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EXHIBIT 10.21
COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT, effective as of April 24, 1996 ("Effective Date"), is
made by and between:
PACKARD INSTRUMENT COMPANY, INC., a State of Delaware corporation,
having its principal office at 000 Xxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000
(hereinafter referred to as "PACKARD").
and
AURORA BIOSCIENCES CORPORATION, a State of Delaware corporation, with
its principal office at 00000 Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as "AURORA").
RECITALS
WHEREAS, AURORA possesses bioreagents, chemical probes,
instrumentation and imaging technology for miniaturization and high-throughput
analysis of cell-based and biochemical assays.
WHEREAS, PACKARD possesses instrumentation, reagents and assay
technology for the high-throughput sample preparation and analysis of
biological assays.
WHEREAS, PACKARD and AURORA desire to collaborate to develop and
commercialize high-throughput systems using miniaturized automated screens.
In consideration for the payments and mutual undertakings detailed
herein, PACKARD and AURORA agree as follows:
I. DEFINITIONS
In this Agreement, the following terms shall have the following
meanings:
1.1 "AFFILIATE" shall mean any entity which controls, is controlled
or is under common control with AURORA or PACKARD. An entity shall be regarded
as in control of another entity if it owns or controls at least fifty percent
(50%) of the shares of the subject entity entitled to vote in the election of
directors (or, in the case of an entity that is not a corporation, for the
election of the corresponding managing authority).
1.2 "ASSAY" shall mean any ***
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1.3 "AURORA REAGENTS" shall mean *** *** *** . For purposes
of the foregoing, "controlled by" means possession of the ability to grant a
license or sublicense as provided for herein without violating the terms of any
agreement with or other arrangement with any third party.
1.4 "AURORA TECHNOLOGY" shall mean ***. For purposes of the
foregoing, "controlled by" means possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
with or other arrangement with any third party.
1.5 "AURORA UC REAGENTS" shall mean ***
1.6 ***
1.7 "CONFIDENTIAL INFORMATION" shall mean (i) any proprietary or
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder
which is identified as confidential or proprietary when disclosed and such
disclosure of confidential information is confirmed in writing within thirty
(30) days by the disclosing party.
1.8 "DETECTOR" shall mean a ***
1.9 "HTS" shall mean the ***
1.10 "IMAGER" shall mean a high resolution fluorescence imager and
associated software.
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1.11 "JOINT TECHNOLOGY" shall have the meaning set forth in Article
8.1.2.
1.12 "LIQUID-HANDLING HEAD" shall mean a device containing arrays
of two (2) or more PIEZO-DEVICES.
1.13 "NANO-PLATE" shall mean ***
1.14 "NET SALES" shall mean the *** . A "sale" shall also include a
transfer or other disposition for consideration other than cash, in which case
such consideration shall be valued at the fair market value thereof.
1.15 "PACKARD TECHNOLOGY" shall mean *** . For purposes of the
foregoing, "controlled by" means possession of the ability to grant a license
or sublicense as provided for herein without violating the terms of any
agreement with or other arrangement with any third party.
1.16 "PIEZO-DEVICE" shall mean ***
1.17 "PRODUCT(S)" shall mean the LIQUID-HANDLING HEADS, DETECTORS,
and NANO-PLATES which are jointly developed by AURORA and PACKARD under this
Agreement.
1.18 "UC LICENSE" shall mean a license agreement entered by AURORA
and the Regents of the University of California ("UC") which shall be attached
hereto as Addendum 2, based on that certain Letter Agreement dated March 4,
1996 between AURORA and UC, a copy of which is attached as Addendum 1.
II. COLLABORATION PROGRAM
2.1 OBJECTIVE. PACKARD and AURORA hereby commit to undertake and
pursue a collaboration program with the primary objective to develop and
commercialize
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high-throughput screening systems using PRODUCTS and ASSAYS for the purpose of
drug or agrochemical discovery in the pharmaceutical, biotechnology and
agrochemical market sectors (the "Collaboration Program"). It is understood
that the initial goal of the Collaboration Program shall be the development of
PRODUCTS, but the parties anticipate that the Collaboration Program will be
expanded to include the development of improved versions of the initial
PRODUCTS.
2.2 STANDARD. AURORA and PACKARD each will use commercially
reasonable efforts to achieve the objectives of the Collaboration Program as
specified in this Agreement.
2.3 MANAGEMENT.
2.3.1 A research and development steering committee (the
"R&D Steering Committee") and a marketing steering committee (the "Marketing
Steering Committee") will be established after the Effective Date. Each
Committee shall consist of two (2) members from each of AURORA and PACKARD, and
each of the parties may replace their respective Committee members at any time,
upon written notice to the other party. With respect to each Committee, AURORA
and PACKARD shall have one vote on the respective Committee and decisions of
each Committee shall be made by unanimous vote; provided, however, that any
matter that a Committee is unable to resolve shall be referred to the president
of each of AURORA and PACKARD, who shall meet within thirty (30) days to
resolve such matter.
2.3.2 The R&D Steering Committee shall annually prepare a
written description and plan of the research and development activities to be
conducted pursuant to the Collaboration Program, oversee the implementation of
the research and development to be undertaken, monitor and review the progress
thereof, and redirect the activities of the Collaboration Program as may be
required during the term of this Agreement. The Marketing Steering Committee
shall be responsible for providing guidance, support and coordination of the
PRODUCT commercialization activities of the parties and the activities of
PACKARD with regard to AURORA UC REAGENTS.
2.3.3 During the term of this Agreement, each Committee
shall meet at least quarterly, or as otherwise agreed. Such meetings shall
alternate between the parties' principal places of business, or may be held at
such other locations as the parties agree. Each party shall pay its own
expenses associated with such meetings.
2.3.4 AURORA and PACKARD will each designate a liaison
officer, each of whom shall be a member of the R&D Steering Committee to lead
an alliance management team to ensure effective communication and
collaboration. The alliance management team will submit a quarterly written
report to the Board of Directors of each company.
2.3.5 During the term of this Agreement, the president of
each of AURORA and PACKARD will meet annually at a mutually agreed location.
The R&D Steering
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Committee and Marketing Steering Committee shall each make a presentation at
such meeting describing their activities in the past year and proposed
activities in the next year.
2.4 RECORDS. Each party shall maintain records of the
Collaboration Program (or cause such records to be maintained) in sufficient
detail so as to properly reflect all work done and results achieved in the
performance of the Collaboration Program.
2.5 INVENTIONS AND DISCOVERIES. During the term of this
Agreement and for a period of one (1) year thereafter, each party shall
promptly notify the other party in writing of any invention or discovery,
whether or not patentable, conceived, reduced to practice, or otherwise
developed in connection with the Collaboration Program. In addition, each
party shall promptly provide the R&D Steering Committee with a detailed written
description of any such invention or discovery.
III. OBLIGATIONS
3.1 OBLIGATIONS OF AURORA.
3.1.1 AURORA shall use commercially reasonable efforts to
achieve the objectives of the Collaboration Program and, shall cooperate with
and assist PACKARD in the performance of its obligations hereunder. Without
limiting the generality of the foregoing, AURORA shall seek to achieve the
following milestones:
(a) ***.
(b) *** after the Effective Date, *** or more.
(c) ***
3.1.2 UC REAGENT SUPPLY. AURORA will supply PACKARD with
initial aliquots of the AURORA UC REAGENTS listed on Addendum 4 hereto, and
such other AURORA UC REAGENTS as the parties may agree in writing, in
sufficient amounts to facilitate the manufacture and commercialization of such
AURORA UC REAGENTS by PACKARD under this Agreement.
3.2 OBLIGATIONS OF PACKARD.
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3.2.1 PACKARD shall use commercially reasonable efforts to
achieve the objective of the Collaboration Program and, to that end, shall
cooperate with and assist AURORA in the performance of AURORA's obligations
hereunder. Without limiting the generality of the foregoing, PACKARD shall
seek to achieve the following milestones:
(a) ***, as specified in and subject to the conditions
of this Agreement.
(b) ***
(c) ***
(i) ***
(ii) ***
(iii) ***
(iv) ***
In addition, PACKARD shall ***
As used herein, a "functional prototype" shall mean a prototype instrument
which (i) is fully operational and (ii) meets sufficient performance
specifications to permit effective beta-testing by AURORA or a third party.
As soon as practicable, but in any case within ninety (90) days following the
delivery of a functional prototype for a particular PRODUCT, AURORA shall
notify PACKARD (a) that the
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functional prototype conforms in all respects to the applicable PRODUCT
performance specifications set forth in Addendum 3, in which case such
prototype design shall be deemed an "accepted functional prototype", or (b)
that the functional prototype fails to perform in accordance with the
applicable performance specifications, identifying specific deficiencies. In
the event that AURORA provides PACKARD notice pursuant to (a) above, the date
of dispatch of such notice shall be the Acceptance Date for such accepted
functional prototype PRODUCT. PACKARD shall use its best efforts to correct
any deficiencies identified by AURORA pursuant to (b) above and provide AURORA
a corrected functional prototype within such period , but in the event that
despite such efforts PACKARD is unable to provide AURORA with an accepted
functional prototype within such ninety (90) day period, then the parties shall
negotiate appropriate and reasonable changes to the Development Program
Schedule, pursuant to Section 3.4.
All prototypes delivered by PACKARD pursuant to this Article 3.2.1(c) shall be
deemed for all purposes to have been consigned by PACKARD to AURORA and title
and ownership thereto shall remain with PACKARD. At PACKARD's election, AURORA
shall execute and deliver to PACKARD such financing statements or other notices
or other documentation required to reflect PACKARD's interest and to reflect
and secure PACKARD's interest.
3.2.2 PACKARD shall provide AURORA, at AURORA's request,
with a reasonable quantity (of at least six (6) and such greater quantity as
may be mutually agreed) of additional accepted functional prototypes of
LIQUID-HANDLING HEADS and DETECTORS for development, evaluation, and use by
AURORA or its customers, at ***.
3.2.3 Upon delivery of a subsequent generation of functional
prototype for a particular PRODUCT or PACKARD's notice of availability of a
production model of a particular PRODUCT, the previous generation functional
prototype of such PRODUCT provided under Article 3.2.1 shall within ninety (90)
days, at AURORA's election, be returned to PACKARD or purchased by AURORA at
PACKARD's fully burdened manufacturing cost.
3.3 JOINT OBLIGATIONS. AURORA and PACKARD will use commercially
reasonable efforts to have designed and arranged for evaluation, production and
delivery of experimental NANO-PLATES to AURORA *** after the Effective Date and
to arrange for commencement of manufacture of NANO-PLATES *** after the
Effective Date. PACKARD and AURORA contemplate that the development and
production of NANO-PLATES will be outsourced to a suitable manufacturer
acceptable to both AURORA and PACKARD. PACKARD shall be responsible for any
costs associated with such development and manufacture. It is understood and
agreed that AURORA and PACKARD will each own an undivided one-half interest in
all intellectual property relating to the NANO-PLATES.
3.4 MODIFICATIONS TO DEVELOPMENT SCHEDULE. The parties recognize
that circumstances may require adjustment to or modification of the development
schedules set forth
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above. Any such adjustment or modification shall be subject to mutual
agreement by AURORA and PACKARD.
3.5 SPECIFICATIONS. The parties shall use commercially reasonable
efforts to ensure that the PRODUCTS will meet AURORA's requirements as defined
in Addendum 3 hereto.
3.6 STAFF. The projects may involve AURORA staff being temporarily
assigned to work at PACKARD facilities and/or PACKARD staff being temporarily
assigned to work at AURORA facilities. Each party will bear the costs of its
own staff and any liabilities incurred thereby.
IV. FINANCING
4.1 GENERAL. Except as expressly provided herein, AURORA and
PACKARD each agrees to bear all costs and expenses incurred in complying with
its obligations under this Agreement.
4.2 PACKARD CONTRIBUTION. On the Effective Date, PACKARD will
purchase *** of AURORA preferred stock *** ***, per the Preferred Stock Purchase
Agreement attached as Addendum 5.
4.3 AURORA CONTRIBUTIONS. AURORA shall pay to PACKARD the
following amounts during the Collaboration Program:
4.3.1 *** shall be paid *** the ***.
4.3.2 *** shall be paid ***.
4.3.3 *** the *** for *** shall be paid *** the *** shall be
paid ***
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4.3.4 If the scope of the Collaboration Program shall be
modified by mutual agreement, for example, to encompass the development of a
technically distinct imaging system for NANO-PLATES, then the parties shall
negotiate on a case-by-case basis such further contributions by AURORA as may
be mutually agreed. Any agreement by AURORA to make additional contributions
may include such other terms as shall be mutually agreed, such as, for example,
the payment of additional negotiated royalties.
V. LICENSES
5.1 UC LICENSE. AURORA agrees to use its best efforts to negotiate
and execute on or before June 30, 1996 an exclusive license agreement with UC
as contemplated by the Letter Agreement attached as Addendum 1. Within seven
(7) days after execution thereof, AURORA shall deliver to PACKARD a true copy
of such UC LICENSE and the parties shall also cause a true copy thereof to be
attached to this Agreement as Addendum 2.
5.2 UC REAGENTS.
5.21 SUBLICENSE. Subject to the terms and conditions of
this Agreement and the execution of the UC License, effective upon execution of
the UC LICENSE, AURORA ***
5.2.2 RUNNING ROYALTIES. In consideration of the foregoing
sublicense, PACKARD hereby agrees to pay to AURORA royalties on the sale of
AURORA UC REAGENTS to non-profit organizations pursuant to this sublicense equal
to *** *** of such AURORA UC REAGENTS. It is understood and agreed that AURORA
shall be solely responsible for all royalties and other payments due or payable
to the UC under the UC LICENSE, and AURORA hereby agrees to indemnify, defend,
and hold PACKARD harmless from and against any claim or liability arising from
any failure of AURORA to fulfill its obligations to the UC, except if caused by
any action or inaction by PACKARD.
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5.2.3 *** ROYALTIES. PACKARD shall exercise reasonable
diligence to market AURORA UC REAGENTS hereunder and, for so long as the
sublicense remains exclusive, agrees to pay to AURORA *** royalties according to
the following schedule:
***
Such amounts shall be paid on the applicable anniversary of the UC License
Effective Date, and shall be fully creditable against running royalties due in
the year such minimum annual royalty payment is made.
5.2.4 ***
5.3 ADDITIONAL RIGHTS. PACKARD will have the right of first
negotiation with respect to:
5.3.1 the right to make, have made and/or sell AURORA UC
REAGENTS to for-profit organizations; and
5.3.2 the right to make, have made and/or sell AURORA
REAGENTS other than AURORA UC REAGENTS, including, but not limited to,
promiscuous G-proteins which AURORA may own or otherwise control, in the event
that AURORA wishes such AURORA REAGENTS to be sold and does not wish to conduct
such activities itself.
5.3.3 If PACKARD wishes to exercise its right of first
negotiation with respect to a particular AURORA REAGENT, including any AURORA
UC REAGENT, it shall notify AURORA, and in such event AURORA and PACKARD shall
negotiate exclusively in good faith for a period of ninety (90) days with
respect to an agreement with respect thereto. If AURORA and PACKARD fail to
enter into a written letter of intent for such an agreement or agreement within
such period, or such longer period as the parties may agree, then AURORA shall
be free to enter into negotiations and definitive agreements with a third party
regarding such a license to such AURORA REAGENTS, and PACKARD shall have no
further rights with respect thereto.
