership of their properties.
11.2 comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any government authority to
the extent necessary to conduct the Research Program, except for those laws,
rules, regulations, and orders it may be contesting in good faith.
12. Indemnification. Pfizer and Abgenix will indemnify each other for
damages, settlements, costs, legal fees and other expenses incurred in
connection with a claim by a third party against either party based on any
action or omission of the indemnifying party's agents, employees, or officers
related to its obligations under this Agreement; provided, however, that the
foregoing shall not apply (i) if the claim is found to be based upon the
negligence, recklessness or willful misconduct of the party seeking
indemnification; or (ii) if such party falls to give the other party prompt
notice of any claim it receives and such failure materially prejudices the other
party with respect to any claim or action to which its obligation pursuant to
this Section applies. Notwithstanding the foregoing, Abgenix shall not indemnify
Pfizer for claims arising from the sale of Antibody
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Products or exercise of rights granted to Pfizer under Section 5.2, or the
License Agreement (including without limitation product liability claims) and
Pfizer shall indemnify Abgenix with respect to such claims and to claims arising
from Joint Patent Rights, Pfizer Patent Rights, Joint Technology and Pfizer
Technology except for intellectual property claims with respect to Abgenix
Patent Rights, Abgenix Controlled-Patent Rights or Abgenix Technology. Each
party, in its sole discretion, shall choose legal counsel, shall control the
defense of such claim or action and shall have the right to settle same on such
terms and conditions it deems advisable; provided however, it shall obtain the
other party's prior consent to such part of any settlement which requires
payment or other action by the other party or is likely to have a material
adverse effect on the other party's business.
13. Notices. All notices shall be in writing mailed via certified mail,
return receipt requested, courier, or facsimile transmission addressed as
follow, or to such other address as may be designated from time to time:
If to Pfizer: Pfizer Central Research
Xxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxx, President
with copy to: Xxxxxx X. Xxxxxxxxx, General Counsel
If to Abgenix: Abgenix, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
cc:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
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Notices shall be deemed given as of the date sent.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Miscellaneous.
15.1 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective legal representatives,
successors and permitted assigns.
15.2 Headings. Paragraph headings are inserted for convenience of
reference only and do not form a part of this Agreement,
15.3 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original.
15.4 Amendment, Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.
15.5 No Third Party Beneficiaries. No third party including any employee
of any party to this Agreement, shall have or acquire any rights by
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reason of this Agreement. Nothing contained in this Agreement shall be deemed to
constitute the parties partners with each other or any third party.
15.6 Assignment and Successors. This Agreement may not be assigned by
either party, except that each party may assign this Agreement and the rights
and interests of such party, in whole or in part, to any of its Affiliates, any
purchaser of all or substantially all of its assets or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.
15.7 Force Majeure. Neither Pfizer nor Abgenix shall be liable for
failure of or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or delay
is due to natural disasters or any causes reasonably beyond the control of
Pfizer or Abgenix.
15.8 Severability. If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of the
Agreement shall not be affected.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
PFIZER INC
By: [SIG]
------------------------------------
Title: President, Control Research Div.
---------------------------------
ABGENIX, INC.
By: [SIG]
------------------------------------
Title: Vice President,
Corporate Development
cc: Pfizer Inc, Legal Division, Xxxxxx, XX 00000
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EXHIBIT A
EXHIBIT A1
ABGENIX PATENT RIGHTS
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT A1 (CONTINUED)
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT A2
ABGENIX CONTROLLED PATENT RIGHTS
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT A2 (CONTINUED)
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
---END---
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EXHIBIT B
ABGENIX, INC.
CONFIDENTIAL
Pfizer Research Plan
November 26, 1997
Page 1
RESEARCH PLAN
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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ABGENIX, INC.
CONFIDENTIAL
Pfizer Research Plan
November 26, 1997
Page 2
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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ABGENIX, INC.
CONFIDENTIAL
Pfizer Research Plan
November 26, 1997
Page 3
[*]
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT C
LICENSE AND ROYALTY AGREEMENT
This LICENSE AND ROYALTY AGREEMENT is entered into as of December 22, 1997
(the "Effective Date") by and between PFIZER INC ("Pfizer"), a Delaware
corporation, having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and its Affiliates and ABGENIX, INC. ("Abgenix"), a Delaware corporation, having
an office at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000;
WHEREAS, Pfizer desires to obtain an exclusive license under Abgenix's
right, title and interest in the Patent Rights so that Pfizer can manufacture,
use, sell, offer for sale and import the Licensed Antibody Products; and
WHEREAS, Abgenix is willing to grant such license;
Therefore, in consideration of the mutual covenants and promises set forth
in this Agreement, the parties agree as follows:
1. DEFINITIONS.
The capitalized terms used in this Agreement and not defined elsewhere in
it shall have the meanings specified for such terms in this Section 1 and in the
Research Agreement.
1.1 "RESEARCH AGREEMENT" means the Collaborative Research Agreement
between Pfizer and Abgenix effective December 22, 1997.
1.2 "NET SALES" means the gross amount invoiced by Pfizer, its
37
Affiliates, or any sublicensee of Pfizer for sales to a third party or parties
of Licensed Antibody Products, less [*] invoices as a separate item.
1.3 "LICENSED ANTIBODY PRODUCT" means any Antibody Product, (i) the
manufacture, use, sale, offer for sale or import would be within the scope of
any Valid Claim within the Patent Rights or (ii) is developed using a method or
using a transgenic animal, wherein the use of such method or such transgenic
animal would be within the scope of any Valid Claim within the Patent Rights.
1.4 "SUBLICENSEE" shall mean a third party who has been granted a
sublicense to make, use, sell, offer for sale or import Licensed Antibody
Products. It is understood that the term "sublicensee" shall have the foregoing
meaning whether or not such term is capitalized herein.
2. OPTION, GRANT OF LICENSE, TERM, RIGHTS AND OBLIGATIONS.
2.1 OPTION.
For a period of [*] from the Effective Date, Pfizer shall have the
exclusive option to acquire the License described in Section 2.2 below. Such
option will be exercised in writing by Pfizer to Abgenix.
2.2 LICENSE GRANTED TO PFIZER UNDER THE PATENT RIGHTS.
If the option described in Section 2.1 is exercised by Pfizer,
Abgenix will grant to Pfizer:
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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38
(a) an exclusive, worldwide license, including the right to grant
sublicenses, to manufacture, use, sell, offer for sale and import Licensed
Antibody Products under all Abgenix's right, title and interest in the Joint
Patent Rights;
(b) an exclusive, worldwide license, to manufacture, use, sell,
offer for sale and import Licensed Antibody Products under all Abgenix's right,
title and interest in the Abgenix Patent Rights for human medical uses (subject
to the non-exclusive grant of rights to GenPharm International Inc. under that
certain Cross License Agreement effective as of March 26, 1997 by and among
Abgenix, GenPharm. and other parties named therein);
(c) a non-exclusive worldwide license to manufacture, use, sell,
offer for sale and import Licensed Antibody Products under all Abgenix's right,
title and interest in the Abgenix-Controlled Patent Rights for human medical
uses.