5.4 CROSS LICENSES.
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5.4.1 AURORA hereby grants ***
***
***
5.4.2 PACKARD hereby grants ***
VI. PRODUCT COMMERCIALIZATION AND EXCLUSIVITY
6.1 MANUFACTURING RIGHTS. During the term of this Agreement,
PACKARD shall *** During the term of this Agreement, the parties agree that
production quality NANO-PLATES shall be produced by a mutually agreed
independent third party manufacturer.
6.2 SUPPLY AGREEMENT. During the term of this Agreement, PACKARD
agrees to sell to AURORA such PRODUCTS as AURORA may wish to purchase. At
least three (3) months prior to the launch of any PRODUCT, AURORA and PACKARD
shall negotiate in good faith and enter into a Supply Agreement which shall
contain reasonable terms for the purchase by AURORA of PRODUCTS from PACKARD
including warranties, indemnities and the like.
6.3 PRODUCT COMMERCIALIZATION.
6.3.1 Unless otherwise agreed by the parties, all
production PRODUCTS purchased by AURORA from PACKARD shall be sold by PACKARD
***
6.3.2 PACKARD will have responsibility for distribution,
installation, and service support for all production PRODUCTS in line with
PACKARD's customary practice in territories where PACKARD has a subsidiary as
of the Effective Date, or as otherwise mutually agreed. The parties agree that
PACKARD shall have responsibility for such activities in Korea.
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6.4 LIQUID-HANDLING HEADS.
6.4.1 For a period of *** from and after the Acceptance Date
of an accepted functional prototype LIQUID-HANDLING HEAD containing arrays of
ninety-six (96) or more PIEZO-DEVICES, AURORA shall have the *** After the
foregoing *** , PACKARD and AURORA ***
6.4.2 If within ***
6.4.3 Except as provided in Articles 6.4.1 and 6.4.2,
PACKARD shall ***
6.4.4 For purposes of this Article 6.4, "accepted functional
prototype" shall have the meaning set forth in the last paragraph of
Article 3.2.1.
6.5 DETECTOR.
6.5.1 For a period of ***
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***. For purposes of this Article 6.5, "accepted functional prototype" shall
have the meaning set forth in the last paragraph of Article 3.2.1.
6.5.2 Except as provided in Article 6.5.1, PACKARD shall
have the exclusive worldwide rights to make, have made and sell (including the
right to sublicense others) DETECTORS for all assays, applications, sample
densities and markets.
6.6 NANO-PLATES.
6.6.1 For a period of ***. After the foregoing ***. During
the initial term of this Agreement, neither party may grant any third party a
license with respect to any intellectual property relating to the NANO-PLATES or
have the NANO-PLATES made by a third party, without the prior written consent of
the other party hereto.
6.6.2 PACKARD shall pay royalties to AURORA of *** of
NANO-PLATES to third parties.
6.6.3 AURORA and PACKARD will equally share ownership and
the right to use the "NANO-PLATE" trademark and any variant thereof. Each
party shall notify the other and provide the other samples of any intended use
of such trademarks, and agrees to make any changes reasonably requested by the
other party in order to protect the value of such trademarks. Neither party
shall grant any third party any right to use any such trademarks without the
prior written consent of the other party, and neither shall attempt to solely
register any trademarks, service marks, logos or tradenames confusingly similar
to the "NANO-PLATE" or any variant thereof.
6.7 AURORA RIGHTS.
6.7.1 If a DETECTOR which does not use any AURORA
TECHNOLOGY, including, without limitation, any AURORA patent rights, is
developed based upon JOINT TECHNOLOGY, and if AURORA shall contribute
financially, as mutually agreed, in excess of its initial financial
contribution set forth in Article 4.3, PACKARD shall pay to AURORA royalties
on the Net Sales of such DETECTORS in an amount to be negotiated in
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good faith and agreed to by the parties at the time of such further
contribution, ***. ***.
6.7.2 If the parties shall co-develop IMAGERS or DETECTORS
that substantially use any AURORA TECHNOLOGY, which the parties agree may
require a further financial contribution from AURORA in excess of its initial
contribution set forth in Article 4.3, PACKARD shall pay to AURORA royalties on
the Net Sales of such IMAGERS or DETECTORS in an amount to be negotiated in
good faith and agreed to by the parties ***
6.7.3 If PACKARD decides within six (6) months of delivery
of a DETECTOR which meets agreed performance specifications not to
commercialize such DETECTOR, AURORA shall have a right, exercisable for a
period of three (3) months, to obtain from PACKARD an exclusive license, with
the right to grant and authorize sublicenses, to make, have made and sell such
DETECTOR. Such license shall provide for payment of royalties to PACKARD on
net sales of such DETECTORS by AURORA, its AFFILIATES and sublicensees in an
amount to be mutually agreed upon equal to the sum of *** to ***. In the event
of exercise of such right, PACKARD will provide, at AURORA's cost, all
specifications, plans, protocols, technical drawings, component lists, etc.
required for the manufacture, quality control and service support of the
DETECTOR.
6.7.4 AURORA will have the right of first negotiation with
respect to the co-development or commercialization of any PRODUCT which PACKARD
does not wish to commercialize for HTS or AUTOMATED CHEMISTRY which utilizes
any PACKARD TECHNOLOGY, provided AURORA shall have made a contribution to
development costs of those new technologies as mutually agreed. If AURORA
wishes to exercise its right of first negotiation, it shall notify PACKARD, and
in such event PACKARD and AURORA shall negotiate exclusively in good faith for
a period of ninety (90) days with respect to an agreement with respect thereto.
If PACKARD and AURORA fail to enter into a written letter of intent for such an
agreement or agreement within such period, or such longer period as the parties
may agree, then PACKARD shall be free to enter into negotiations and definitive
agreements with a third party regarding a co-development or commercialization
of such technology and AURORA shall have no further rights with respect
thereto.
6.7.5 If AURORA desires to purchase PACKARD's proprietary
reagents for its *** be ***. AURORA's access to such PACKARD reagents
will not be subject to a licensing fee or royalty. On a case-by-case basis,
AURORA will have first right of negotiation for exclusive rights for the use,
market and sell PACKARD'S HTRF homogenous time resolved fluorescence
technology, associated reagents, and instrumentation and/or luminescent
technology and associated reagents for HTS in NANO PLATES for a period of ***
from the
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Effective Date, but AURORA may not sublicense such intellectual property
without prior written consent from PACKARD.
6.8 RESIDUAL RIGHTS. Except as hereinabove expressly granted to
AURORA, PACKARD shall have the exclusive rights with respect to the PRODUCTS.
VII. ROYALTY REPORTS AND PAYMENTS
7.1 After the first commercial sale of a PRODUCT or AURORA'S UC
REAGENTS on which royalties are required hereunder, PACKARD shall make
quarterly written reports to AURORA within thirty (30) days after the end of
each calendar quarter, stating in each such report the aggregate Net Sales of
the PRODUCTS and AURORA UC REAGENTS sold during the calendar quarter upon which
a royalty is payable hereunder, and an annual report on or before February 28
of each year stating the number, description and aggregate Net Sales of
PRODUCTS and AURORA UC REAGENTS sold during the preceding calendar year.
AURORA shall treat all such reports as confidential information of PACKARD.
Concurrently with the making of such reports, PACKARD shall pay to AURORA the
applicable royalties specified in this Agreement.
7.2 Royalties due hereunder shall be paid in U.S. dollars. All
checks and bank drafts shall be drawn on United States banks and shall be
payable to AURORA at the address listed herein.
7.3 If any currency conversion shall be required in connection
with the calculation of royalties hereunder, such conversion shall be made
using the selling exchange rate for conversion of the foreign currency into
U.S. dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
7.4 PACKARD shall keep complete, true, and accurate books of account
and records, including number and description of PRODUCTS and AURORA UC REAGENTS
sold, for the purpose of determining the royalty amounts payable under this
Agreement. Such books and records shall be kept at the principal place of
business of PACKARD for at least three (3) years following the end of the
calendar quarter to which such books and records pertain. Such books and
records shall be open for inspection at the principal place of business of
PACKARD during such three (3) year period by a representative selected by AURORA
for the purpose of verifying the royalty statements. Such inspections shall be
made at reasonable times as mutually agreed. The representative will be obliged
to execute a reasonable confidentiality agreement on terms consistent with the
terms of this Agreement prior to commencing any such inspection. Inspections
conducted under this Article shall be at the expense of AURORA, unless a
variation or error producing *** of the amount stated as having been due by
PACKARD for any period covered by the inspection is established in the course of
any such inspection, or through arbitration under Article 12.1, whereupon all
costs relating to the inspection for such period and any unpaid amounts that are
so established shall be paid by PACKARD.
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VIII. INTELLECTUAL PROPERTY RIGHTS
8.1 OWNERSHIP.
8.1.1 Except as otherwise expressly provided in this
Agreement, AURORA shall retain all right, title and interest in and to any
intellectual property invented, developed or acquired solely by AURORA
employees during the term of this Agreement, and PACKARD shall retain all
right, title and interest in and to any intellectual property invented,
developed or acquired solely by PACKARD employees during the term of this
Agreement.
8.1.2 Except as provided in Article 8.1.3, all right, title
and interest in and to intellectual property, whether or not patentable, that
is invented or developed by at least one employee or agent of AURORA and at
least one employee or agent of PACKARD in connection with the Collaboration
Program shall be owned jointly by PACKARD and AURORA ("JOINT TECHNOLOGY").
Inventorship of inventions and other intellectual property conceived and
reduced to practice in connection with the Collaboration Program, and the
rights of ownership with respect to such inventions and other intellectual
property, whether such JOINT TECHNOLOGY is patentable or not, shall be
determined in accordance with United States patent law.
8.1.3 All right, title and interest to the JOINT TECHNOLOGY
having specific and direct application only to the PACKARD TECHNOLOGY and any
new techniques and methods used to apply the PACKARD TECHNOLOGY and having
specific and direct application only to the PACKARD TECHNOLOGY, whether made
solely by PACKARD or by AURORA, or jointly by any employees or agents of any of
PACKARD and AURORA, and resulting from the collaboration hereunder shall be
owned exclusively by PACKARD, and all rights, title and interests to any JOINT
TECHNOLOGY having specific and direct application only to the AURORA TECHNOLOGY
and any new techniques and methods used to apply the AURORA TECHNOLOGY and
having specific and direct application only to the AURORA TECHNOLOGY, whether
made solely by AURORA or by PACKARD, or jointly by any employees or agents of
any of AURORA and PACKARD, and resulting from the collaboration hereunder shall
be owned exclusively by AURORA. Each party shall, upon the request of the
other, execute and deliver to the requesting party an assignment and release,
or other appropriate document, with respect to all such rights owned by the
requesting party.
8.2 PATENT PROSECUTION.
8.2.1 AURORA will be responsible for the preparation,
prosecution and maintenance of the AURORA TECHNOLOGY and conducting
oppositions, re-examination and interferences with respect thereto, using
patent counsel of its choice and according to AURORA's reasonable business and
scientific judgment. AURORA will pay all costs of conducting such activities
with respect to the AURORA TECHNOLOGY.
8.2.2 PACKARD will be responsible for the preparation,
prosecution and maintenance of the PACKARD TECHNOLOGY and conducting
oppositions,
17
re-examination and interferences with respect thereto, using patent counsel of
its choice and according to PACKARD's reasonable business and scientific
judgment. PACKARD will pay all costs of conducting such activities with
respect to the PACKARD TECHNOLOGY.
8.2.3 Each party will cooperate with the other as reasonably
requested in obtaining patent protection for JOINT TECHNOLOGY and shall agree
on which party shall have principal authority for conducting such activities
with respect to such patent application. Each party shall keep the other
informed as to material developments in this regard. AURORA and PACKARD shall
equally share the expenses related to obtaining and maintaining patents with
regard to any inventions within the JOINT TECHNOLOGY in the names of AURORA
and PACKARD; provided, with ninety (90) days notice either party may decline
to fund such activities with regard to any patent application or patent within
the JOINT TECHNOLOGY, in which event the other party shall have ninety (90)
days to decide to pursue such patent application or patent at its expense.
8.3 PATENT ENFORCEMENT.
8.3.1 AURORA and PACKARD will immediately inform each other
of any actual or suspected infringement of the AURORA TECHNOLOGY, PACKARD
TECHNOLOGY or JOINT TECHNOLOGY by third parties which such party hereto would
reasonably believe would effect the commercial success of a PRODUCT or an
AURORA REAGENT.
8.3.2 Unless otherwise agreed between the parties, each
shall have the right, but not the obligation, to bring proceedings against any
infringer of the technology solely owned by it, at its risk and expense, and
shall be entitled to retain any award or damages obtained in any such suit or
proceeding. At the request and expense of either party, the other party shall
give the requesting party all reasonable assistance required to institute and
carry on any such suit or proceeding.
8.3.3 The parties shall confer to determine how to xxxxx
any infringement with respect to JOINT TECHNOLOGY, and how any recovery from
such an action shall be allocated between the parties.
8.4 COOPERATION. The parties shall cooperate with each other and
keep each other informed of all material developments regarding activities
relating to preparation, filing, prosecution and maintenance of patents and
patent applications in the JOINT TECHNOLOGY and in AURORA TECHNOLOGY and
PACKARD TECHNOLOGY, to the extent such technology was conceived, reduced to
practice, or otherwise developed after the Effective Date and which relates to
the Collaboration Program.
8.5 INFRINGEMENT CLAIMS.
8.5.1 If the manufacture, sale or use of a UC REAGENT
results in any claim, suit or proceeding brought by a third party alleging
patent infringement against a party
18
hereto, such party shall promptly notify the other party. AURORA shall have
the initial right, but not the obligation, to defend and control the defense of
any such claim, suit or proceeding, using counsel of its own choice, and at its
expense. If any such claim, suit or proceeding is made or brought against
PACKARD, AURORA shall promptly confirm to PACKARD in writing that it is
undertaking the defense thereof hereunder. If AURORA shall not elect to defend
any claim, suit or proceeding, or fails to so confirm to PACKARD, PACKARD may
elect to defend and control the defense of such claim, suit or proceeding at
its expense and with counsel of its choice, but shall have no obligation to
provide a defense for AURORA. Each party shall cooperate with the other in any
matter arising hereunder and shall keep the other reasonably informed of all
material developments in connection with any such claim, suit or proceeding.
8.5.2 If the manufacture, sale or use of a PRODUCT results
in any claim, suit or proceeding alleging patent infringement against a party
hereto, such party shall promptly notify the other party. PACKARD shall defend
and control the defense of any such claim, suit or proceeding, using counsel of
its own choice, and shall keep AURORA reasonably informed of all material
developments in connection with any such claim, suit or proceeding.
IX. INDEMNITY
9.1 AURORA. AURORA shall indemnify, defend and hold harmless
PACKARD and its AFFILIATES, and the directors, officers, employees, agents and
counsel of PACKARD and such AFFILIATES, and the successors and assigns of any
of the foregoing (the "PACKARD Indemnitees"), from and against any and all
liabilities, damages, losses, costs or expenses (including reasonable
attorneys' and professional fees and other expenses of litigation and/or
arbitration) resulting from a claim, suit or proceeding brought by a third
party against a PACKARD Indemnitee, arising from or occurring as a result of
(a) activities performed by AURORA in the Collaboration Program, except to the
extent caused by the negligence or willful misconduct of a PACKARD Indemnitee;
or (b) use by PACKARD of AURORA TECHNOLOGY (other than patent rights subject to
the UC LICENSE as to which no indemnification is provided); or (c) the use by
PACKARD of, or the manufacture or commercialization by PACKARD of, any AURORA
REAGENTS (other than AURORA UC REAGENTS as to which no indemnification is
provided) or any PRODUCT to the extent it embodies AURORA TECHNOLOGY (other
than patent rights subject to the UC LICENSE as to which no indemnification is
provided).