The licenses described above in (a), (b) and (c) shall be collectively
referred to herein as the "License". Pfizer acknowledges and agrees that its
rights granted under this Agreement and the Collaborative Research Agreement
with respect to the Abgenix Patent Rights and the Abgenix-Controlled Patent
Rights licensed from Xenotech L.P. are subject to the terms and conditions
contained in agreements between Abgenix and Xenotech L.P. including the right to
prosecute, maintain and defend certain patent rights.
2.3 TERM OF LICENSE GRANT AND PAYMENT OF ROYALTIES.
Unless terminated earlier as provided below, the License in a
country shall commence on the date that Pfizer exercises its option pursuant to
Section 2.1 and shall terminate on the date of the last to expire of the Patent
Rights in such country.
2.4 PFIZER OBLIGATIONS.
2.4.1 Pfizer shall use reasonably diligent efforts to exploit
Licensed
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Antibody Products [*].
2.4.2 If Pfizer grants a sublicense pursuant to this Section 2, Pfizer
shall guarantee that any sublicensee fulfills all of Pfizer's obligations under
this Agreement; provided, however, that Pfizer shall not be relieved of its
obligations pursuant to this Agreement.
2.4.3 Pfizer shall not initiate any human clinical trial involving a
Licensed Antibody Product without exercising the option to a license pursuant to
Section 2. 1.
2.5 TECHNICAL ASSISTANCE.
Abgenix shall provide to Pfizer or any sublicensee of Pfizer, at
Pfizer's request and expense, any agreed technical assistance reasonably
necessary to enable Pfizer or such sublicensee to manufacture, use, sell, offer
for sale or import each Licensed Antibody Product and to enjoy fully all the
rights granted to Pfizer pursuant to this Agreement; provided, however, that
Abgenix is reasonably capable of providing that assistance. Pfizer shall
reimburse Abgenix's direct and indirect costs of providing such assistance.
3. MILESTONE PAYMENTS, ROYALTIES, PAYMENTS OF ROYALTIES, ACCOUNTING FOR
ROYALTIES, RECORDS.
3.1 Pfizer shall pay Abgenix, within [*] of the exercise of the option
described in 2.1 by Pfizer to obtain an exclusive license from Abgenix, a [*].
Payment shall be made in US currency by wire transfer in immediately available
funds to an account designated by Abgenix, or by other mutually acceptable
means. Pfizer shall be obligated to make this payment only once with respect to
the first Licensed Antibody Product for a Target Antigen affected by the
License, so that additional
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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Licensed Antibody Products for the same Target Antigen will not require Pfizer
to make additional payments.
3.2 PATENT RIGHTS.
3.2.1 Pfizer shall pay Abgenix a royalty based on the Net Sales of
each Licensed Antibody Product. Such royalty shall be paid with respect to each
country of the world from the date of the first commercial sale (the date of the
invoice of Pfizer or any sublicensee of Pfizer with respect to such sale) of
such Licensed Antibody Product in each such country until the expiration of the
last Patent Right to expire with respect to each such country and each such
Licensed Antibody Product.
3.2.2 If the manufacture and sale of an Antibody Product [*], Pfizer
will pay to Abgenix a royalty based on the Net Sales of each Antibody Product in
each such country for ten (10) years after the first commercial sale of such
Antibody Product in such country.
3.3 ROYALTY RATES.
3.3.1 Pfizer shall pay Abgenix a royalty for the sale of each
Licensed Antibody Product under Section 2.2 as set forth in Section 3.2; [*] for
such Licensed Antibody Product for such calendar year, the
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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[*]. Notwithstanding the [*] in the United States. As used in this Section
3.3.1, the [*] shall mean the average [*].
3.3.2 The royalty paid by Pfizer to Abgenix shall be [*] with respect to
Licensed Antibody Products. It is understood that the royalty rate specified in
this Section 3.3.2 is subject to [*] below. Notwithstanding those sections, or
any other provisions of this Agreement, in no event shall the royalty paid to
Abgenix with respect to Net Sales of a Licensed Antibody Product [*] under
Section 4.4 [*]. In the event that an Antibody Product unit is made, used or
sold, in a country in which there [*] shall be made.
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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3.4 RENEGOTIATION OF ROYALTY RATES.
The parties acknowledge that the royalty rates set forth in Section
3.3 are based on the expectation that Licensed Antibody Products will be
administered to patients intravenously. If Pfizer identifies or develops a
different method of administration ("New Dosage Form") with respect to a
Licensed Antibody Product or Antibody Products which represents a commercial
opportunity for Pfizer or improves the safety or efficacy of such Licensed
Antibody Product, the parties may negotiate, as mutually agreed, a new royalty
rate for such Licensed Antibody Product in such New Dosage Form to account for
development costs and changes in the cost of goods, selling price and projected
annual Net Sales. It is understood, however, that the royalty rate specified in
Section 3.3.2 shall be modified only as Pfizer and Abgenix mutually agree.
3.5 PAYMENT DATES.
Royalties shall be paid by Pfizer on Net Sales within sixty (60)
days after the end of each calendar quarter in which such Net Sales are made.
Such payments shall be accompanied by a statement showing the Net Sales of each
Licensed Antibody Product by Pfizer or any sublicensee of Pfizer in each
country, the applicable royalty rate for such Licensed Antibody Product, and a
calculation of the amount of royalty due, including any offsets.
3.6 ACCOUNTING.
The Net Sales used for computing the royalties payable to Abgenix by
Pfizer shall be computed and paid in US dollars by wire transfer in immediately
available funds to a U.S. account designated by Abgenix, or by other mutually
acceptable means. For purposes of determining the amount of royalties due, the
amount of Net Sales in any foreign currency shall be computed by (a) converting
such amount into U.S. dollars at the prevailing commercial rate of exchange for
purchasing dollars with such foreign currency as published in the
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00
Xxxx Xxxxxx Journal for the close of the last business day of the calendar
quarter for which the relevant royalty payment is to be made by Pfizer and (b)
deducting the amount of any governmental tax, duty, charge, or other fee
actually paid in respect of such conversion into, and remittance of U.S.
dollars.
3.7 RECORDS.
Pfizer shall keep for three (3) years from the date of each payment of
royalties complete and accurate records of sales by Pfizer of each Licensed
Antibody Product in sufficient detail to allow the accruing royalties to be
determined accurately. Abgenix shall have the right for a period of [*]
after receiving any report or statement with respect to royalties due and
payable to appoint at its expense an independent certified public accountant
reasonably acceptable to Pfizer to inspect the relevant records of Pfizer to
verify such report or statement. Pfizer shall make its records available for
inspection by such independent certified public accountant during regular
business hours at such place or places where such records are customarily kept,
upon reasonable notice from Abgenix, to verify the accuracy of the reports and
payments. Such inspection right shall not be exercised more than once in any
calendar year nor more than once with respect to sales in any given period.