9.2 PACKARD. PACKARD shall indemnify, defend and hold harmless
AURORA and its AFFILIATES and the directors, officers, employees, agents and
counsel of AURORA and such AFFILIATES and the successors and assigns of any of
the foregoing (the "AURORA Indemnitees"), from and against any and all
liabilities, damages, losses, costs or expenses (including reasonable
attorneys' and professional fees and other expenses of litigation and/or
arbitration) resulting from a claim, suit or proceeding brought by a third
party against a AURORA Indemnitee, arising from or occurring as a result of (a)
activities performed by PACKARD in the Collaboration Program, except to the
extent caused by the negligence or willful misconduct of an AURORA Indemnitee;
or (b) use by AURORA of PACKARD
19
TECHNOLOGY; or (c) the use by AURORA of, or the commercialization by AURORA of,
any PRODUCT to the extent it embodies PACKARD TECHNOLOGY.
9.3 PROCEDURE. If any party intends to claim indemnification
under this Article IX, it shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action and
the Indemnitor shall have the right to assume the defense thereof with counsel
mutually satisfactory to the parties. The indemnity agreement in this Article
IX shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article IX. At the Indemnitor's request, the Indemnitee under this
Article IX, and its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by this indemnification and provide full information
with respect thereto.
X. TERM; TERMINATION
10.1 TERM.
10.1.1 The initial term of this Agreement shall be for ten
(10) years from the Effective Date, unless terminated earlier pursuant to
Section 10.2. The parties may renew the Agreement beyond ten (10) years if key
objectives are substantially achieved, on terms to be negotiated in good faith.
10.1.2 If this Agreement is not terminated pursuant to
Section 10.2 or the mutual consent of the parties prior to the end of the
initial term, at the end of the initial term, except as otherwise expressly set
forth herein, all rights granted under this Agreement shall terminate;
provided, the license granted PACKARD under Section 5.2.1 shall convert to a
non-exclusive license and shall remain in effect, subject to the royalty and
other obligations set forth in this Agreement, until the expiration of the last
to expire patent within the UC LICENSE relating to the AURORA UC REAGENTS being
sold at the end of the initial term.
10.2 TERMINATION FOR BREACH.
10.2.1 Either party shall have the right to terminate this
Agreement at any time for a material breach of this Agreement by the other
party, provided that the non-breaching party shall have first given ninety (90)
days prior written notice to the breaching party describing such breach and
stating the non-breaching party's intention to terminate this Agreement if such
breach remains uncured, and the breaching party thereafter fails to cure same.
Upon any such termination of this Agreement, all licenses and sublicenses in
force at the time of termination shall terminate concurrently.
20
10.2.2 Either party shall have the right to terminate this
Agreement pursuant to this Section 10.2 if the other party has failed to meet
any milestone applicable to it as specified in Article 3.1.1 or 3.2.1 above and
the parties fail to reach a mutually satisfactory resolution after good faith
negotiation within ninety (90) days after such failure; provided, in the event
that the party which failed to meet the milestone used reasonable good faith
efforts to accomplish such milestone, then the Agreement shall not terminate,
but, at the election of the non-breaching party may be modified as follows:
(a) ***
(b) ***
10.3 SURVIVAL. No termination hereunder shall constitute a waiver
of any rights or causes of action that either party may have for any acts or
omissions or breach hereunder by the other party prior to the termination date.
Articles 2.5, 4.1, 6.6.3, 6.8, 8.1, 8.2, 8.4, 8.5, and VII, IX, X, XI and XII
(all paragraphs) shall survive any termination of this Agreement.
10.4 RETURN OF MATERIALS. Upon any termination of this Agreement,
each party shall promptly return to the other party all CONFIDENTIAL
INFORMATION received from the other party (except one copy of which may be
retained for archival purposes).
10.5 FORCE MAJEURE. Except as expressly provided otherwise herein,
any delays in or failures of performance by either party under this Agreement
shall not be considered a breach of this Agreement if and to the extent caused
by occurrences beyond the reasonable control of the party affected, including
but not limited to: acts of God, earthquake, new regulations or laws of any
government; strikes or other concerted acts of workers; fire, floods,
explosions; riots; wars; rebellion; and, sabotage, and any time for
performances hereunder shall be extended by the time of delay reasonable
occasioned by such occurrence.
XI. CONFIDENTIALITY
11.1 CONFIDENTIAL INFORMATION. Except as expressly provided
herein, the parties agree that, for the term of this Agreement and for five (5)
years thereafter, the receiving party shall keep completely confidential and
shall not publish or otherwise disclose and shall not use for any purpose
except for the purposes contemplated by this Agreement any CONFIDENTIAL
INFORMATION furnished to it by the disclosing party hereto pursuant to this
***CONFIDENTIAL TREATMENT REQUESTED
21
Agreement, except that to the extent that it can be established by the
receiving party by competent proof that such CONFIDENTIAL INFORMATION:
11.1.1 was already known to the receiving party, other than
under an obligation of confidentiality, at the time of disclosure;
11.1.2 was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving party;
11.1.3 became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act
or omission of the receiving party in breach of this Agreement; or
11.1.4 was subsequently lawfully disclosed to the receiving
party by a person other than a party hereto.
11.2 PERMITTED USE AND DISCLOSURES. Each party hereto may use or
disclose CONFIDENTIAL INFORMATION disclosed to it by the other party to the
extent such use or disclosure is reasonably necessary in prosecuting or
defending litigation, or complying with applicable governmental regulations or
otherwise submitting information to tax or other governmental authorities,
provided that if a party is required to make any such disclosure of another
party's confidential information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the latter party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its best efforts to secure confidential treatment of
such information prior to its disclosure (whether through protective orders or
otherwise).
11.3 PUBLICITY. Neither party shall, in connection with its
activities under this Agreement, use the name of the other party in any
advertising, promotional or sales literature, or other publicity, without prior
written consent obtained from the other party, which consent shall not be
unreasonably withheld; provided, once consent is obtained with respect to a
particular disclosure, further disclosures which do not materially differ may
be made without any requirement for the further consent of the other party.
11.4 CONFIDENTIAL TERMS. Except as expressly provided herein, each
party agrees not to disclose any terms of this Agreement to any third party
without the consent of the other party; provided, disclosures may be made as
required by securities or other applicable laws, or to actual or prospective
investors or corporate partners, or to a party's accountants, attorneys and
other professional advisors.
XII. GENERAL
12.1 ARBITRATION. Except as otherwise provided specifically
herein, any controversy or claim under this Agreement shall be settled by
arbitration by one arbitrator pursuant to the Commercial Arbitration Rules of
the Association of the American Arbitration Association (the
22
"Association"); provided that the parties shall first use their best efforts to
resolve such dispute by negotiation. The arbitration shall be conducted in
Dallas, Texas, or such other site as may be agreed by the parties. The
arbitrator shall be selected by the joint agreement of the parties, but if they
do not so agree within twenty (20) days of the date of a request for
arbitration, the selection shall be made pursuant to the rules of the
Association. The decision reached by the arbitrator shall be conclusive and
binding upon the parties hereto and may be filed with the clerk of any court of
competent jurisdiction, and a judgment confirming such decision may, if desired
by any party to the arbitration, be entered in such court. Each of the parties
shall pay its own expenses of arbitration and the expenses of the arbitrator(s)
shall be equally shared; provided, however, that if in the opinion of the
arbitrator(s) any claim hereunder or any defense or objection thereto was
unreasonable, the arbitrator(s) may assess, as part of the award, all or any
part of the arbitration expenses (including reasonable attorneys' fees) against
the party raising such unreasonable claim, defense or objection. Nothing
herein set forth shall prevent the parties from settling any dispute by mutual
agreement at any time.
12.2 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon the parties' respective successors and permitted assigns. Neither party
may assign this Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party (not to be unreasonably withheld),
and any such attempted assignment shall be void; provided, that either party
may assign this Agreement as part of a merger or consolidation in which the
surviving entity assumes all of such party's rights and obligations hereunder
or a sale of substantially all of the assets of such party to which this
Agreement relates.
12.3 NOTICES. Any legal or other formal notices under this
Agreement shall be in writing and shall be hand delivered, or sent either by
registered mail, return receipt requested, or other method capable of providing
reasonable proof of receipt thereof, to the attention of the party receiving
such communication at the address first set forth or at such other address as
either party may in the future specify to the other party.
12.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
regard or giving effect to its principles of conflict of laws.
12.5 AMENDMENT. No modification, supplement to or waiver of this
Agreement or any Addendum hereto or any of their provisions shall be binding
upon a party hereto unless made in writing and duty signed by the party to be
charged herewith. In no event may the terms of this Agreement be changed,
deleted, supplemented or waived by any notice, purchase order, receipt,
acceptance, xxxx of lading or other similar form of document. A failure of
either party to exercise any right or remedy hereunder, in whole or in party,
or on one or more occasions, shall not be deemed either a waiver of such right
or remedy to the extent not exercised, or of any other right or remedy, on such
occasion or a waiver of any right or remedy on any succeeding occasion.
12.6 ENTIRE AGREEMENT. This Agreement, and each Addendum attached
hereto, and each supplemental written agreement contemplated hereunder, sets
forth the entire understanding and agreement of the parties as to the subject
matter thereof, and there are no other
23
understandings, representations or promises, written or verbal, not set forth
therein or on which either party has relied. If any provisions of any such
Addendum or supplemental written agreement conflict with any provisions set
forth in this Agreement, the provisions of this Agreement shall take
precedence, unless such Addendum or supplemental written agreement expressly
refers to the specific provision(s) of this Agreement that it is intended to
replace or modify (and which shall be limited in force and effect to such
Addendum or supplemental written agreement only).
12.7 SEVERABILITY. This Agreement is intended to be severable. If
any provision(s) of this Agreement are or become invalid, are ruled illegal by
a court of competent jurisdiction or are deemed unenforceable under the current
applicable law from time to time in effect during the term hereof, it is the
intention of the parties that the remainder of the Agreement shall not be
affected thereby and shall continue to be construed to the maximum extent
permitted by law at such time. It is further the intention of the parties that
in lieu of each such provision which is invalid, illegal, or unenforceable,
there shall be substituted or added as part of this Agreement by such court of
competent jurisdiction a provision which shall be as similar as possible, in
economic and business objectives as intended by the parties to such invalid,
illegal or unenforceable provision, but shall be valid, legal and enforceable.
12.8 INDEPENDENT CONTRACTORS. The parties hereto are acting as
independent contractors and shall not be considered partners, joint venturers
or agents of the other. Neither shall have the right to act on behalf of, or
to bind, the other.
12.9 PATENT MARKING. PACKARD agrees to xxxx all AURORA UC REAGENTS
sold pursuant to this Agreement in accordance with the applicable statute or
regulations relating to patent marking in the country or countries of
manufacture and sale thereof.
12.10 HEADINGS. Captions and paragraph headings are for convenience
only and shall not form an interpretative part of this Agreement. Unless
otherwise specifically provided, all references to an Article incorporate all
Articles or subsections thereunder. This Agreement shall not be strictly
construed against either party hereto.
24
IN WITNESS WHEREOF, the undersigned parties, acting through their duly
authorized representatives, have executed this Agreement in multiple
counterparts.
PACKARD INSTRUMENT COMPANY, INC.
By:____________________________________
Name: _________________________________
Title: __________________________________
Date: __________________________________
AURORA BIOSCIENCES CORPORATION
By: ____________________________________
Name: __________________________________
Title: __________________________________
Date: ___________________________________
25
APPENDIX A
*** CONFIDENTIAL TREATMENT REQUESTED
26
ADDENDUM 1
[UNIVERSITY OF CALIFORNIA LETTERHEAD]
OFFICE OF THE SENIOR VICE-PRESIDENT-- OFFICE OF TECHNOLOGY TRANSFER
BUSINESS AND FINANCE 0000 Xxxxxx Xxx Xxxxxxx,Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
tel.: (000) 000-0000
fax: (000) 000-0000
March 4 1996
Xxxxxxx Xxxxxx, Esq.
Wilson, Sonsini, Xxxxxxxx, & Xxxxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Re: Xxxxx Xxxxx'x Technologies
UCC Case No. ***
Dear Xxxxxxx:
The purpose of this letter agreement ("Letter Agreement") is to confirm the
offer by The Regents of the University of California ("The Regents") to license
Aurora Biosciences Corporation. ("Aurora") the exclusive patent rights of
The Regents in the inventions described in *** generally referred
to as GFP and Beta Lactamase technologies ("Regents' Patent Rights") and
property rights covering the associated biological materials owned by The
Regents ("Regents' Property Rights"), under, but not limited to, those terms and
conditions specified in this Letter Agreement. During the period that this
Letter Agreement is in effect, The Regents will not license Regents' Patent
Rights and Regents' Property Rights to any other party other than the U.S.
Government, and will otherwise not encumber Regents' Patent Rights and Regents'
Property Rights in a manner inconsistent with the provisions of this Letter
Agreement.
The license agreement resulting from the negotiations will contain the following
terms and conditions:
GRANT: ***
U.C. AGREEMENT
CONTROL NUMBER
96-30-0558
**CONFIDENTIAL TREATMENT REQUIRED
27
***
License Issue Fee: Aurora will pay to The Regents a license issue fee of
[***] payable according to the following schedule:
[***]
[***]
[***]
[***]
Such amounts paid to The Regents will not be
refundable, creditable, or reimbursable against any
other fees, royalties, and reimbursements due The
Regents.
Milestone Payments: Aurora will pay to The Regents [***] and [***] from
each third party with which it enters into a corporate
alliance for screening services utilizing Regents'
Patent Rights and Regents' Property Rights. Aurora
will not pay to The Regents any royalty on any amounts
it receives for equity, research funding, debt
financing, reimbursement of patent filing, prosecution,
and maintenance expenses, or other expenses (as agreed
upon by the parties). The amounts paid to The Regents
under this section will not be creditable or
reimbursable against any other royalties and fees due
The Regents.
Royalties: Aurora will pay to The Regents the following royalties:
A. A royalty of [***] by Aurora or its sublicensees of
each product identified with the use of the
technology covered by Regents' Patent Rights and
Regents' Property Rights, and a royalty of [***] of
each such product; provided, however, that *** [***]
as specified immediately above, then the royalty due
to The Regents will be [***]. In the event Aurora is
unable to negotiate a royalty based on the net sales
of a product identified with the use of the
technology covered by Regents' Patent Rights and
Regents' Property Rights, then in no case will Aurora
be entitled to take, in lieu of royalties on net
sales of identified products, consideration in any
form for equity in Aurora above fair market value,
research funding for screening to identify products
in excess of fully
*** CONFIDENTIAL TREATMENT REQUESTED
2
28
burdened direct and indirect costs therefore, or reimbursement
of patent filing, prosecution, and maintenance expenses, or
other expenses (as agreed upon by the parties.)