Abgenix agrees to hold in strict confidence all information concerning royalty
payments and reports, and all information learned in the course of any audit or
inspection, except to the extent necessary for Abgenix to reveal such
information in order to enforce its rights under this Agreement or if disclosure
is required by law. The failure of Abgenix to request verification of any report
or statement during said three-year period shall be considered acceptance of the
accuracy of such report, and Pfizer shall have no obligation to maintain records
pertaining to such report or statement beyond said three-year period. The
results of each inspection, if any, shall be binding on both parties.
*CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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3.8 MILESTONE PAYMENTS. Pfizer shall pay Abgenix, within [*] of the
completion of each event set forth below ("Event"), the payment listed opposite
that Event. Payments shall be made in US dollars by wire transfer in immediately
available funds to a U.S. bank account designated by Abgenix, or other mutually
acceptable means. Pfizer shall be obligated to make each payment only once with
respect to each Licensed Antibody Product affected by an Event; provided,
however, that such payment for such Event shall not be due with respect to any
subsequent Licensed Antibody Product directed to a Target Antigen which has
previously been the subject of the same Event. All payments made by Pfizer
pursuant to this Section 3.8 with respect to a Licensed Antibody Product shall
[*] of such Licensed Antibody Product; provided, however, that [*] in any
calendar year with respect to such Licensed Antibody Product shall [*]
EVENT AMOUNT
----- ------
[*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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For the purposes of the foregoing, [*] shall mean [*]
shall mean [*]
4. LEGAL ACTION.
4.1 ACTUAL OR THREATENED DISCLOSURE OR INFRINGEMENT.
When information comes to the attention of Pfizer to the effect
that any Joint Patent Rights relating to a Licensed Antibody Product have been
or are threatened to be unlawfully infringed, Pfizer shall have the right at its
expense to take such action as It may deem necessary to prosecute or prevent
such unlawful infringement, including the right to bring or defend any suit,
action or proceeding involving any such infringement. Pfizer shall notify
Abgenix promptly of the receipt of any such information and of the commencement
of any such suit, action or proceeding. If Pfizer determines that it is
necessary or desirable for Abgenix to join any such suit, action or proceeding,
Abgenix shall, at Pfizer's expense, execute all papers and perform such other
acts as may be reasonably required to permit Pfizer to commence such action,
suit or proceeding in which case Pfizer shall hold Abgenix free, clear and
harmless from any and all costs and expenses of litigation, including attorneys
fees. If Pfizer brings a suit, it shall have the night first to reimburse itself
out of any sums recovered in such suit or in its settlement for all costs and
expenses, including attorney's fees, related to such suit or settlement, and
[*] of any funds that
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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shall remain from said recovery shall be paid to Abgenix and the balance of such
funds shall be retained by Pfizer. If Pfizer does not, within [*] after giving
notice to Abgenix of the above-described Information, notify Abgenix of Pfizer's
intent to bring suit against any infringer, Abgenix shall have the right to
bring suit for such alleged infringement, but it shall not be obligated to do
so, and may join Pfizer as party plaintiff, if appropriate, in which event
Abgenix shall hold Pfizer free, clear and harmless from any and all costs and
expenses of such litigation, including attorney's fees, and any sums recovered
in any such suit or in its settlement shall belong to Abgenix. However, [*] of
any such sums received by Abgenix, after deduction of all costs and expenses
related to such suit or settlement, including attorney's fees paid, shall be
paid to Pfizer. Each party shall always have the right to be represented by
counsel of its own selection and at its own expense in any suit instituted by
the other for infringement under the terms of this Section. If Pfizer lacks
standing and Abgenix has standing to bring any such suit, action or proceeding,
then Abgenix shall do so at the request of Pfizer and at Pfizer's expense.
4.2 DEFENSE OF INFRINGEMENT CLAIMS.
Abgenix will cooperate with Pfizer at Pfizer's expense in the
defense of any suit, action or proceeding against Pfizer or any sublicensee of
Pfizer alleging the infringement of the intellectual property rights of a third
party by reason of the use of Patent Rights in the manufacture, use or sale of
the Licensed Antibody Product. Pfizer shall give Abgenix prompt written notice
of the commencement of any such suit, action or proceeding or claim of
infringement and will furnish Abgenix a copy of each communication relating to
the alleged infringement. Abgenix shall give to Pfizer all authority (including
the right to exclusive control of the defense of any such suit, action or
proceeding and the
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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exclusive right after consultation with Abgenix, to compromise, litigate, settle
or otherwise dispose of any such suit, action or proceeding), at Pfizer's
expense, including by providing information and assistance necessary to defend
or settle any such suit, action or proceeding; provided, however, Pfizer shall
obtain Abgenix's prior consent to such part of any settlement which contemplates
payment or other action by Abgenix or has a material adverse effect on Abgenix's
business. If the parties agree that Abgenix should institute or join any suit,
action or proceeding pursuant to this Section, Pfizer may, at Pfizer's expense,
join Abgenix as a defendant if necessary or desirable, and Abgenix shall execute
all documents and take all other actions, including giving testimony, which may
reasonably be required in connection with the prosecution of such suit, action
or proceeding.
4.3 HOLD HARMLESS.
Abgenix agrees to defend, protect, indemnify and hold harmless
Pfizer and any sublicensee of Pfizer, from and against any loss or expense
arising from any proven claim of a third party that it has been granted rights
by Abgenix that Pfizer or any sublicensee of Pfizer in exercising their rights
granted to Pfizer by Abgenix pursuant to this Agreement, has infringed upon such
rights granted to such third party by Abgenix.
4.4 THIRD PARTY LICENSES.
If the manufacture, use or sale by Pfizer of a Licensed Antibody
Product in any country would, in the opinion of both Pfizer and Abgenix,
infringe a patent owned by a third party, Pfizer and Abgenix, upon mutual
consent, shall attempt to obtain a license under such patent at Pfizer's
expense. If such license is obtained under such patent, [*] of any payments made
by Pfizer to such third party shall be deductible from royalty payments due from
Pfizer to Abgenix pursuant to this Agreement; provided, however, that in
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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no event shall royalties payable to Abgenix be lower than [*] of Net Sales as a
result of all such deductions. All such computations, payments, and adjustments
shall be on a country by country and patent by patent basis.
5. REPRESENTATION AND WARRANTY.
5.1 Abgenix represents and warrants to Pfizer that it has the right to
grant the License granted pursuant to this Agreement, and that the License so
granted does not conflict with or violate the terms of any agreement between
Abgenix and any third party.
5.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5 ABGENIX MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES,
INCLUDING ANY WARRANTIES AS TO THE PATENT RIGHTS, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE.
6. TREATMENT OF CONFIDENTIAL INFORMATION.
6.1 CONFIDENTIALITY.
6.1.1 Pfizer and Abgenix each recognize that the other's
Confidential Information constitutes highly valuable, confidential information,
Subject to Pfizer's right and obligations pursuant to this Agreement, Pfizer and
Abgenix each agree that during the term of the Research Agreement and for five
(5) years thereafter, it will keep confidential, and will cause its Affiliates
to keep confidential, all Abgenix Confidential Information or Pfizer
Confidential Information, as the case may be, that is disclosed to it or to any
of its Affiliates pursuant to this Agreement. Neither Pfizer, its Affiliates nor
Abgenix shall use Confidential Information of the other party except as
expressly permitted under this Agreement. For all purposes of this Section 6, it
is understood that Joint
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Technology shall be deemed Confidential Information of both parties.
6.1.2 Subject to Pfizer's rights and obligations pursuant to this
Agreement, Pfizer and Abgenix each agree that any disclosure of the other's
Confidential Information to any officer, employee or agent of the other party or
of any of its Affiliates shall be made only if and to the extent necessary to
carry out its responsibilities under this Agreement and shall be limited to the
maximum extent possible consistent with such responsibilities. Subject to
Pfizer's rights and obligations pursuant to this Agreement, Pfizer and Abgenix
each agree not to disclose the other's Confidential Information to any third
parties under any circumstance without written permission from the other party.
Each party shall take such action, and shall cause its Affiliates to take such
action, to preserve the confidentiality of each other's Confidential Information
as it would customarily take to preserve the confidentiality of its own
Confidential Information. Each party, upon the other's request, will return all
the Confidential Information disclosed to it by the other party pursuant to this
Agreement, including all copies and extracts of documents, within sixty (60)
days of the request upon the termination of this Agreement except for one (1)
copy which may be kept for the purpose of complying with continuing obligations
under this Agreement.
6.2 PUBLICITY. Except as required by law, neither party may disclose the
terms of this Agreement without the written consent of the other party.
6.3 DISCLOSURE REQUIRED BY LAW. If either party is requested to disclose
the Confidential Information in connection with a legal or administrative
proceeding or is otherwise required by law to disclose the Confidential
Information, such party will give the other party prompt notice of such request.
The disclosing party may seek an appropriate protective order or other remedy or
waive compliance with the provisions of this Agreement. If such party seeks a
protective order or other remedy, the other party will cooperate. If such party
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fails to obtain a protective order or waive compliance with the relevant
provisions of this Agreement, the other party will disclose only that portion of
Confidential Information which its legal counsel determines it is required to
disclose.
6.4 DISCLOSURE OF INVENTIONS. Each party shall promptly inform the other
about all inventions in the Area within Joint Technology that are conceived,
made or developed in the course of carrying out the Research Program by
employees of, consultants to, either of them solely, or jointly with employees
of, or consultants to the other.
7. PROVISIONS CONCERNING FILING, PROSECUTION AND MAINTENANCE OF JOINT PATENT
RIGHTS. The following provisions relate to the filing, prosecution and
maintenance of Joint Patent Rights during the term of this Agreement:
7.1 Filing. Prosecution and Maintenance by Abgenix. With respect to
Joint Patent Rights in which Abgenix employees or consultants, alone or together
with Pfizer employees, or consultants are named as inventors, Abgenix shall have
the exclusive right and obligation :
(a) to file applications for letters patent on patentable
inventions included in Joint Patent Rights; provided, however, that Abgenix
shall consult with Pfizer regarding countries in which such patent applications
should be filed and shall file patent applications in those countries where
Pfizer requests that Abgenix file such applications; and, further provided, that
Abgenix, at its option and expense, may file in countries where Pfizer does not
request that Abgenix file such applications;
(b) to take all reasonable steps to prosecute all pending and
new patent applications included within Joint Patent Rights;
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(c) to respond to oppositions, nullity actions, re-examinations,
revocation actions and similar proceedings filed by third parties against the
grant of letters patent for such applications;
(d) to maintain in force any letters patent included in Joint
Patent Rights by duly filing all necessary papers and paying any fees required
by the patent laws of the particular country in which such letters patent were
granted; and
(e) to cooperate fully with, and take all necessary actions
requested by, Pfizer in connection with the preparation, prosecution and
maintenance of any letters patent included in Joint Patent Rights.
Abgenix shall notify Pfizer in a timely manner of any decision
to abandon a pending patent application or an issued patent included in Joint
Patent Rights. Thereafter, Pfizer shall have the option, at its expense, of
continuing to prosecute any such pending patent application or of keeping the
issued patent in force.
7.1.1 Copies of Documents. Abgenix and Pfizer shall provide to each
other copies of all patent applications that are part of Joint Patent Rights
prior to filing, for the purpose of obtaining substantive comment of the other
party's patent counsel. Abgenix and Pfizer shall also provide to the other
copies of all documents relating to prosecution of all such patent applications
in a timely manner and shall provide to the other every six (6) months a report
detailing the status of all patent applications that are a part of Joint Patent
Rights.
7.1.2 Reimbursement of Costs for Filing Prosecuting and Maintaining
Joint Patent Rights. Within thirty (30) days of receipt of invoices from
Abgenix, Pfizer shall reimburse Abgenix for all the costs of filing,
prosecuting, responding to opposition and maintaining patent applications and
patents in countries where Pfizer requests that patent applications be filed,
prosecuted and maintained. Such reimbursement shall be in addition to other
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funding payments under this Agreement and shall include such costs of all
activities described in 7.1 (a)-(e) above. However, Pfizer may, upon sixty (60)
days notice, request that Abgenix discontinue filing or prosecution of patent
applications in any country and discontinue reimbursing Abgenix for the costs of
filing, prosecuting, responding to opposition or maintaining such patent
application or patent in any country. Abgenix shall pay all costs in those
countries in which Pfizer requests that Abgenix not file, prosecute or maintain
patent applications and patents, but in which Abgenix, at its option, elects to
do so.
7.1.3 Pfizer shall have the right to FILE on behalf of and as an
agent for Abgenix all applications for, and take all actions necessary to obtain
patent extensions pursuant to 35 USC Section 156 and foreign counterparts with
respect to the Joint Patent Rights to the extent that such extensions are
available by reason of a Licensed Antibody Product under the License Agreement
during the period the License Agreement is in effect. Abgenix agrees, to sign,
such further documents and take such further actions as may be requested by
Pfizer in this regard, at Pfizer's expense
7.2 Filing, Prosecution and Maintenance by Pfizer. With respect to
Patent Rights in which Pfizer employees or consultants alone are named as
inventors, Pfizer shall have those rights and duties ascribed to Abgenix in
Section 7.1. except that Pfizer will bear all related expenses.
7.3 Neither party may disclaim a Valid Claim within Joint Patent Rights
without the consent of the other.
8. OTHER AGREEMENTS.
Concurrently with the execution of this Agreement, Abgenix and Pfizer
shall enter into a Research Agreement and a Stock Purchase Agreement. This
Agreement, the Research Agreement, and the Stock Purchase Agreement are the
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sole agreements with respect to the subject matter and supersede all other
agreements and understanding between the parties with respect to same.
9. TERMINATION AND DISENGAGEMENT.
9.1 Events OF TERMINATION. The following events shall constitute events
of termination ("Events of Termination"):
(a) Any written representation or warranty by Abgenix or Pfizer, or
any of its officers, made under or in connection with this Agreement shall prove
to have been incorrect in any material respect when made;
(b) Abgenix or Pfizer shall fail in any material respect to perform
or observe any term, covenant or understanding contained in this Agreement or in
any of the other documents or instruments delivered pursuant to, or concurrently
with, this Agreement, and any such failure shall remain unremedied for thirty
(30) days after written notice to the failing party.