B. A royalty of *** and its sublicensees of a research reagent and
any other product covered by Regents' Patent Rights and Regents'
Property Rights. Aurora will be entitled to reduce the royalty
due The Regents on the sale of such products if Aurora must
license Regents' Patent Rights, Regents' Property Rights, and
intellectual property rights in which The Regents has no
ownership interest from a third party. In such event, *** Aurora
may *** provided, however, that *** .
Aurora will not be entitled to apply the royalty reduction
specified in Paragraph B of this section to royalties due The
Regents under Paragraph A of this section or any other sections of
the Letter Agreement.
Minimum Annual
Royalties: Beginning *** of the license agreement, Aurora will pay
to The Regents ***. The *** will be paid to The Regents
whether or not a product covered by the license
agreement is available for sale in any country on that
date. Such amount will be credited against earned
royalties due The Regents.
Patent Prosecution
Reimbursement: Aurora will reimburse The Regents for all legal costs
associated with obtaining U.S. and foreign patent
protection comprising The Regents' Patent Rights.
Research Reagents: The Parties have also agreed to the following:
A. Aurora will make available, or have made available, the
research reagents listed on Exhibit A which comprise
biological materials covered by Regents' Property Rights
to nonprofit/academic institutions solely for this
internal, noncommercial research use within one year
following the effective date of the license agreement or
six months after
*** CONFIDENTIAL TREATMENT REQUESTED
3
29
publication of the first paper describing the use of the
reagent, whichever is later.
B. The Regents will initially supply Aurora with aliquots of
chemical and biological materials and reagents covered by the
Regents' Patent Rights and Regents' Property Rights currently
held in Xx. Xxxxx'x laboratory at UCSD, in sufficient amounts
(to be agreed upon by the parties), to facilitate the
development and commercialization by Aurora of products and
services contemplated under the license agreement.
In addition to the terms and conditions specified in this Letter Agreement, the
license agreement will also contain other terms and conditions agreed upon by
the parties that are normally found in exclusive license agreements executed by
The Regents.
Unless otherwise terminated by the parties hereto, the term of this Letter
Agreement will be for a period commencing on February 6, 1996, and terminating
on June 30, 1996, unless terminated by Aurora prior to that date. If Aurora and
The Regents have not executed the licence agreement on or before June 30, 1996,
The Regents will withdraw its offer to license Aurora under the terms and
conditions specified in this Letter Agreement on that date without further
obligation to Aurora.
If you accept The Regents' offer under the terms and conditions stated herein,
please execute this Letter Agreement, signifying your acceptance, below and
return both fully-executed originals of this Letter Agreement to me. We will
co-execute the Letter Agreement and return one fully-executed original to you.
Agreed to by:
AURORA BIOSCIENCES CORPORATION THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA
By Xxxxxxx X. Xxxx By Xxxxxxx Xxxxxxx
--------------------------- ---------------------------------
(Signature) (Signature)
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx Xxxxxxx
-------------------------
(Please Print)
Title: President and CEO Title: Licensing Manager
------------------------ Office of Technology Transfer
Date: 3/6/96 Date: 3/6/96
------------------------- -----------------------------
30
Certain confidential portions of this Exhibit were omitted by means of blackout
of the text (the "Xxxx"). This Exhibit has been filed separately with the
Secretary of the Commission without the Xxxx pursuant to the Company's
Application Requesting Confidential Treatment under Rule 406 under the
Securities Act.
Exclusive License Agreement
between
The Regents of the University of California
and
Aurora Biosciences, Corp.
for
Fluorescent Assay Technologies
U.C. Case Nos. 93-289, 95-110, 95-219, 96-044, 96-160, 96-161, 96-162, 96-191
31
Table of Contents
ARTICLE PAGE
------- ----
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. License Issue Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4. Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5. Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. Progress and Royalty Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8. Life of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9. Termination by The Regents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10. Termination by Licensee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11. Supply of the Biological Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12. Maintenance of the Biological Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13. Disposition of the Biological Materials, Biological Products, . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14. Use of Names and Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. Limited Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16. Patent Prosecution and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17. Patent Marking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18. Patent Infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
19. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21. Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
22. Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
23. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
24. Failure to Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
25. Governing Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
26. Government Approval or Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
27. Export Control Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
28. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
29. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
30. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
32
U.C. Case Nos. 93-289, 95-110, 95-219, 96-044, 96-160, 96-161, 96-162, and
96-191
Exclusive License Agreement
for
Fluorescent Assay Technologies
This license agreement ("Agreement") is effective this ______ day of
____________, 1996, (the Effective Date") by and between The Regents of the
University of California ("The Regents"), a California corporation, having its
statewide administrative offices at 000 Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000-0000 and Aurora Biosciences Corporation ("Licensee"), a
Delaware corporation, having a principal place of business at 00000 Xxxxx
Xxxxxx Xxxxx Xxxx, Xx Xxxxx, XX 00000.
Recitals
Whereas, certain inventions, generally characterized as fluorescent
assay technologies, including DNA encoding a green fluorescent protein and
fluorogenic substrates for Beta-lactamase ("Inventions"), useful for cell
screening, were made at the University of California, San Diego ("UCSD") by Dr.
Xxxxx Xxxxx, et al., and are claimed in Patent Rights or within the Property
Rights as defined below;
Whereas, Licensee entered into secrecy agreements ("Secrecy
Agreements") with The Regents covering UC Case Nos. *** on August 10, 1994; ***
on January 1, 1995; *** on December 8 1995; and *** on February 22, 1996 for the
purpose of evaluating the Invention;
***CONFIDENTIAL TREATMENT REQUESTED
1
33
Whereas, Licensee entered into an option agreement ("Option
Agreement") with The Regents on June 1, 1995 and ending on December 1, 1995 in
order to evaluate its commercial interest in the Invention;
Whereas, Licensee entered into a letter agreement with The Regents on
March 6, 1996 covering certain negotiated provisions that are contained in this
Agreement and a letter agreement with The Regents on April 26, 1996, with
respect to the Biological Materials ("Letter Agreements");
Whereas, the Invention was made under research funding provided in
part by the Department of Health and Human Services (DHHS) and in part by the
Xxxxxx Xxxxxx Medical Institute (HHMI), and as a consequence, this Agreement is
subject to overriding obligations to the federal government and to HHMI;
Whereas, under 35 USC Section 200-212, The Regents may elect to retain
title to any invention (including the Invention) made by it under U.S.
Government funding;
Whereas, if The Regents elects to retain title to the Invention, then
the law requires that The Regents grant to the U.S. Government a
nontransferable, paid-up, nonexclusive, irrevocable license to use the
Invention by or on behalf of the U.S. Government throughout the world;
Whereas, The Regents elected to retain title to the Invention covered
by UC Case Nos. *** on November 19, 1993; *** on February 5, 1996; ***
on October 25, 1995; and *** and *** on January 8, 1996, and granted the
required licenses to the U.S. Government;
Whereas, The Regents has acquired the right to grant this license from
the Xxxxxx Xxxxxx Medical Institute (HHMI) under the terms of the
interinstitutional agreement ("Interinstitutional Agreement"), having UC
Control No. 86-18-0017;
*** CONFIDENTIAL TREATMENT REQUESTED
2
34
Whereas, The Regents is required under the terms of Interinstitutional
Agreement to grant to the HHMI a paid-up, non-exclusive, irrevocable license to
use the Invention for its non-commercial purposes, but with no right to
sublicense;
Whereas, the Licensee is a "small entity" as defined in 37 CFR Section
1.9 and a "small-business concern" defined in 15 U.S.C. Section 632;
Whereas, it is the intent of the parties to this Agreement to create a
bailment (as provided for in Sections 2.2, 2.3 and 2.4 herein), among other
things, for the Biological Materials as defined below subject to Licensee's
rights as set forth herein;
Whereas, both parties recognize that royalties due under this
Agreement will be paid on pending patent applications and issued patents;
Whereas, Licensee requested certain rights from The Regents to
commercialize the Invention; and
Whereas, The Regents responded to the request of Licensee by granting
the following rights to Licensee so that the products and other benefits
derived from the Invention can be enjoyed by the general public.
- - oo 0 oo - -
The parties agree as follows:
1. Definitions
As used in this Agreement, the following terms will have the meaning
set forth below:
3
35
1.1 "Patent Rights" means all U.S. patents and patent applications
and foreign patents and patent applications assigned to The Regents, and in the
case of foreign patents and patent applications, those requested under Section
16.4 herein, including any reissues, extensions, substitutions, continuations,
divisions, and continuation-in-part applications (only to the extent, however,
1) that such continuation-in-part applications are covered in Section 1.1.9
below; or 2) that claims in the continuation-in-part applications are entitled
to the priority filing date of one or more of the following patent
applications listed in Sections 1.1.1 through 1.1.8 below) based on and
including any subject matter claimed in or covered by the following:
1.1.1. Pending U.S. Patent Application Serial No. ***,
entitled *** filed ***, by Dr. Xxxxx Xxxxx, et al.
and assigned to The Regents ***;
1.1.2. Pending U.S. Patent Application Serial No. *** filed
***, by Dr. Xxxxx Xxxxx, et al. and assigned to The
Regents ***;
1.1.3. Pending U.S. Patent Application Serial No. *** filed
***, by Dr. Xxxxx Xxxxx, et al. and assigned to The
Regents ***.
1.1.4. Pending PCT Application Serial No. ***, filed *** by
Dr. Xxxxx Xxxxx, et al. and assigned to The Regents
***;
1.1.5. Pending U.S. Patent Application Serial No. *** filed
***, by Dr. Xxxxx Xxxxx, et al. and assigned to The
Regents ***;
1.1.6. Any U.S. Patent Application based on subject matter
described in UC Case Number ***
*** CONFIDENTIAL TREATMENT REQUESTED
4
36
*** disclosed by Dr. Xxxxx Xxxxx, et al. and assigned
to The Regents; and
1.1.7. Any U.S. Patent Application based on subject matter
described in *** disclosed by Dr. Xxxxx Xxxxx, et al.
and assigned to The Regents; and
1.1.8. Any U.S. Patent Application based on subject matter
described in ***************************************
*********************************," disclosed by Dr.
Xxxxx Xxxxx, et al. and assigned to The Regents.
1.1.9 Any continuation-in-part applications that are filed
by *** where such continuation-in-part applications
disclosed Inventions at UCSD and name Xxxxx Xxxxx or
an employee of The Regents in Xxxxx Xxxxx'x laboratory
at UCSD as an inventor, and are based on one or more
of the patent applications described in Sections
1.1.1 through 1.1.8 immediately above.
1.2. "Biological Materials" means ***
1.3. "Biological Product" means any product containing: (a) a
plasmid, a protein structure, a cDNA clone, a promoter, a gene or a chimeric
gene, antibodies, or fragments thereof and their sequences derived from or
containing the Biological Materials; (b) any protein structure produced or
encoded by the Biological Materials; or (c) a compound (substantially similar
or identical to a compound in (a) or (b) above), produced by chemical synthesis
or by any other method which could not have been produced but for the use of
the Biological Materials. Biological Products may either be Patent Products or
Proprietary Products.
1.4. "Identified Product" means any product, compound, biological
agent, or other material not claimed by the Patent Rights and not comprising a
Biological Product,
***CONFIDENTIAL TREATMENT REQUESTED
5
37
but identified by Licensee or a sublicensee using the Biological Materials or
Biological Products.
1.5. "Patent Products" means:
1.5.1. any kit, composition of matter, material, product, or
Biological Product;
1.5.2. any kit, composition of matter, material, product, or
Biological Product to be used in a manner requiring
the performance of the Patent Method; or
1.5.3. any kit, composition of matter, material, product, or
Biological Product produced by the Patent Method;
the extent that the manufacture, use, or sale of such kit, composition of
matter, material, product, or Biological Product, in a particular country,
would be covered by or infringe, but for the license granted to Licensee
pursuant to this Agreement, an unexpired claim of a patent or pending claim of
a patent application were it issued as a claim in a patent under Patent Rights
in that country in which such patent has issued or application is pending.
1.6. "Patent Method" means any process or method covered by the
claims of a patent application or patent within Patent Rights or the use or
practice of which would constitute in a particular country, but for the license
granted to Licensee pursuant to this Agreement, an infringement of an unexpired
claim of a patent or pending claim of a patent application were it issued as a
claim in a patent within Patent Rights in that country in which the Patent
Method is used or practiced.
1.7. "Proprietary Products" means any kit, composition of matter,
material, or product containing a Biological Product, the manufacture, use, or
sale of which in a particular country is not within an unexpired, valid claim
of a patent or a pending claim of a patent application under Patent Rights in
such country.
1.8. "Products" means Patent Products, Identified Product,
Proprietary Products, and Services.
6
38
1.9. "Property Rights" means all personal proprietary rights of The
Regents covering the tangible personal property in the Biological Materials.
In no case, however, will Property Rights include Patent Rights.
1.10. "Research Reagent" means the *** . A Research Reagent may be a
Patent Product or a Proprietary Product.
1.11. "Net Sales" means the *** . Where Licensee distributes
Products to an Affiliate, a Joint Venture, or a sublicensee for end use by such
Affiliate, Joint Venture, or sublicensee, then such distribution will be
considered a sale at list price normally charged to independent third parties,
and The Regents will be entitled to collect a royalty on such sale in accordance
with Article 4. (Royalties).
1.12. "Services" means services provided by Licensee or its
sublicensees to its customers when such services require the use of the Patent
Rights or Property Rights.
1.13. "Service Revenues" means revenues paid to Licensee or its
sublicensees for Services.
***CONFIDENTIAL TREATMENT REQUESTED
7
39
1.14. "Affiliate(s)" of Licensee means any entity which, directly or
indirectly, controls Licensee, is controlled by Licensee, or is under common
control with Licensee ("control" for these purposes being defined as the
actual, present capacity to elect a majority of the directors of such
affiliate, or if not, the capacity to elect the members that control forty
percent of the outstanding stock or other voting rights entitled to elect
directors) provided, however, that in any country where the local law will not
permit foreign equity participation of a majority, then an "Affiliate" will
include any company in which Licensee will own or control, directly or
indirectly, the maximum percentage of such outstanding stock or voting rights
permitted by local law. Each reference to Licensee herein will be meant to
include its Affiliates.
1.15. "Joint Venture" means any separate entity established pursuant
to an agreement between a third party and Licensee to constitute a vehicle for
a joint venture, in which the separate entity manufactures, uses, purchases,
sells, or acquires Products from Licensee. Each reference to Licensee herein
will be meant to include its Joint Venture(s).
2. Grant
2.1. Subject to the limitations set forth in this Agreement and
subject to the license granted to the U.S. Government and to HHMI as set forth
in the Recitals above, where Patent Rights exists, The Regents hereby *** .
2.2. Subject to the limitations set forth in this Agreement and
subject to the licenses granted to the U.S. Government and to HHMI as set forth
in the Recitals above, where The Regents may lawfully grant such a license, The
Regents hereby
***CONFIDENTIAL TREATMENT REQUESTED
8
40
grants to Licensee ***.
2.3. Licensee acknowledges that title to the tangible material
comprising the Biological Materials is owned by The Regents and is not
transferred to Licensee under this Agreement, except that Licensee may transfer
title of such Biological Materials as are sold as Biological Products or
Research Reagents under the terms of this Agreement.
2.4. The licenses granted under Property Rights set forth in
Section 2.2 above expressly limit the rights granted to Licensee to those
licenses expressly stated in this Agreement and for no other purpose.