9.2 TERMINATION. Upon the occurrence of any Event of Termination, the
party not responsible may, by notice to the other party, terminate this
Agreement.
9.3 Termination of this Agreement by either party, with or without
cause, will not terminate the licenses granted pursuant to Section 5.2 of the
Research Agreement.
9.4 Termination of this Agreement for any reason shall be without
prejudice to:
(a) the rights and obligations of the parties provided in Sections
6, 7 and 10;
(b) Abgenix's right to receive all royalty payments accrued
hereunder; or
(c) any other remedies which either party may otherwise have.
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10. INDEMNIFICATION.
Pfizer and Abgenix will indemnify each other for damages, settlements,
costs, legal fees and other expenses incurred in connection with a claim by a
third party against either party based on any action or omission of the
indemnifying party's agents, employees, or officers related to its obligations
under this Agreement; provided, however, that the foregoing shall not apply (i)
if the claim is found to be based upon the negligence, recklessness or wilful
misconduct of the party seeking indemnification; or (ii) if such party fails to
give the other party prompt notice of any claim it receives and such failure
materially prejudices the other party with respect to any claim or action to
which its obligation pursuant to this Section applies. Notwithstanding the
foregoing, Abgenix shall not indemnify Pfizer for claims arising from the sale
of Antibody Products or exercise of rights granted to Pfizer under Section 5.2
of the Research Agreement, or the License Agreement (including without
limitation product liability claims) and Pfizer shall indemnify Abgenix with
respect to such claims and to claims arising from Joint Patent Rights, Pfizer
Patent Rights, Joint Technology and Pfizer Technology except for intellectual
property claims with respect to Abgenix Patent Rights, Abgenix Controlled-Patent
Rights or Abgenix Technology. Each party, in its sole discretion, shall choose
legal counsel, shall control the defense of such Claim or action and shall have
the right to settle same on such terms and conditions it deems advisable;
provided however, it shall obtain the other party's prior consent to such part
of any settlement which requires payment or other action by the other party or
is likely to have a material adverse effect on the other party's business.
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11. NOTICES AND REPORTS.
11.1 All notices shall be in writing mailed via certified mail, return
receipt requested, courier, or facsimile transmission addressed as follows, or
to such other address as may be designated from time to time:
If to Pfizer: Pfizer Central Research
Xxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxx, President
with copy to: Xxxxxx X. Xxxxxxxxx, General Counsel
If to Abgenix: Abgenix, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
cc:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Notices shall be deemed given as of the date sent.
11.2 Reports. Pfizer agrees to keep Abgenix informed with respect to
activities and progress toward further research, development and
commercialization of Licensed Antibody Products. Pfizer agrees to provide to
Abgenix every six months a summary of such activities and progress. In addition,
Pfizer will provide to Abgenix copies of any data regarding the immunogenicity
and pharmacokinetics of the Antibody Products together with copies of any
reports or summaries of such data. Abgenix agrees that all such information will
be deemed Pfizer Confidential Information.
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12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
13. MISCELLANEOUS.
13.1 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors
and permitted assigns.
13.2 HEADINGS. Paragraph headings are inserted for convenience of
reference only and do not form a part of this Agreement.
13.3 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original.
13.4 AMENDMENT; WAIVER; ETC. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.
13.5 NO THIRD PARTY BENEFICIARIES. No third party including any employee
of any party to this Agreement, shall have or acquire any rights by reason of
this Agreement. Nothing contained in this Agreement shall be deemed to
constitute the parties partners with each other or any third party.
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13.6. ASSIGNMENT AND SUCCESSORS. This Agreement may not be assigned by
either party, except that each party may assign this Agreement and the rights
and interests of such party, in whole or in part, to any of its Affiliates, any
purchaser of all or substantially all of its assets or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.
13.7 FORCE MAJEURE. Neither Pfizer nor Abgenix shall be liable for failure
of or delay in performing obligations set forth in this Agreement, and neither
shall be deemed in breach of its obligations, if such failure or delay is due to
natural disasters or any causes reasonably beyond the control of Pfizer or
Abgenix.
13.8 SEVERABILITY. If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of the
Agreement shall not be affected.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
PFIZER INC ABGENIX, INC.
By: [SIG] By: [SIG]
-------------------------------- ------------------------------
Title: President, Control, Research Title: Vice President, Corporate
Development Development
---------------------------- ---------------------------
cc: Pfizer Inc, Xxxxx Xxxxxxxx, Xxxxxx, XX 00000
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EXHIBIT D
SERIES C PREFERRED
STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
made as of the 12th day of January, 1998, by and between Abgenix, Inc., a
Delaware corporation located at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000
(the "Company"), and Pfizer, Inc. (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Shares.
1.1 Sale of Shares.
(a) The Company shall adopt and file with the
Secretary of State of Delaware on or before the Closing (as defined below) a
Certificate of Designations in the form attached hereto as Exhibit A.
(b) Subject to the terms and conditions of this
Agreement, the Investor agrees to purchase at the Closing and the Company agrees
to sell and issue to the Investor at the Closing, 160,000 shares of the
Company's Series C Preferred Stock at a per share price of $8.00 for an
aggregate purchase price of $1.28 million.
(c) The number of shares of Series C Preferred Stock to
be sold pursuant to this Agreement are hereinafter referred to as the "Shares."
The total amount of Common Stock and other securities issuable upon conversion
of the Shares is hereinafter referred to as the "Conversion Stock." The Shares
and the Conversion Stock are hereinafter collectively referred to as the
"Securities."
1.2 Closing. The purchase and sale of the Shares shall take place
at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx, at 11:00 A.M., on January 12, 1998, or at such other time and
place as the Company and Investors acquiring in the aggregate more than half the
Shares sold pursuant hereto mutually agree upon orally or in writing (which time
and place are designated as the "Closing"). At the Closing the Company shall
deliver to the Investor certificate(s) representing the Shares which such
Investor is purchasing, against delivery to the Company by such Investor of a
check or wire transfer in the aggregate amount of the purchase price payable to
the Company's order.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, except as set forth on a Schedule
of Exceptions attached hereto as Exhibit B, which exceptions shall be deemed to
be representations and warranties as if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has
60
all requisite corporate power and authority to carry on its business as now
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
2.2 Capitalization. The authorized capital of the Company
consists, or will consist prior to the Closing, of:
(a) 20,000,000 shares of Preferred Stock (the
"Preferred Stock"), of which 5,396,667 shares have been designated Series A
Preferred Stock, 3,385,000 shares have been designated Series B Preferred Stock,
160,000 shares have been designated Series C Preferred Stock and the remaining
11,058,333 have not been designated. 4,416,667 shares of Series A Preferred
Stock are issued and outstanding, 3,267,685 shares of Series B Preferred Stock
are issued and outstanding and 160,000 shares of Series C Preferred Stock will
be sold pursuant to this Agreement. The rights, preferences, privileges and
restrictions of the Shares will be as stated in the Company's Certificate of
Designations attached hereto as Exhibit A.
(b) 50,000,000 shares of Common Stock (the "Common
Stock"), of which 171,620 shares are issued and outstanding and 25,000 are
subject to a purchase right pursuant to a license agreement between the Company
and Xxxxxx X. Billing, M.D., dated February 1, 1997.