2.5. The licenses granted hereunder will be subject to the
overriding obligations to the U.S. Government including those set forth in 35
U.S.C. Section 200-212 and applicable governmental implementing regulations.
2.6. The manufacture of Products and the practice of the Patent
Method will be subject to applicable government importation laws and
regulations.
2.7. The Regents also grants to Licensee the right to issue
sublicenses under the rights granted in Sections 2.1 and 2.2 above to third
parties, provided Licensee retains current exclusive rights thereto under this
Agreement. To the extent applicable, such sublicenses will include all of the
rights of and obligations due to The Regents (and, if applicable, the United
States Government) that are contained in this Agreement including payment of
fees and royalties at the rates provided for in Section 3.2 and Article 4.
(Royalties).
2.8. Licensee will notify The Regents of each sublicense granted
hereunder and provide The Regents with a copy of each sublicense, which shall
be treated as
***CONFIDENTIAL TREATMENT REQUESTED
9
41
Proprietary Information of Licensee as defined in Article 29.
(Confidentiality). Licensee will collect and pay all such fees and royalties
due The Regents from sublicensees as set forth in Sections 3.2 and 4.1 below
(and guarantee all such payments due from sublicensees). Licensee will require
sublicensees to provide it with progress and royalty reports in accordance with
the provisions herein, and Licensee will collect and deliver to The Regents all
such reports due from sublicensees.
2.9. Upon termination of this Agreement for any reason, all
sublicenses granted by Licensee in accordance with this Agreement will remain
subject to the terms of such sublicenses in effect, and shall be assigned to
and assumed by The Regents except that sublicenses which: (i) are in a state of
breach as yet uncured by the sublicensee; or (ii) sublicenses which conflict
with state, or federal law, or the previously established written policy of The
Regents, shall not be assigned to and assumed by The Regents. The Regents will
not be bound by any duties and obligations contained in the sublicenses that
extend beyond the duties and obligations assumed by The Regents in this
Agreement and shall have no right to receive any payment from such sublicensees
except the amounts due under this Agreement for the activities of such
sublicensees.
2.10. The Regents may, at its own discretion, disclose to Licensee
certain chemical and biological materials relating to the Patent Rights and
Property Rights that are developed in Dr. Xxxxx Xxxxx'x laboratory at UCSD.
The Regents hereby grants to Licensee the right to elect to include under this
Agreement any or all of such chemicals and biological materials.
2.11. In accordance with Section 2.10, Licensee will notify The
Regents in writing within 60 days of the disclosure by The Regents of any such
further chemicals and/or biological materials which Licensee elects to be
included under this Agreement, and such chemicals and biological materials
shall be Biological Materials for all purposes of this Agreement.
10
42
2.12. Because this Agreement grants the exclusive right to use or
sell the Products in the United States, Licensee acknowledges that any
component of a Product which embodies a patented Invention or is produced
through the use thereof for sale in the United States will be manufactured
substantially in the United States to the extent required by 35 U.S.C. Section
204.
2.13. Nothing in this Agreement will be deemed to limit the right of
The Regents to publish any and all technical data resulting from any research
performed by The Regents relating to the Invention, Biological Materials,
Biological Products, and Patent Methods and to make and use the Invention,
Biological Materials, Biological Products, and Patent Methods, and associated
technology owned by The Regents solely for educational and research purposes.
3. License Issue Fee
3.1. As partial consideration for all the rights and licenses
granted to Licensee, Licensee will pay to The Regents a license issue fee of
***, payable according to the following schedule:
3.1.1. *** will be sent by Licensee to The Regents together
with two copies of this Agreement executed by
Licensee;
3.1.2. *** will be sent by Licensee to The Regents on or
before ***;
3.1.3. *** will be sent by Licensee to The Regents on or
before ***;
3.1.4. *** will be sent by Licensee to The Regents on or
before ***;
***CONFIDENTIAL TREATMENT REQUESTED
11
43
3.1.5. *** will be sent by Licensee to The Regents on or
before ***;
3.1.6. *** will be sent by Licensee to The Regents on or
before ***;
3.1.7. *** will be sent by Licensee to The Regents on or
before ***; and
3.1.8. *** will be sent by Licensee to The Regents on or
before ***.
3.2. Licensee will also pay to The Regents fees equal to *** of
Service Revenues and *** of the Service Revenues *** received by Licensee from
each third party with which it enters into a corporate alliance for screening
services using Patent Rights and Property Rights. Notwithstanding the above,
Licensee shall have no obligation to pay to The Regents any amounts it receives
from a third party for the purchase of equity, research funding, debt financing,
reimbursement of patent filing, prosecution, and/or maintenance expenses or
other expenses.
3.3. ***
4. Royalties
4.1. As further consideration for all the rights and licenses
granted to Licensee, Licensee will also pay to The Regents an earned royalty
based on Net Sales according to the following:
4.1.1. (a) A royalty rate of *** of the Net Sales paid to
Licensee and its sublicensees with respect to each
Identified Product ***
***CONFIDENTIAL TREATMENT REQUESTED
12
44
*** for each Identified Product, and a royalty rate of
*** of the Net Sales paid to Licensee and its
sublicensees of each Identified Product *** for each
such Identified Product.
(b) Notwithstanding Section 4.1.1(a) above, if
Licensee and a particular sublicensee are unable to
agree on a royalty *** of Identified Products by such
sublicensee *** and a royalty rate *** of Identified
Products for ***, then the royalty due to The Regents
*** will be equal to ***, if any, agreed to between
Licensee and such sublicensee *** of such Identified
Product by such sublicensee.
(c) In the event Licensee is unable to negotiate
with a particular sublicensee any royalty on the Net
Sales of Identified Products, then in such case
Licensee will not be entitled to take, in lieu of
royalties on Net Sales by such sublicensee of
Identified Products, consideration in any form for:
(i) equity in Licensee above fair market value; (ii)
research funding for screening to identify Identified
Products in excess of fully burdened direct and
indirect costs therefore; or (iii) reimbursement of
patent filing, prosecution, and maintenance expenses;
and
(d) For the avoidance of doubt, it is understood
and agreed that, except as provided in Section
4.1.1(a) and (b) above, The Regents shall not be
entitled to any royalty on Net Sales of Identified
Products, and if Section 4.1.1(c) applies to a
particular sublicense, the consideration received by
Licensee from such sublicensee will be in the form of
Service Revenues, and the only amounts due The
Regents under this Agreement with respect thereto
shall be the amounts set forth in Section 3.2, and
not a royalty based on the Net Sales of Identified
Products.
4.1.2. (a) A royalty rate *** by Licensee and its
sublicensees of Research Reagents and any other
Product that is not an Identified Product or Services.
Licensee will be entitled to reduce the royalty due
The Regents
***CONFIDENTIAL TREATMENT REQUESTED
13
45
on the Net Sales of such Research Reagents and other
Products if Licensee must pay a royalty to The
Regents on Patent Rights and Property Rights and a
third party with respect to intellectual property
rights in which The Regents has no ownership
interest. In such event, if the combined royalties
due The Regents and the third party(s) ***, Licensee
may reduce the royalty due The Regents ***, provided,
however, that in no event will the royalty rate due
The Regents on the Research Reagent or such Product
be ***.
(b) For the avoidance of doubt, it is understood
and agreed that Licensee shall have no obligation to
sell or have sold any Research Reagents except those
listed on Appendix E hereto.
4.2. Licensee will not be entitled to apply the royalty reduction
specified in Section 4.1.2(a) of this section to royalties due The Regents
under Section 4.1.1 of this Article 4. (Royalties) or any other provisions of
this Agreement except the provisions set forth in Section 4.1.2(a).
4.3. Sections 1.1, 1.5, and 1.6 define Patent Rights, Patent
Products, and Patent Methods so that royalties will be payable on Patent
Products and Patent Methods covered by both pending patent applications and
issued patents. Earned royalties will accrue on Patent Products on a
Product-by-Product basis in each country for the duration of Patent Rights in
that country and will be payable to The Regents when Patent Products are
invoiced, or if not invoiced, when delivered to a third party or to itself, an
Affiliate, Joint Venture, or sublicensee in the case where such delivery of the
Patent Products to Licensee, an Affiliate, Joint Venture, or sublicensee is
intended for end use. If no Patent Rights exist in a country, earned royalties
will accrue on a Proprietary Product, on a Product-by-Product basis, until the
*** CONFIDENTIAL TREATMENT REQUESTED
14
46
tenth anniversary of the first commercial sale of a particular Proprietary
Product in such country. Earned royalties will accrue on Identified Products,
on a Product-by-Product basis, until the tenth anniversary of the first
commercial sale of a particular Identified Product in such country.
4.4. Royalties accruing to The Regents will be paid to The Regents
***:
# ***
# ***
# ***
# ***
Each such payment will be for royalties which accrued ***.
4.5. Beginning ***, and in each succeeding calendar year ***,
Licensee will pay *** and thereafter for the life of this Agreement. This ***
will be paid to The Regents by *** of each year and will be credited against the
earned royalty due and owing for the calendar year in which the minimum payment
was made.
4.6. All monies due The Regents will be payable in United States
funds collectible at par in San Francisco, California. When Products are sold
for monies other than United States dollars, the earned royalties will first be
determined in the foreign currency of the country in which such Products were
sold and then converted into equivalent United States funds. The exchange rate
will be that rate quoted in the Wall Street Journal on the last business day of
the reporting period.
4.7. *** Notwithstanding the foregoing, if the Regents
*** CONFIDENTIAL TREATMENT REQUESTED
15
47
is required to pay taxes on its royalties under the laws of any country, then
Licensee will pay such amounts to the proper authorities, withhold such amounts
from royalties paid to The Regents, and provide The Regents with all documents
and assistance reasonably necessary to enable The Regents to recover all or
part of such amounts pursuant to any double taxation treaty or otherwise.
Licensee will also be responsible for all bank transfer charges.
4.8. Notwithstanding the provisions of Article 28. (Force Majeure),
if at any time legal restrictions prevent prompt remittance of part or all
royalties owed to The Regents by Licensee with respect to any country where a
Product is sold or distributed, Licensee will convert the amount owed to The
Regents into United States funds and will pay The Regents directly from another
source of funds for the amount impounded.
4.9. In the event that any patent or any claim thereof included
within the Patent Rights is held invalid or unenforceable in a final decision
by a court of competent jurisdiction and last resort and from which no appeal
has or can be taken, all obligation to pay royalties based on such patent or
claim or any claim patentably indistinct therefrom will cease as of the date of
such final decision. Licensee will not, however, be relieved from paying any
royalties that accrued before such decision or that are based on another patent
or claim that has not expired or that is not involved in such decision or that
are based on Property Rights.
4.10. No royalties will be collected or paid hereunder to The
Regents on Products sold to the account of the U.S. Government. Licensee and
its sublicensee will reduce the amount charged for Products distributed to the
United States Government by an amount equal to the royalty for such Products
otherwise due The Regents as provided herein.
4.11. ***
*** CONFIDENTIAL TREATMENT REQUESTED
16
48
************************. No royalty shall be payable under Section 4.1 above
with respect to sales of Products among Licensee and its sublicensees where such
sales are not for end use by such Licensee or its sublicensees, nor shall a
royalty be payable under this Article 4. (Royalties) with respect to Products
distributed for use in research and/or development in clinical trials, or as
promotional samples.
5. Due Diligence
5.1. Licensee, upon execution of this Agreement, will diligently
proceed to develop and provide Services, and to develop, manufacture, and sell
Research Reagents and will earnestly and diligently market the same after
execution of this Agreement and in quantities sufficient to meet the market
demands therefor.
5.2. Licensee will be entitled to exercise prudent and reasonable
business judgment in the manner in which it meets its due diligence obligations
hereunder. In no case, however, will Licensee be relieved of its obligations
to meet the due diligence provisions of this Article 5. (Due Diligence).
5.3. Licensee will obtain all necessary governmental approvals in
each country in which Licensee elects to manufacture or commercialize Research
Reagents and provide Services.
5.4. If Licensee is unable to perform any of the following:
5.4.1. ***
5.4.2. ***
5.4.3. ***
*** CONFIDENTIAL TREATMENT REQUESTED
17
49
then The Regents will have the right and option, subject to Section 5.7 below,
to terminate this Agreement or reduce the exclusive licenses granted to
Licensee to non-exclusive licenses in accordance with Section 5.6 hereof. The
exercise of this right and option by The Regents will supersede the rights
granted in Article 2 (Grant).
5.5. In addition to the provisions of Section 5.4 above, Licensee
shall also market each of the Research Reagents listed on Appendix E attached
hereto to nonprofit/academic institutions solely for their internal,
noncommercial research use either within: (i) two years following the Effective
Date of this Agreement; or (ii) six months following the publication of the
first paper describing the use of the Research Reagent, whichever is earlier.
This Section 5.5 may be satisified by Licensee or its sublicenseees.
5.6. If Licensee fails to market a particular Research Reagent in
accordance with Section 5.5 above, then The Regents will have the right and
option, subject to Section 5.7 below, to terminate all rights granted to
Licensee under this Agreement with respect to that particular Research Reagent.
This termination includes Licensee's right to use the particular Research
Reagent for its own internal use. The Regents will thereafter be free to
dispose of the particular Research Reagent as it wishes. The exercise of this
right and option by The Regents will supersede the rights granted in Article 2
(Grant).
5.7. To exercise either the right to terminate this Agreement in
whole or with respect to any portion of Patent Rights or Property Rights, or
reduce the exclusive licenses granted to Licensee to non-exclusive licenses for
lack of diligence required in this Article 5. (Due Diligence), The Regents will
give Licensee written notice of the deficiency stating its intent to terminate
this Agreement in whole or with respect to any portion of Patent Rights or
Property Rights, or to reduce the licenses to non-exclusive licenses. Licensee
thereafter shall have 60 days to cure the deficiency. If The Regents
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50
has not received written tangible evidence satisfactory to The Regents that the
deficiency has been cured by the end of the 60-day period, then The Regents
may, at its option, terminate this Agreement in whole or with respect to any
portion of Patent Rights or Property Rights, or reduce the exclusive licenses
granted to Licensee to non-exclusive licenses by giving written notice to
Licensee. These notices will be subject to Article 20. (Notices).
6. Progress and Royalty Reports
6.1. Beginning August 31, 1996, and semi-annually thereafter,
Licensee will submit to The Regents a progress report covering activities by
Licensee and its sublicensees related to the development and testing of all
their Products and the obtaining of the governmental approvals necessary for
marketing them, but Licensee will not be required to report on Products for
which a royalty is not due The Regents. These progress reports will be
provided to The Regents to cover the progress of the research and development
of the Products until the first commercial sale of Products in the United
States.
6.2. The progress reports submitted under Section 6.1 will include,
but not be limited to, the following topics so that The Regents may be able to
determine the progress of the development of Products on which a royalty is due
The Regents and may also be able to determine whether or not Licensee has met
its diligence obligations set forth in Article 5. (Due Diligence) above:
# summary of work in progress in anticipation of providing
Services and Research Reagents
# summary of work completed in anticipation of providing
Services and Research Reagents
# summary of Services completed
# current schedule of anticipated events or milestones
specified in Section 5.4 and 5.5
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# anticipated market introduction date of Products on which
a royalty is due The Regents
# sublicenses granted, if any
6.3. Licensee also will report to The Regents in its immediately
subsequent progress and royalty report the date of first commercial sale of
each Product for which a royalty is due to The Regents in each country.