(c) Options exercisable for up to 1,614,861 shares of
Common Stock, and after accounting for 171,620 shares of Common Stock issued
upon exercise of options or stock purchase rights, there are 604,769 shares
available for grant under the Company's Incentive Stock Plan.
(d) Warrants exercisable for 121,667 shares of Series A
Preferred Stock issued to Cell Genesys, Inc.
(e) Except as provided herein and for (i) the conversion
privileges of the Shares and (ii) the right of first offer provided in the
Amended and Restated Stockholder Rights Agreement attached hereto as Exhibit C
(the "Rights Agreement"), there are no other outstanding options, warrants,
rights (including conversion or preemptive rights) or agreements for the
purchase or acquisition from the Company of any shares of its capital stock. The
Company is not a party or subject to any agreement or understanding, and, to the
Company's knowledge, there is no agreement or understanding between any persons
and/or entities, which affects or relates to the voting or giving of written
consents with respect to any security.
2.3 Subsidiaries. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Rights
Agreement, the performance of all obligations of the Company hereunder and
thereunder and
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the authorization, issuance (or reservation for issuance) and delivery of the
Shares being sold hereunder has been taken or will be taken prior to the
Closing, and this Agreement and the Rights Agreement constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
terms.
2.5 Valid Issuance of Preferred and Common Stock.
(a) The Shares which are being purchased by the
Investor hereunder, when issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, will be duly and validly issued,
fully paid and nonassessable and, based in part upon the representations of the
Investor in this Agreement, will be issued in compliance with all applicable
federal and state securities laws. The Conversion Stock has been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Certificate of Designations, shall be duly and validly issued, fully paid
and nonassessable, and issued in compliance with all applicable securities laws,
as presently in effect, of the United States and each of the states whose
securities laws govern the issuance of the Shares hereunder and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement or the Rights Agreement and under applicable state and federal
securities law.
(b) The outstanding shares of Common Stock and Preferred
Stock are all duly and validly authorized and issued, fully paid and
nonassessable, and were issued in compliance with all applicable federal and
state securities laws.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement and the Rights Agreement, except for
the filing pursuant to Section 25102(f) of the California Corporate Securities
Law of 1968, as amended, and the rules thereunder, which filing will be effected
within 15 days of the sale of the Shares hereunder or as otherwise required by
Rule 506 of the Securities Act of 1933, as amended (the "Act").
2.7 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which
questions the validity of this Agreement and the Rights Agreement or the right
of the Company to enter into them, or to consummate the transactions
contemplated hereby and thereby, or which might result, either individually or
in the aggregate, in any material adverse changes in the assets, condition,
affairs or prospects of the Company, financially or otherwise, or any change in
the current equity ownership of the Company, nor is the Company aware that there
is any basis for the foregoing. The foregoing includes, without limitation,
actions pending or threatened (or any basis therefor known to the Company)
involving the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers or negotiations by the Company with
proposed backers of, or investors in, the Company or its proposed business. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.
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There is no action, suit, proceeding or investigation by the Company currently
pending or which the Company intends to initiate.
2.8 Patents and Trademarks. The Company owns or possesses
sufficient title and ownership of or rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes necessary for its business as now conducted and
as proposed without any conflict with or infringement of the rights of others.
There are no outstanding options, licenses, or agreements of any kind relating
to the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity. The Company has
not received any communications alleging that the Company has violated or, by
conducting its business as proposed to be conducted immediately after the
Closing, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets, licenses or other proprietary rights of any
other person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business as proposed to be conducted immediately after the
Closing. Neither the execution nor delivery of this Agreement or the Rights
Agreement nor the carrying on of the Company's business by the employees of the
Company, nor the conduct of the Company's business as proposed to be conducted
immediately after the Closing, will, to the Company's knowledge, conflict with
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any contract, covenant or instrument under which any of such
employees is now obligated. The Company does not believe it is or will be
necessary to utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company. The
Company has not granted rights to manufacture, produce, assemble, license,
market, or sell its products to any other person and is not bound by any
agreement that affects the Company's exclusive right to develop, manufacture,
assemble, distribute, market, or sell its products.
2.9 Compliance with Other Instruments.
(a) The Company is not in violation or default of any
provisions of its Certificate of Incorporation, Certificate of Designations or
Bylaws, as amended, or of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound or, to its knowledge, of
any provision of federal or state statute, rule or regulation applicable to the
Company. The execution, delivery and performance of this Agreement and the
Rights Agreement and the consummation of the transactions contemplated hereby
and thereby will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
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(b) To the Company's knowledge, the Company has met
every condition, and has performed no act, the occurrence of which would result
in the Company's loss of any right granted under any permit, license,
authorization, approval, distribution or other agreement.
2.10 Related Party Transactions. There are no obligations of the
Company to employees, officers, directors or 5% stockholders of the Company
other than (a) for payment of salary for services rendered, (b) reimbursement
for reasonable expenses incurred on behalf of the Company and (c) for other
standard employee benefits made generally available to all employees (including
stock option agreements outstanding under any stock option plan approved by the
Board of Directors of the Company). No employee, officer, director or 5%
stockholder of the Company or member of his or her immediate family thereof is
indebted to the Company, nor is the Company indebted (or committed to make loans
or extend or guarantee credit) to any of them. To the Company's knowledge, none
of such persons has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation that competes with the
Company, except that employees, officers or directors of the Company and members
of their immediate families may own stock in publicly traded companies that may
compete with the Company. To the Company's knowledge except for agreements to
purchase shares of the Company's securities, no officer or director or any
member of their immediate families is, directly or indirectly, interested in any
material contract with the Company.
2.11 Agreements; Action.
(a) Except for agreements explicitly contemplated
hereby, there are no agreements, understandings or proposed transactions between
the Company and any of its officers, directors, affiliates, or any affiliate
thereof.
(b) There are no agreements, understandings,
instruments, contracts or proposed transactions to which the Company is a party
or by which it is bound which involve (i) obligations (contingent or otherwise)
of, or payments to the Company in excess of $50,000, (ii) the license of any
patent, copyright, trade secret or other proprietary right to or from the
Company, (iii) provisions restricting or affecting the development, manufacture
or distribution of the Company's products or services, or (iv) indemnification
by the Company with respect to infringements of proprietary rights.
(c) The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) incurred any indebtedness for money
borrowed or incurred any other liabilities individually in excess of $50,000 or
in excess of $200,000 in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than in
the ordinary course of business.
(d) The Company is not a party to and is not bound by
any contract, agreement or instrument, or subject to any restriction under its
Certificate of Incorporation, Certificate
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of Designations or Bylaws, as amended, which materially adversely affects its
business as now conducted and as proposed to be conducted.
2.12 Disclosure. The Company has fully provided the Investor with
all the information which such Investor has requested for deciding whether to
purchase the Shares and all information which the Company believes is reasonably
necessary to enable such Investor to make such decision. Neither this Agreement
nor any other statements or certificates made or delivered in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading.