6.4. After the first commercial sale of a Product on which a
royalty is due The Regents, Licensee will provide The Regents with quarterly
royalty reports to The Regents on or before each February 28, May 31, August
31, and November 30 of each year. Each such royalty report will cover the most
recently completed calendar quarter of Licensee (October through December,
January through March, April through June, and July through September) and will
show:
6.4.1. the gross sales and Net Sales of such Products sold
by Licensee and reported to Licensee as sold by its
sublicensees during the most recently completed
calendar quarter;
6.4.2. the number of such Products sold or distributed by
Licensee and reported to Licensee as sold or
distributed by its sublicensees;
6.4.3. the royalties, in U.S. dollars, payable hereunder
with respect to Net Sales; and
6.4.4. the exchange rates used, if any.
6.5. If no sales of Products for which a royalty is due to The
Regents have been made during any reporting period after the first commercial
sale of such Product, then a statement to this effect is required.
7. Books and Records
7.1. Licensee will keep books and records accurately showing all
Products manufactured, used, and/or sold with respect to which Licensee owes
royalties to The Regents under the terms of this Agreement. Such books and
records will be preserved
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for at least five years after the date of the royalty payment to which they
pertain and will be open to inspection by representatives or agents of The
Regents during normal business hours at agreed upon times to determine the
accuracy of the books and records and to determine compliance by Licensee with
the terms of this Agreement. Such independent certified public accountant
shall be bound to hold all information in confidence except as necessary to
communicate Licensee's non-compliance with this Agreement to The Regents. The
only purpose of any inspection and audit pursuant to this Paragraph 7.1 shall
be to verify Licensee's royalty statement or payment under this Agreement and
to determine Licensee's compliance with the other provisions thereunder.
7.2. The fees and expenses of representatives of The Regents
performing such an examination will be borne by The Regents. However, if an
error in royalties of *** of the total royalties due for any year is
discovered, then the fees and expenses of these representatives will be borne
by Licensee.
8. Life of the Agreement
8.1. Unless otherwise terminated by operation of law or by acts of
the parties in accordance with the terms of this Agreement, this Agreement will
be in force from the Effective Date and will remain in effect for the life of
the last-to-expire patent licensed under this Agreement, or until the last
patent application licensed under this Agreement is abandoned, or in the event
no patent issues, for a period of fifteen (15) years from market introduction
for the last to be introduced Proprietary Product in the United States.
8.2. In the event this Agreement remains in effect for the entire
term specified in Paragraph 8.1 above, and is not otherwise terminated under
the provisions of Articles 5. (Due Diligence), 9. (Termination by The Regents),
or 10. (Termination by Licensee), Licensee is hereby granted an option for
renewal of this Agreement for a period of *** from the date of its termination.
Said option for renewal shall be
*** CONFIDENTIAL TREATMENT REQUESTED
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automatically exercised provided that the Licensee has not notified The Regents
to the contrary prior to the option renewal date. The renewal licenses will be
for the same terms and conditions as set forth in this Agreement, *** .
8.3. Any termination of this Agreement will not affect the rights
and obligations set forth in the following Articles:
Article 7 Books and Records
Article 13 Disposition of Products on Hand Upon Termination
Article 14 Use of Names and Trademarks
Article 19 Indemnification
Article 22 Late Payments
Article 24 Failure to Perform
Article 29 Confidentiality
8.4. Termination of this Agreement for any reason shall not release
any party hereto from any liability which, at the time of such termination, has
already accrued to the other party or which is attributable to a period prior
to such termination, or preclude either party from pursuing any rights and
remedies it may have hereunder or at law or in equity which accrued or are
based upon any event occurring prior to such termination.
9. Termination by The Regents
9.1. If Licensee should violate or fail to perform any term or
covenant of this Agreement, then The Regents may give written notice of such
default ("Notice of Default") to Licensee. If Licensee should fail to repair
such default within 60 days after the date of such notice takes effect, The
Regents will have the right to terminate this Agreement and the licenses herein
by a second written notice ("Notice of Termination") to Licensee. If a Notice
of Termination is sent to Licensee, this Agreement will
*** CONFIDENTIAL TREATMENT REQUESTED
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automatically terminate on the date such notice takes effect. Such termination
will not relieve Licensee of its obligation to pay any royalty or license fees
owing at the time of such termination and will not impair any accrued right of
The Regents. These notices will be subject to Article 20. (Notices).
10. Termination by Licensee
10.1. Licensee will have the right at any time to terminate this
Agreement in whole or as to any portion of Patent Rights or Property Rights by
giving notice in writing to The Regents. Such Notice of Termination will be
subject to Article 20. (Notices) and termination of this Agreement in whole or
with respect to any portion of the Patent Rights or Property Rights will be
effective 60 days after the effective date thereof.
10.2. Any termination pursuant to the above paragraph will not
relieve Licensee of any obligation or liability accrued hereunder prior to such
termination or rescind anything done by Licensee or any payments made to The
Regents hereunder prior to the time such termination becomes effective, and
such termination will not affect in any manner any rights of The Regents
arising under this Agreement prior to such termination.
11. Supply of the Biological Materials
and Biological Products
11.1. The Regents will initially supply Licensee with viable samples
of the Biological Materials set forth in Appendix D within thirty (30) days of
the Effective Date or as soon as reasonably practicable, and additional
Biological Materials elected by Licensee pursuant to Section 2.11 promptly
after Licensee's notice to The Regents pursuant to such Section. To the extent
Licensee requires and requests additional samples from The Regents during the
term hereof (due to failure of the initial supply of Biological Material(s)),
and The Regents has such additional samples in its possession,
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The Regents agrees to supply such additional samples. Licensee will pay the
actual handling and shipping costs for any additional samples provided.
12. Maintenance of the Biological Materials
12.1. The Regents shall instruct Dr. Xxxxx Xxxxx that if The Regents
circulates any of the Biological Materials to third parties for noncommercial
research purposes, it shall only do so under the terms and conditions set forth
in the biological material transmission letter attached hereto as Appendix A.
The Regents expressly reserves the right to transfer the Biological Materials
to non-profit entities strictly for noncommercial research purposes in the
manner set forth above. The Regents agrees that it will not otherwise transfer
the Biological Materials. The Licensee acknowledges that The Regents' right to
so transfer the Biological Materials could lead to the inadvertent loss or
diminution of the proprietary commercial value of the Biological Materials.
13. Disposition of the Biological Materials, Biological Products,
and Products on Hand Upon Termination
13.1. Upon termination of this Agreement prior to the expiration of
its full term, the Licensee shall have the privilege of disposing all
previously made or partially made Products, but no more, for a period of one
hundred and twenty (120) days following the effective date of termination,
provided, however, that the sale of such Products shall be subject to the terms
of this Agreement including, but not limited to, the payment of royalties at
the rate and at the time provided herein and the rendering of reports in
connection therewith.
13.2. Upon termination of this Agreement for any reason, Licensee,
at its sole discretion, shall destroy or transfer to The Regents any Biological
Materials in its possession within thirty (30) days following the effective
date of termination. Licensee
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shall provide The Regents within sixty (60) days following said termination
date with written notice that the Biological Materials have been destroyed.
14. Use of Names and Trademarks
14.1. Nothing contained in this Agreement will be construed as
conferring any right to use in advertising, publicity, or other promotional
activities any name, trade name, trademark, or other designation of either
party hereto by the other (including contraction, abbreviation or simulation of
any of the foregoing). Unless required by law, the use by Licensee of the name
"The Regents of the University of California" or the name of any campus of the
University of California for use in advertising, publicity, or other
promotional activities is expressly prohibited.
14.2. It is understood that The Regents will be free to release to
the inventors, HHMI, and senior administrative officials employed by The
Regents the terms of this Agreement upon their request. If such release is
made, The Regents will request that such terms will be kept in confidence in
accordance with the provisions of Article 29. (Confidentiality) and not be
disclosed to others. It is further understood that should a third party
inquire whether a license to Patent Rights is available, The Regents may
disclose the existence of this Agreement and the extent of the grant in Article
2. (Grant) to such third party, but will not disclose the name of Licensee,
except where The Regents is required to release such information under either
the California Public Records Act or other applicable law.
15. Limited Warranty
15.1. The Regents warrants to Licensee that it has the lawful right
to grant these licenses and bailment.
15.2. This license and the associated Invention, Biological
Materials, Products, and Patent Method are provided WITHOUT WARRANTY OF
MERCHANTABILITY OR
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FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED.
THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT THE INVENTION, BIOLOGICAL
MATERIALS, PRODUCTS, OR PATENT METHOD WILL NOT INFRINGE ANY PATENT OR OTHER
PROPRIETARY RIGHT.
15.3. IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR
THE USE OF THE INVENTION, BIOLOGICAL MATERIALS, PRODUCTS, OR PATENT METHOD.
15.4. Nothing in this Agreement will be construed as:
15.4.1. a warranty or representation by The Regents as to the
validity, enforceability, or scope of any Patent
Rights or Property Rights; or
15.4.2. a warranty or representation that anything made,
used, sold, or otherwise disposed of under any
license granted in this Agreement is or will be
free from infringement of patents of third parties;
or
15.4.3. an obligation to bring or prosecute actions or suits
against third parties for patent infringement
except as provided in Article 18. (Patent
Infringement); or
15.4.4. conferring by implication, estoppel, or otherwise any
license or rights under any patents of The Regents
other than Patent Rights as defined herein,
regardless of whether such patents are dominant or
subordinate to Patent Rights; or
15.4.5. an obligation to furnish any know-how not provided in
Patent Rights and Property Rights.
16. Patent Prosecution and Maintenance
16.1. The Regents will diligently prosecute and maintain the United
States and foreign patents comprising Patent Rights using counsel of its
choice. The Regents will promptly provide Licensee with copies of all relevant
documentation so that Licensee
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may be currently and promptly informed and apprised of the continuing
prosecution, and may comment upon such documentation sufficiently in advance of
any initial deadline for filing a response, provided, however, that if Licensee
has not commented upon such documentation prior to the initial deadline for
filing a response with the relevant government patent office or The Regents
must act to preserve Patent Rights, The Regents will be free to respond
appropriately without consideration of comments by Licensee, if any. Both
parties hereto will keep this documentation in confidence in accordance with
the provisions of Article 29. (Confidentiality) herein. Counsel for The
Regents will take instructions only from The Regents.
16.2. The Regents will use all reasonable efforts to amend any
patent application to include claims requested by Licensee and required to
protect the Products contemplated to be sold or Patent Method to be practiced
under this Agreement.
16.3. The Regents and Licensee will cooperate in applying for an
extension of the term of any patent included within Patent Rights, if
appropriate, under the Drug Price Competition and Patent Term Restoration Act
of 1984. Licensee will prepare all such documents, and The Regents will
execute such documents and will take such additional action as Licensee may
reasonably request in connection therewith.
16.4. The Regents will, at the request of Licensee, file, prosecute,
and maintain patent applications and patents covered by Patent Rights in
foreign countries if available. Licensee must notify The Regents within seven
months of the filing of the corresponding United States application of its
decision to request The Regents to file foreign counterpart patent
applications. This notice concerning foreign filing must be in writing and must
identify the countries desired. The absence of such a notice from Licensee to
The
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Regents within the seven-month period will be considered an election by
Licensee not to request The Regents to secure foreign patent rights on behalf
of Licensee; provided, however, that the absence of such notice from Licensee
to The Regents within the seven-month period with respect to United States
applications filed within eight months prior to the Effective Date of this
Agreement will not be considered an election by licensee not to request The
Regents not to secure foreign patent rights. In such event, Licensee must
notify The Regents of its decision to request The Regents to file foreign
counterpart patent applications within ninety (90) days of the conventional
filing date of such applications. The Regents will have the right to file
patent applications at its own expense in any country Licensee has not included
in its list of desired countries, and such applications and resultant patents,
if any, will not be included in the licenses granted under this Agreement.
16.5. All past, present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all costs and fees relating to the preparation and filing of patents
covered by Patent Rights in Section 1.1 will be borne by Licensee. This
includes patent preparation and prosecution costs for this Invention incurred
by The Regents prior to the execution of this Agreement. Such costs will be
due upon execution of this Agreement and will be payable at the time that the
license issue fee is payable. The costs of all interferences and oppositions
will be considered prosecution expenses and also will be borne by Licensee.
Licensee will reimburse The Regents for all costs and charges within 30 days
following receipt of an itemized invoice from The Regents for same.
16.6. The obligation of Licensee to underwrite and to pay patent
preparation, filing, prosecution, maintenance, and related costs will continue
for costs incurred until three months after receipt by either party of a Notice
of Termination with respect to a particular patent application or patent within
the Patent Rights provided, however, that The Regents provides Licensee with
written notification, at least three months prior to the effective date of the
termination, that such costs are anticipated. Licensee will reimburse The
Regents for all patent costs incurred during the term of the Agreement and for
three months thereafter whether or not invoices for such costs are received
during the three-month period after receipt of a Notice of Termination.
Licensee may
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with respect to any particular patent application or patent terminate its
obligations with the patent application or patent in any or all designated
countries upon three months written notice to The Regents. The Regents may
continue prosecution and/or maintenance of such application(s) or patent(s) at
its sole discretion and expense, provided, however, that Licensee will have no
further right or licenses thereunder.
16.7. Licensee will notify The Regents of any change of its status
as a small entity (as defined by the United States Patent and Trademark Office)
and of the first sublicense granted to an entity that does not qualify as a
small entity as defined therein.
16.8. The Regents acknowledges that Licensee will be conducting
independent research and development activities with respect to the Biological
Materials, Biological Products, and/or the Patent Rights, and recognizes that
such independent research and development may result in patentable inventions
and other intellectual property owned by Licensee. The Regents hereby consents
to the filing of any patent applications, even if any Biological Materials or
Biological Products are within the scope of one or more claims of any such
patent application.
17. Patent Marking
17.1. Licensee will xxxx all Products made, used, or sold under the
terms of this Agreement, or their containers, in accordance with the applicable
patent marking laws.
18. Patent Infringement
18.1. In the event that Licensee, or The Regents' licensing
associate responsible for administering this Agreement, or Resident Counsel of
the Regents' Office of Technology Transfer learns of the substantial
infringement of any patent licensed under this Agreement, to the extent
contractually able to, it will call the attention to the other party hereto in
writing and will provide reasonable evidence of
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such infringement. Both parties to this Agreement acknowledge that during the
period and in a jurisdiction where Licensee has exclusive rights under this
Agreement, neither will notify a third party of the infringement of any of
Patent Rights without first obtaining consent of the other party, which consent
will not be unreasonably withheld. Both parties will use their best efforts in
cooperation with each other to terminate such infringement without litigation.
18.2. Licensee may request that The Regents take legal action
against the infringement of Patent Rights. Such request must be made in
writing and must include reasonable evidence of such infringement and damages
to Licensee. If the infringing activity has not been abated within 90 days
following the effective date of such request, The Regents will have the right
to elect to:
18.2.1. commence suit on its own account; or
18.2.2. refuse to participate in such suit.
18.3. The Regents will give notice of its election in writing to
Licensee by the end of the 100th day after receiving notice of such request
from Licensee. Licensee may thereafter bring suit for patent infringement if
and only if The Regents elects not to commence suit and if the infringement
occurred during the period and in a jurisdiction where Licensee had exclusive
rights under this Agreement. However, in the event Licensee elects to bring
suit in accordance with this paragraph, The Regents may thereafter join such
suit at its own expense.