2.13 Registration or First Offer Rights. Except as provided in
the Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, or any right of first offer to
any person or entity.
2.14 Corporate Documents. Except for amendments necessary to
satisfy representations and warranties or conditions contained herein (the form
of which amendments has been approved by the Investor), the Company's
Certificate of Incorporation, Certificate of Designations and Bylaws, as
amended, are in the form previously provided to the Investor.
2.15 Title to Property and Assets. The Company owns its property
and assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens which arise in the ordinary course of
business and do not individually or in the aggregate materially impair the
Company's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to its knowledge, holds a valid leasehold interest free of any liens,
claims or encumbrances.
2.16 Permits. The Company has all franchises, permits, licenses,
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, or financial condition of the Company and believes it can
obtain, without undue burden or expense, any similar authority for the conduct
of its business as planned to be conducted. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other
similar authority.
2.17 Financial Statements. The Company has delivered to the
Investor its audited balance sheet and income statement for the period from
inception (July 15, 1996) to December 31, 1996 and unaudited balance sheet and
income statement for the nine month period ended September 30, 1997
(collectively the "Financial Statements"). The Financial Statements, together
with the notes thereto, (i) are complete and correct in all material respects,
(ii) are in accordance with the Company's books and records, (iii) present
fairly its financial position as of that date and the results of its operations
for the period indicated, and (iv) have been prepared in conformity with
generally accepted accounting principles consistently applied throughout the
periods indicated, subject, in the case of interim statements, to normal year
end adjustments and the absence of footnotes. Except as set forth in the
Financial Statements, the Company has no material liabilities, contingent or
otherwise, other than
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(i) liabilities incurred in the ordinary course of business and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and
not required under generally accepted accounting principles to be reflected in
the Financial Statements which, in both cases, individually or in the aggregate,
are not material to the financial condition or operating results of the Company.
Except as disclosed in the Financial Statements, the Company is not a guarantor
or indemnitor of any indebtedness of any other person, firm or corporation.
2.18 Changes. To the Company's knowledge, since September 30,
1997, there has not been:
(a) Any change in the assets, liabilities, financial
condition or operating results of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse.
(b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the business,
properties, or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
(c) any waiver or compromise by the Company of a
valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and which is not material to the business,
properties, or financial condition of the Company (as such business is presently
conducted and it is proposed to be conducted);
(e) any material change to a material contract or
arrangement by which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement
or agreement with any employee, officer, director, or stockholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of
any key officer of the Company; and the Company, to its knowledge, does not know
of the impending resignation or termination of employment of any such officer;
(i) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of the Company;
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(j) any mortgage, pledge, transfer of a security
interest in, or lien, created by the Company, with respect to any of its
material properties or assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or
for the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any of such stock by the
Company;
(m) to the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
business, properties, or financial condition of the Company (as such business is
presently conducted and as it is proposed to be conducted); or
(n) any agreement or commitment by the Company to do
any of the things described in this Section 2.19.
2.19 Employee Benefit Plans. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
2.20 Tax Returns, Payments and Elections. The Company has filed
all tax returns and reports as required by law. These returns and reports are
true and correct in all material respects. The Company has paid all taxes and
other assessments due. The provision for taxes of the Company as shown in the
Financial Statements is adequate for taxes due or accrued as of the date
thereof. The Company has not elected pursuant to the Internal Revenue Code of
1986, as amended (the "Code"), to be treated as a Subchapter S corporation or a
collapsible corporation pursuant to Section 341(f) or Section 1362(a) of the
Code, nor has it made any other elections pursuant to the Code (other than
elections which relate solely to methods of accounting, depreciation or
amortization) which would have a material effect on the Company, its financial
condition, its business as presently conducted or proposed to be conducted or
any of its properties or material assets. The Company has never had any tax
deficiency proposed or assessed against it and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax or
governmental charge. To the Company's knowledge none of its federal income tax
returns and none of its state income or franchise tax or sales or use tax
returns has ever been audited by governmental authorities. Since the date of the
Financial Statements, the Company has made adequate provisions on its books of
account for all taxes, assessments and governmental charges with respect to its
business, properties and operations for such period. The Company has withheld or
collected from each payment made to each of its employees, the amount of all
taxes (including, but not limited to, federal income taxes, Federal Insurance
Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be
withheld or collected therefrom, and has paid the same to the proper tax
receiving officers or authorized depositaries.
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2.21 Insurance. The Company has in full force and effect fire and
casualty insurance policies, with coverage customary for companies similarly
situated to the Company.
2.22 Minute Books. The minute books of the Company made available
to Investor or its counsel as requested, contain a complete summary of all
meetings and actions by consent of directors and stockholders since the time of
incorporation and reflect all transactions referred to in such minutes
accurately in all material respects.
2.23 Labor Agreements and Actions. The Company and its employees
are not bound by or subject to (and none of its assets or properties is bound by
or subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened, nor is the Company aware of any labor organization activity
involving its employees. The Company is not aware that any officer or key
employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing. The employment of each officer
and employee of the Company is terminable at the will of the Company.
2.24 Employees: Employee Compensation. To its knowledge, the
Company has complied in all material respects with all applicable state and
federal equal employment opportunity and other laws related to employment. To
the Company's knowledge, no employee of the Company is or will be in violation
of any judgment, decree or order, or any term of any employment contract, patent
disclosure agreement or other contract or agreement relating to the relationship
of any such employee with the Company or any other party because of the nature
of the business conducted or to be conducted by the Company or to the
utilization by the employee of his best efforts with respect to such business.
The Company is not party to or bound by any currently effective employment
contract, deferred compensation agreement, bonus plan, incentive plan, profit
sharing plan, retirement agreement, or other employee compensation agreement.
2.25 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.
2.26 Offering. Subject in part to the truth and accuracy of the
Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the shares as contemplated by this Agreement are exempt
from the registration requirements of the Act, and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. Neither the Company nor any authorized agent acting on its
behalf has taken or will take any action hereafter that would cause the loss of
such exemption.
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2.27 Environmental and Safety Laws. To its knowledge, the Company
is not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants that:
3.1 Authorization. This Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with its terms. The
Investor represents that it has full power and authority to enter into this
Agreement.
3.2 Purchase Entirely for Own Account. This Agreement is made
with the Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Shares will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Securities.
3.3 Disclosure of Information. The Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Shares. The Investor further represents that it has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares. The foregoing, however,
does not limit or modify the representations and warranties of the Company in
Section 2 of this Agreement or the right of the Investor to rely thereon.
3.4 Investment Experience. The Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, and bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares. If
other than an individual, Investor also represents it has not been organized for
the purpose of acquiring the Shares.
3.5 Accredited Investor. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D under the Act.
3.6 Restricted Securities. The Investor understands that the
Shares it is purchasing are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, The Investor
represents that it is familiar with Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
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3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, The Investor further agrees not to
make any disposition of all or any portion of the Shares (or the Conversion
Stock) unless and until:
(a) There is then in effect a Registration Statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) Such Investor shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of Investor's corporate counsel or counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such shares
under the Act.