18.4. Such legal action as is decided upon will be at the expense of
the party on account of whom suit is brought and all recoveries recovered
thereby will belong to such party, provided, however, that legal action brought
jointly by The Regents and Licensee and participated in by both will be at the
joint expense of the parties and all recoveries will be allocated in the
following order: ***
*** CONFIDENTIAL TREATMENT REQUESTED
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***
18.5. Each party will cooperate with the other in litigation
proceedings instituted hereunder but at the expense of the party on account of
whom suit is brought. Such litigation will be controlled by the party bringing
the suit, except that The Regents may be represented by counsel of its choice
in any suit brought by Licensee.
19. Indemnification
19.1. Licensee will (and require its sublicensees to) indemnify,
hold harmless, and defend The Regents and HHMI, their officers, employees, and
agents; the sponsors of the research that led to the Invention; the inventors
of any invention covered by patents or patent applications in Patent Rights
(including the Products and Patent Method contemplated thereunder) and their
employers against any and all claims, suits, losses, damage, costs, fees, and
expenses resulting from or arising out of exercise of this license or any
sublicense. This indemnification will include, but will not be limited to, any
product liability.
19.2. Licensee, at its sole cost and expense, will insure its
activities in connection with the work under this Agreement and obtain, keep in
force, and maintain insurance as follows: (or an equivalent program of self
insurance)
Comprehensive or Commercial Form General Liability Insurance
(contractual liability included) with limits as follows:
# Each Occurrence $1,000,000
# Products/Completed Operations Aggregate $1,000,000
*** CONFIDENTIAL TREATMENT REQUESTED
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# Personal and Advertising Injury $1,000,000
# General Aggregate (commercial form only) $1,000,000
19.3. As of and following the date of commencement of any clinical
trial with respect to a Product marketed by Licensee, Licensee shall increase
insurance coverage under Section 19.2 immediately above from $1,000,000 to an
aggregate of $3,000,000. As of and following the date of commencement of any
sales of such Products, Licensee shall increase insurance coverage under
Section 19.2 to an aggregate of $5,000,000. It should be expressly understood,
however, that the coverages and limits referred to under the above will not in
any way limit the liability of Licensee. Licensee will furnish The Regents
with certificates of insurance evidencing compliance with all requirements.
Such certificates will:
19.3.1. Provide for 30 day advance written notice to The
Regents of any modification;
19.3.2. Indicate that The Regents has been endorsed as an
additional Insured under the coverages referred
to under the above; and
19.3.3. Include a provision that the coverages will be
primary and will not participate with nor will be
excess over any valid and collectable insurance
or program of self-insurance carried or
maintained by The Regents.
19.4. The Regents will promptly notify Licensee in writing of any
claim or suit brought against The Regents in respect of which The Regents
intends to invoke the provisions of this Article 19. (Indemnification).
Licensee will keep The Regents informed on a current basis of its defense of
any claims pursuant to this Article 19. (Indemnification). It is understood
that Licensee shall have the right to control the defense and settlement of any
such claim or suit, except Licensee shall not enter into any settlement which
(i) makes any admission of wrongdoing on the part of The Regents, or (ii)
admits that any of the Patent Rights of The Regents are invalid, unenforceable,
or not infringed without prior written consent of The Regents.
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20. Notices
20.1. Any notice or payment required to be given to either party
will be deemed to have been properly given and to be effective (a) on the date
of delivery if delivered in person or (b) five days after mailing if mailed by
first-class certified mail, postage paid, to the respective addresses given
below, or to another address as it may designate by written notice given to the
other party.
In the case of Licensee: AURORA BIOSCIENCES, CORP.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
Attention: President
(000) 000-0000
In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Executive Director;
Research Administration
and Office of Technology
Transfer
Referring to: U.C. Case Nos. 93-289,
95-110, 95-219, 96-044, 96-160, 96-161,
96-162, and 96-191
21. Assignability
21.1. This Agreement is binding upon and will inure to the benefit
of The Regents, its successors and assigns, but shall be personal to Licensee
and assignable by Licensee only with the written consent of The Regents, which
consent shall not be unreasonably withheld; provided, however, Licensee may
assign this Agreement to an Affiliate or Joint Venture or in connection with
the sale or transfer of substantially all the
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assets of Licensee relating to the subject matter of this Agreement, without
written consent of The Regents.
22. Late Payments
22.1. In the event royalty payments or fees or patent prosecution
costs are not received by The Regents when due, Licensee will pay to The
Regents interest charges at a rate of ten percent (10%) simple interest per
annum. Such interest will be calculated from the date payment was due until
actually received by The Regents. Acceptance by The Regents of any late
payment interest from Licensee under this Section 22.1 will in no way affect
the provision of Article 23. (Waiver) herein.
23. Waiver
23.1. It is agreed that no waiver by either party hereto of any
breach or default of any of the covenants or agreements herein set forth will
be deemed a waiver as to any subsequent and/or similar breach or default.
24. Failure to Perform
24.1. In the event of a failure of performance due under the terms
of this Agreement and if it becomes necessary for either party to undertake
legal action against the other on account thereof, then the prevailing party
will be entitled to reasonable attorney's fees in addition to costs and
necessary disbursements.
25. Governing Laws
25.1. THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules
that would direct the application of the laws of another jurisdiction,
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66
but the scope and validity of any patent or patent application will be governed
by the applicable laws of the country of such patent or patent application.
26. Government Approval or Registration
26.1. If this Agreement or any associated transaction is required by
the law of any nation to be either approved or registered with any governmental
agency, Licensee will assume all legal obligations to do so. Licensee will
notify The Regents if it becomes aware that this Agreement is subject to a
United States or foreign government reporting or approval requirement.
Licensee will make all necessary filings and pay all costs including fees,
penalties, and all other out-of-pocket costs associated with such reporting or
approval process.
27. Export Control Laws
27.1. Licensee will observe all applicable United States and foreign
laws with respect to the transfer of Products and related technical data to
foreign countries, including, without limitation, the International Traffic in
Arms Regulations (ITAR) and the Export Administration Regulations.
28. Force Majeure
28.1. The parties to this Agreement will be excused from any
performance required hereunder if such performance is rendered impossible or
unfeasible due to any acts of God, catastrophes, or other major events beyond
their reasonable control, including, without limitation, war, riot, and
insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes,
lock-outs, or other serious labor disputes; and floods, fires, explosions, or
other natural disasters. However, any party to this Agreement will have the
right to terminate this Agreement upon 30 days' prior written notice if either
party is unable to fulfill its obligations under this Agreement due to any of
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the causes mentioned above and such inability continues for a period of one
year. Notices will be subject to Article 20. (Notices). When such events
have abated, the parties' respective obligations hereunder shall resume.
29. Confidentiality
29.1. Licensee and The Regents respectively will treat and maintain
the proprietary business, patent prosecution, software, engineering drawings,
process and technical information, and other proprietary information
("Proprietary Information") of the other party in confidence using at least the
same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until
five years after the date of termination of this Agreement. This
confidentiality obligation will apply to the information defined as "Data"
under the Secrecy Agreement, and such Data will be treated as Proprietary
Information hereunder.
29.2. All Proprietary Information will be labeled or marked
confidential or as otherwise similarly appropriate by the disclosing party, or
if the Proprietary Information is orally disclosed, it will be reduced to
writing or some other physically tangible form, marked and labeled as set forth
above by the disclosing party, and delivered to the receiving party within 30
days after the oral disclosure as a record of the disclosure and the
confidential nature thereof. Notwithstanding the foregoing, Licensee and The
Regents may use and disclose Proprietary Information to its employees, agents,
consultants, contractors, and, in the case of Licensee, its sublicensees,
provided that any such parties are bound by a like duty of confidentiality.
29.3. Nothing contained herein will in any way restrict or impair
the right of Licensee or The Regents to use, disclose, or otherwise deal with
any Proprietary Information:
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29.3.1. that recipient can demonstrate by written records was
previously known to it;
29.3.2. that is now, or becomes in the future, public
knowledge other than through acts or omissions of
recipient;
29.3.3. that is lawfully obtained without restrictions by
recipient from sources independent of the disclosing
party;
29.3.4. that is required to be disclosed to a governmental
entity or agency in connection with seeking any
governmental or regulatory approval, or pursuant
to the lawful requirement or request of a
governmental entity or agency;
29.3.5. that is furnished to a third party by the recipient
with similar confidentiality restrictions imposed
on such third party, as evidenced in writing; or
29.3.6. that The Regents is required to disclose pursuant to
the California Public Records Act or other applicable
law.
29.4. Upon termination of this Agreement, Licensee and The Regents
will destroy or return to the disclosing party proprietary information received
from the other in its possession within 15 days following the effective date of
termination. Licensee and The Regents will provide each other, within 30 days
following termination, with a written notice that Proprietary Information has
been returned or destroyed. Each party may, however, retain one copy of
Proprietary Information for archival purposes in nonworking files.
30. Miscellaneous
30.1. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
30.2. This Agreement will not be binding upon the parties until it
has been signed below on behalf of each party, in which event, it will be
effective as of the date recited on page one.
37
69
30.3. No amendment or modification hereof will be valid or binding
upon the parties unless made in writing and signed on behalf of each party.
30.4. This Agreement embodies the entire understanding of the
parties and will supersede all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof. The Letter Agreements, the Option Agreement, and the
Secrecy Agreements specified in the Recitals of this Agreement are hereby
terminated.
30.5. In case any of the provisions contained in this Agreement are
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability will not affect any other provisions hereof,
but this Agreement will be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.
The Regents and Licensee execute this Agreement in duplicate originals
by their respective, authorized officers on the date indicated.
Aurora Biosciences Corporation The Regents of the University
of California
By__________________________________ By_________________________________
(Signature) (Signature)
Name________________________________ Name Xxxxxxx X. Xxxxxxxxx
(Please Print)
Title_______________________________ Title Executive Director
Research Administration
and Office of Technology
Transfer
Date________________________________ Date_______________________________
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APPENDIX A - PAGE 1A
University of California/San Diego (UCSD)
Instructions for Standard Letter Transmitting
Biological Materials to Universities and
Non-Profit Institutions
The attached letter is authorized for use by University of California,
UCSD Principal Investigators and Administrators only with Scientists and other
universities and nonprofit research institutions when transmitting cell lines,
plasmids and the like for non-commercial research purposes.
1. Choose the appropriate form of university or nonprofit research
institution in paragraph 2.
2. Choose whether or not to include the phrase "our cooperative" in
paragraph 2.
3. Insert in paragraph 4 the amount of processing charge. If the
material is to be shipped at no charge, insert the words "no charge".
4. Send the letter in duplicate to the other scientists.
5. Do not send biological materials until you receive the duplicate copy
executed by both the scientist and the other institution.
6. Send a copy of the fully executed letter agreement to:
Xxxxxxx X. Xxxxxxxxx
Executive Director
Research Administration
and Technology Transfer
0000 Xxxxxx Xxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
7. Any changes in the wording of this standard letter must be reviewed by
the Executive Director of the Office of Technology Transfer before
acceptance.
Note: Do not use this letter for the exchange of living plants. A separate
"Testing Agreement for the Plant Varieties" is available for that purpose.
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APPENDIX A - PAGE 2A
SAMPLE LETTER FOR USE PRIOR TO TRANSMISSION OF BIOLOGICAL
MATERIALS TO INVESTIGATORS AT UNIVERSITIES OR NON-PROFIT
RESEARCH INSTITUTIONS
(date)
IN DUPLICATE
To:_____________________
This is to (acknowledge receipt of your letter) (confirm our telephone
conversation) in which you requested certain research materials developed in
this laboratory be sent to you for scientific research purposes. The materials
concerned, which belong to The Regents of the University of California/San
Diego Campus (UCSD) are _______________.
While I cannot transfer ownership of these materials to you, I will be
pleased to permit your use of these materials within your (university)
(Non-Profit Research Institution) laboratory for (our cooperative) scientific
research. However, before forwarding them to you, I require your agreement
that the materials will be received by you only for use in (our cooperative
work) (scientific research), that you will bear all risk to you or any others
resulting from your use, and that you will not pass these materials, their
progeny or derivatives, on to any other party or use them for commercial
purposes without the express written consent of The Regents of the University
of California. You understand that no other right or license to these
materials, their progeny or derivatives, is granted or implied as a result of
our transmission of these materials to you.
These materials are to be used with caution and prudence in any
experimental work, since all of their characteristics are not known.
As you recognize, there is a processing cost to us involved in
providing these materials to you. We will xxxx you for our processing costs,
which will amount to $_________________.
If you agree to accept these materials under the above conditions,
please sign the enclosed duplicate copy of this letter, then have it signed by
an authorized representative of your institution, and return it to me. Upon
receipt of that confirmation I will forward the material(s) to you.
40
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APPENDIX A - PAGE 3A
(Note: other paragraphs discussing the relevant literature, the nature of the
work, hazards relating to materials to be sent etc. may be appropriate. These
will vary depending on the individual circumstances and the relationship
between the two parties previously established. Be sure to retain a signed
copy when received and send a photocopy of the completed agreement to the
University of California Patent Administrator, Office of Technology Transfer,
Systemwide Administration, 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX
00000)
Sincerely yours,
ACCEPTED:
RESEARCH INVESTIGATOR
______________________
Printed Name
______________________
(Signature)
______________________
Date
RESEARCH UNIVERSITY OR
NON-PROFIT INSTITUTION
______________________
Printed Name
_______________________
(Signature)
_______________________
Date
41
00
XXXXXXXX X - PAGE 1B
The INVENTORS listed below understand and agree to abide by the terms
and conditions of Article 12 (MAINTENANCE OF THE BIOLOGICAL MATERIALS) of the
Exclusive License Agreement between The Regents of the University of California
and Aurora Biosciences, Corp. effective ______________________, 1996, and to
instruct all relevant personnel working within their laboratory to act
accordingly. Said paragraph reads, in part, as follows:
"12.1 The Regents shall instruct Xxxxx Xxxxx that if The Regents
circulates any of the Biological Materials to third parties for noncommercial
research purposes, it shall only do so under the terms and conditions set forth
in the biological material transmission letter attached hereto as Appendix A.
The Regents expressly reserves the right to transfer the Biological Materials
to non-profit entities strictly for noncommercial research purposes in the
manner set forth above. The Regents agrees that it will not otherwise transfer
the Biological Materials. The Licensee acknowledges that The Regents' right to
so transfer the Biological Materials could lead to the inadvertent loss or
diminution of the proprietary commercial value of the Biological Materials."
The Biological Materials is defined in said Agreement as follows:
"1.2 Biological Materials" means (i) the chemical reagents and
biological materials owned by The Regents and listed in Appendix D attached
hereto and provided to Licensee by The Regents pursuant to the April 26, 1996
Letter Agreement, and (ii) any other chemical reagents or biological materials
elected for inclusion under this Agreement by Licensee pursuant to Section 2.11
below."
By:
______________________________ _____________________________
(Inventor) Date
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APPENDIX C - PAGE 1C
CHANCELLOR APPROVAL OF COMMERCIAL RESTRICTIONS OF TANGIBLE RESEARCH PRODUCTS
In May 1989, the University of California issued the Guidelines on
University-Industry Relations ("Guidelines"). Guideline 10 entitled "Tangible
Research Products" requires that when the commercial availability of tangible
research products resulting from the conduct of research are restricted by a
license, approval must be obtained from the Chancellor of the campus where the
research took place.