(c) Notwithstanding the provisions of subsections
(a) and (b) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by an Investor which is a partnership to a partner of
such partnership or a retired partner of such partnership who retires after the
date hereof, or to the estate of any such partner or retired partner or the
transfer by gift, will or intestate succession of any partner to such partner's
spouse or lineal descendants or ancestors or by an Investor which is a
corporation to an Affiliate (as defined under the Act), if the transferee agrees
in writing to be subject to the terms hereof to the same extent as if such
transferee were an original Investor hereunder.
3.8 Legends. It is understood that the certificates evidencing
the Shares (and the Conversion Stock) may bear one or all of the following
legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT."
(b) Any legend required by the laws of the State of
California or any other applicable state, including any legend required by the
California Department of Corporations and Sections 417 and 418 of the California
Corporations Code.
4. California Commissioner of Corporations. THE SALE OF THE SECURITIES
THAT IS THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF THE
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100,
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25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED
UNLESS THE SALE IS SO EXEMPT.
5. Conditions of Investor's Obligations at Closing. The obligations of
the Investor under Section 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing thereto:
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
5.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
5.3 Compliance Certificate. The President or CEO of the Company
shall deliver to the Investor at the Closing a certificate certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
operations, properties, assets or condition of the Company since September 30,
1997.
5.4 Officer's Certificate. The President, CEO or CFO of the
Company shall deliver to the Investor at the Closing a certificate certifying
that the Certificate of Incorporation and Bylaws of the Company are true and
correct.
5.5 Qualifications. The Commissioner of Corporations of the State
of California shall have issued a permit qualifying the offer and sale of the
Shares and the Conversion Stock to the Investor pursuant to this Agreement, or
such offer and sale shall be exempt from such qualification under the California
Corporate Securities Law of 1968, as amended. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the issuance and
sale of the Shares and the Conversion Stock pursuant to this Agreement shall be
duly obtained and effective as of the Closing. Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
counsel for the Company, will undertake the filing of any such authorizations,
approvals, or permits and will provided copies of any such authorizations,
approvals, or permits to the Investor.
5.6 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor and counsel to any of the Investor, and they shall
have received all such counterpart original and certified or other copies of
such documents as they may reasonably request.
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5.7 Certificate of Designations. The Certificate of
Designations in the form attached hereto as Exhibit A shall have been approved
by the Company's Board of Directors and filed with the Delaware Secretary of
State.
5.8 Rights Agreement. The Company and the Investor shall
have entered into the Rights Agreement in the form attached hereto as Exhibit C.
5.9 Opinion of Company Counsel. The Investor shall have
received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Company, an
opinion, dated as of the Closing, in the form attached hereto as Exhibit D.
5.10 Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the Rights
Agreements (except for such as may be properly obtained subsequent to the
Closing).
6. Conditions of the Company's Obligations at Closing. The
obligations of the Company to the Investor under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions,
the waiver of which shall not be effective unless consented to in writing by the
Company:
6.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2 Payment of Purchase Price. The Investor shall have
delivered the purchase price specified in Section 1.1(b).
6.3 California Qualification. The Commissioner of
Corporations of the State of California shall have issued a permit qualifying
the offer and sale to the Investor of the Shares and the Conversion Stock or
such offer and sale shall be exempt from such qualification under the California
Corporate Securities Law of 1968, as amended. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the issuance and
sale of the Shares and Conversion Stock pursuant to this Agreement shall be duly
obtained and effective as of the Closing.
6.4 Certificate of Designations. The Certificate of
Designations attached hereto as Exhibit A shall have been accepted for filing by
the Delaware Secretary of State.
6.5 Rights Agreement. The Company and the Investor shall
have entered into the Rights Agreement in the form attached hereto as Exhibit C.
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6.6 Pfizer, Inc. Agreement. The Company and Pfizer, Inc.
shall have entered into the Collaborative Research Agreement.
7. Covenants of the Company.
7.1 Delivery of Financial Statements. The Company shall
deliver to the Investor:
(a) as soon as practicable, but in any event within
one hundred (100) days after the end of each fiscal year of the Company
commencing with the fiscal year ending December 31, 1997, a balance sheet, and
statements of operations and cash flow for such fiscal year. Such year-end
financial reports to be in reasonable detail and shown compared to the prior
fiscal year, prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied and consistent with the requirements of
Regulation S-X of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and audited and certified by independent public accountants of
nationally recognized standing selected by the Company;
(b) within fifty (50) days of the end of each
quarter, and until a public offering of Common Stock of the Company, a
management letter, describing the results of operations and liquidity and
capital resources, and an unaudited statement of operations and balance sheet
and cash flow for and as of the end of such quarter, in reasonable detail and
prepared in accordance with GAAP consistently applied, subject to year end audit
adjustments and the absence of footnotes;
(c) with respect to the financial statements called
for in subsection (b) of this Section 7.1, an instrument executed by the Chief
Financial Officer, President or Chairman of the Company and certifying that such
financials were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods and fairly present the financial condition of the
Company and its results of operation for the period specified, subject to
year-end audit adjustments and the absence of footnotes;
7.2 Inspection. The Company shall permit the Investor at such
Investor's expense to visit and inspect the Company's properties, to examine its
books of account and records and to discuss the Company's affairs, finances and
accounts with its officers, all at such reasonable times as may be requested in
writing by the Investor; provided, however, that the Company shall not be
obligated pursuant to this Section 7.2 to provide access to any information
which it reasonably considers to be a trade secret, proprietary information or
other confidential information.
7.3 Termination of Covenants. The covenants set forth in Sections
7.1 and 7.2 shall terminate and be of no further force or effect when the sale
of securities pursuant to a registration statement filed by the Company under
the Act in connection with the firm commitment underwritten offering of its
securities to the general public is consummated at a per share price not less
than $9.00 (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares) with aggregate
proceeds to the Company of not less than $15.0 million (after deduction of
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underwriters commissions and expenses) or when the Company first becomes subject
to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange
Act, whichever event shall first occur.
8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations and
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investor or the Company.
8.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
8.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereto or in the case of the
Company on the first page of this Agreement, or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties.
8.7 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. The Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, partners,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
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8.8 Expenses. The Company shall pay all costs and expenses that
it incurs with respect to the negotiation, execution, delivery and performance
of this Agreement and the Rights Agreement. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the Certificate
of Designations or the Rights Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
8.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
at least a majority of the Securities. Any amendment or waiver effected in
accordance with this Section shall be binding upon each holder of any securities
purchased under this Agreement at the time outstanding (including securities
into which such securities are convertible), each future holder of all such
securities, and the Company; provided, however, that no condition set forth in
Section 5 hereof may be waived with respect to any Investor who does not consent
thereto.
8.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.11 Aggregation of Stock. All Shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
8.12 Entire Agreement. This Agreement and the documents referred
to herein constitute the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ABGENIX, INC.
By:
-----------------------------------------
Xxxx Xxxxxxxxxx, Chief Financial Officer
PFIZER, INC.
By:
-----------------------------------------
Title:
--------------------------------------
ABGENIX, INC. SERIES C PREFERRED STOCK
PURCHASE AGREEMENT SIGNATURE PAGE.
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