The License Agreement between THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA ("The Regents") and AURORA BIOSCIENCES, CORP. ("Licensee") entitled
"Fluorescent Assay Technologies" contains provisions that restrict the transfer
of certain tangible research products to commercial competitors of the Aurora
Biosciences, Corp. and requires that tangible research products transferred for
educational and research purposes be conveyed under a biological material
transfer agreement that permits the University to retain the discretion to
publish any results of research at any time and to disseminate the tangible
materials for educational and research purposes.
Approval of the provisions of the License Agreement that restrict the
commercial availability of tangible research products is indicated below.
Approval:
______________________________ _____________________________
Xxxxxxx X. Xxxxxxx Date
Interim Chancellor
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APPENDIX E - PAGE 1E
Research Reagents
***
060596
***CONFIDENTIAL TREATMENT REQUESTED
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ADDENDUM 3A
"LIQUID HANDLING HEAD"
PRODUCT REQUIREMENT SPECIFICATIONS
I. GENERAL
A. The specifications set forth herein are preliminary and reflect the
parties' expectations as of the Effective Date of the minimum performance
requirements for the PRODUCTS. However, the parties recognize that in the
course of the Collaboration Program the specifications herein may need to be
revised in consideration of (i) engineering or manufacturing difficulties or
costs, and/or (ii) to fulfill commercial expectations of demands.
B. ***
C. ***
D. It is understood that "Best Effort..." statements imply optimization of
desirable characteristics of performance. The efforts surrounding any one
parameter may be inconsistent with, and in some cases detrimental to, the
performance of other features of the system. PACKARD will make every effort to
keep AURORA informed of these tradeoffs and negotiate improvement goals in good
faith.
II. PIEZO-DEVICE SPECIFICATIONS
A. ***
B. ***
*** CONFIDENTIAL TREATMENT REQUESTED
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***
*** CONFIDENTIAL TREATMENT REQUESTED
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ADDENDUM 3B
"DETECTOR"
PRODUCT REQUIREMENT SPECIFICATIONS
I. GENERAL
A. The specifications set forth herein are preliminary and reflect the
parties' expectations as of the Effective Date of the minimum
performance requirements for the PRODUCTS. However, the parties
recognize that in the course of the Collaboration Program the
specifications herein may need to be revised in considerations of (i)
engineering or manufacturing difficulties or costs, and/or (ii) to
fulfill commercial expectations of demands.
B. [***]
C. It is understood that "Best Effort" statements imply optimization of
desirable characteristics of performance. These efforts surrounding one
parameter may be inconsistent with, and in some cases detrimental to,
the performance of other features of the system. PACKARD will make every
effort to keep AURORA informed of such possible tradeoffs and negotiate
improvements goals in good faith.
II. CAMERA
A. [***]
B. [***]
C. [***]
D. [***]
***CONFIDENTIAL TREATMENT REQUESTED
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III. OPTICS
A. ***
B. [***]
C. [***]
D. [***]
E. [***]
F. [***]
G. [***]
IV. DETECTOR
A. [***]
B. [***]
C. [***]
D. [***]
E. [***]
***CONFIDENTIAL TREATMENT REQUESTED
6
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XXXXXXXX 0X
"XXXX-XXXXXX"
PRODUCT REQUIREMENT SPECIFICATIONS
I. GENERAL
A. The specifications set forth herein are preliminary and reflect the
parties' expectations as of the Effective Date of the minimum
performance requirements for the PRODUCTS. However, the parties
recognize that in the course of the Collaboration Program the
specifications herein may need to be revised in consideration of (i)
engineering or manufacturing difficulties or costs, and/or (ii) to
fulfill commercial expectations of demands.
B. Since the NANO-PLATE will be jointly developed by AURORA and PACKARD,
both will jointly define the final NANO-PLATE specification.
C. ***
II. REQUIREMENTS
A. ***
B. ***
C. ***
D. ***
*** CONFIDENTIAL TREATMENT REQUESTED
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ADDENDUM 4
AURORA UC REAGENTS
***
***
***
***
*** CONFIDENTIAL TREATMENT REQUESTED
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ADDENDUM 5
104
EXHIBIT 10.11
AURORA BIOSCIENCES CORPORATION
PREFERRED STOCK PURCHASE AGREEMENT
MARCH 8, 1996
105
SECTION 1 Sale of Shares....................................................1
1.2 Closing Date.......................................................1
1.3 Delivery...........................................................2
SECTION 2 Representations and Warranties of the Company.....................2
2.1 Organization and Standing..........................................2
2.2 Corporate Power....................................................3
2.3 Subsidiaries.......................................................3
2.4 Capitalization.....................................................3
2.5 Authorization......................................................4
2.6 Contracts and Other Commitments....................................5
2.7 Compliance with Other Instruments, etc.............................5
2.8 Litigation, etc....................................................5
2.9 Registration Rights................................................6
2.10 Permits...........................................................6
2.11 Governmental Consent, etc.........................................6
2.12 Disclosure........................................................6
2.13 Offering..........................................................7
2.14 Liabilities.......................................................7
2.15 Changes...........................................................7
2.16 Title to Properties and Assets; Liens, Leases, etc................9
2.17 Patents and Trademarks............................................9
2.18 Tax Returns; Taxes...............................................10
2.19 Employees........................................................10
2.20 No Defaults......................................................11
2.21 Insurance........................................................11
2.22 Brokers or Finders...............................................12
2.23 Environmental and Safety Laws....................................12
2.24 No Dividends.....................................................12
2.25 Employee Benefit Plan Obligations................................12
2.26 Qualification as a Qualified Small Business......................12
2.27 Financial Statements.............................................12
2.28 Transactions with Affiliates.....................................12
2.29 Proprietary Information and Inventions Agreements................13
2.30 U.S. Real Property Holding Corporation...........................13
SECTION 3 Investment Representations.......................................13
3.1 Power and Authority...............................................13
3.2 Due Execution.....................................................13
3.3 Experience; Accredited Investor...................................14
3.4 Investment........................................................14
3.5 Rule 144..........................................................14
3.6 No Public Market..................................................14
i.
106
3.7 Disclosure of Information.........................................14
SECTION 4 Conditions of the Purchaser's Obligations at Closing ............15
4.1 Representations and Warranties....................................15
4.2 Covenants.........................................................15
4.3 No Material Adverse Change........................................15
4.4 Securities Laws...................................................15
4.5 Compliance Certificate............................................15
4.6 Opinion of Counsel................................................15
4.7 Investors' Rights Agreement.......................................15
4.8 Proceedings and Documents.........................................15
4.9 Supporting Documents..............................................16
4.10 Management Rights Agreements.....................................16
4.11 Voting Agreement.................................................16
4.12 Amendment to Employment Agreement................................17
4.13 Charter..........................................................17
4.14 Bylaws...........................................................17
4.14 Proprietary Information Agreements...............................17
4.15 Election of Directors............................................17
4.16 Certificate as to Disqualified Persons...........................17
4.18 Fees of Purchasers' Counsel......................................17
SECTION 5 Conditions of the Company's Obligations at Closing...............18
5.1 Representations and Warranties....................................18
5.2 Covenants.........................................................18
SECTION 6 Miscellaneous....................................................18
6.1 Governing Law.....................................................18
6.2 Successors and Assigns............................................18
6.3 Entire Agreement..................................................18
6.4 Notices, etc......................................................18
6.5 Expenses..........................................................19
6.6 Counterparts......................................................19
6.7 Severability......................................................19
6.8 Survival of Agreements............................................19
6.9 Brokerage.........................................................19
6.10 Amendments.......................................................20
ii.
107
EXHIBIT
A RESTATED CERTIFICATE OF INCORPORATION
B SCHEDULE OF EXCEPTIONS
C INVESTORS' RIGHTS AGREEMENT
D FORM OF MANAGEMENT RIGHTS LETTER
E FORM OF VOTING AGREEMENT
F FORM OF PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
G FORM OF LEGAL OPINION OF COMPANY COUNSEL
iii.
108
AURORA BIOSCIENCES CORPORATION
PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of March 8, 1996 between Aurora Biosciences
Corporation, a Delaware corporation (the "COMPANY"), with its principal office
at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000, and the
purchasers listed on Schedule A hereto who execute this Agreement (each a
"Purchaser", and collectively, the "Purchasers").
WHEREAS, the Company has authorized the issuance and sale of up to
10,239,115 shares of its Series A Preferred Stock (the "SERIES A PREFERRED"),
555,555 shares of Series B Preferred Stock (the "SERIES B PREFERRED"), and
750,000 shares of Series C Preferred Stock (the "SERIES C PREFERRED")
(collectively, the "SHARES") having the rights, preferences, privileges and
restrictions set forth in the Restated Certificate of Incorporation of the
Company in the form attached to this Agreement as Exhibit A (the "RESTATED
CERTIFICATE").
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions set forth below, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties to this
Agreement agree as follows:
SECTION 1
SALE OF SHARES
1.1 SALE OF SHARES. Subject to the terms and conditions hereof, at the
Closing (as hereinafter defined), each Purchaser (severally but not jointly)
agrees to purchase from the Company, and the Company agrees to sell and issue,
shares of Preferred Stock of the Company being of the number, Series, and price
per share as set forth opposite each Purchaser's name on Schedule A hereto.
1.2 CLOSING DATE. The purchase and sale of the Shares hereunder shall take
place in up to three (3) closings, each of which shall be held at the law
offices of Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, 0000 Xxxxxxxxx Xxxxx, Xxxxx
0000, Xxx Xxxxx, Xxxxxxxxxx 00000. The first closing of such purchase and sale
hereunder, at which the shares of Series A Preferred to be purchased and sold
hereunder shall be so purchased and sold (the "FIRST CLOSING"), shall be held on
the date of this Agreement or at such other time upon which the Company and the
Purchasers participating in the First Closing shall agree. The closing of the
purchase and sale of the Series B Preferred hereunder (the "SERIES B CLOSING")
and the closing of the purchase and sale of the Series C Preferred hereunder
(the "SERIES C CLOSING") (the Series B Closing and the Series C Closing are
1
109
hereinafter collectively referred to as the "SUBSEQUENT Closings" and the First
Closing and the Subsequent Closings are hereinafter collectively referred to as
the "Closings") shall be held as soon as practicable but in each case not more
than thirty (30) days following the date hereof as agreed upon by the Company
and Purchasers purchasing at least a majority of the Shares to be purchased and
sold in such Subsequent closing.
Upon delivery of a duly executed copy of this Agreement, the Investor's
Rights Agreement (defined below) and the Voting Agreement (defined below), any
purchaser of Shares at a Subsequent Closing shall be deemed to be a party to
this Agreement, the Investors' Rights Agreement and the Voting Agreement, such
purchaser shall be deemed to be a "Purchaser" for purposes of this Agreement, a
"Stockholder" for purposes of the Investor's Rights Agreement and a "Purchaser"
for purposes of the Voting Agreement, and the Shares acquired by such purchaser
shall be deemed to have been acquired pursuant to this Agreement.
1.3 DELIVERY. At each Closing, the Company will deliver to each Purchaser
purchasing Shares in such Closing a certificate representing the Shares being
purchased upon payment of the aggregate purchase price therefor (as set forth
opposite each Purchaser's name on Schedule A hereto) by (i) check payable to the
order of the Company, (ii) wire transfer of immediately available funds made
payable to the order of the Company or (iii) cancellation of outstanding
principal and accrued interest under promissory notes issued by the Company, or
any combination of the foregoing, as provided on Schedule A.
Section 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedule of Exceptions attached
hereto as Exhibit B, the Company hereby represents and warrants to the
Purchasers as follows:
2.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Delaware and is in good standing under such laws. The Company has all requisite
corporate power to own and operate its assets and to carry on its business as
presently conducted and as proposed to be conducted. The Company is qualified to
do business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where the nature of its business requires such qualification
or where the failure to so qualify would have a Material Adverse Effect. As used
in this Agreement, "Material Adverse Effect" shall mean material adverse effect
on the Company's business as presently conducted or planned to be conducted or
the Company's financial condition, operations or prospects.
2
110
2.2 CORPORATE POWER. The Company has, and at the time of each Closing
will have, all requisite legal and corporate power to execute and deliver this
Agreement, the Investors' Rights Agreement in substantially the form attached
hereto as Exhibit C (the "INVESTORS' RIGHTS AGREEMENT"), the Management Rights
letter agreements between the Company and certain of the Purchasers
substantially in the form attached hereto as Exhibit D (the "MANAGEMENT RIGHTS
AGREEMENTS") and the Voting Agreement in substantially the form attached hereto
as Exhibit E (this Agreement, the Investors' Rights Agreement, the Management
Rights Agreements and the Voting Agreement are hereinafter collectively referred
to as the "AGREEMENTS"), to sell and issue the Shares under this Agreement, to
issue the Common Stock issuable upon conversion of the Shares and to carry out
and perform its obligations under the terms of the Agreements, including all
exhibits and schedules hereto and thereto.
2.3 SUBSIDIARIES. The Company does not own (of record or beneficially)
or control, directly or indirectly, any equity interest in any other
corporation, association or business entity (other than investments in
marketable securities). The Company is not a participant in any joint venture,
partnership or similar arrangement.
2.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, of which 2,508,500 shares will be
issued and outstanding immediately prior to the First Closing, and 25,000,000
shares of Preferred Stock, of which 10,500,000 are designated Series A Preferred
Stock, 600,000 are designated Series B Preferred Stock, and 800,000 are
designated Series C Preferred Stock, none of which will be issued and
outstanding immediately prior to the First Closing. No other shares of capital
stock or other securities of the Company are outstanding. All such issued and
outstanding shares have been duly authorized and validly issued and are fully
paid and nonassessable and have been offered, issued, sold and delivered by the
Company in compliance with applicable federal and state securities laws. The
Shares have the rights, preferences and privileges set forth in the Restated
Certificate, and all such rights, preferences and privileges are valid, binding
and enforceable in accordance with all applicable laws. The stockholders of
record and holders of subscriptions, warrants, options, convertible securities
and other rights to purchase or otherwise acquire equity securities of the
Company, and the number of shares of Common Stock and the number of such
subscriptions, warrants, options, convertible securities, and other such rights
held by each are as set forth in Exhibit B. All of the outstanding shares of
stock held by each such holder are subject to vesting as described in Exhibit B,
and the Company has the right to repurchase unvested shares upon the termination
of such holder's employment or other business relationship with the Company at
the original purchase price per share paid to the Company by such holder. The
Company has reserved 1,000,000 shares of its Common Stock (the "Reserved
Shares") for issuance pursuant to the Company's 1996 Stock Plan. Except for the
transactions contemplated in the Agreements, the conversion privileges of the
Company's
3
111
Series A, Series B and Series C Preferred Stock specified in the Restated
Certificate, and as set forth in Exhibit B, there are no options, warrants,
conversion privileges or other rights or agreements presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the
Company's capital stock or other securities of the Company and there is no
commitment by the Company to issue shares, options, warrants, convertible
securities or other rights to purchase or otherwise acquire shares of the
Company's capital stock or other securities of the Company. Except as set forth
in Section 45 of the Company's Bylaws and as contemplated by the Agreements or
as provided for in Exhibit B, to the best of the Company's knowledge, there are
no voting trusts or agreements, stockholders' agreements, pledge agreements,
buy-sell agreements, rights of first refusal, preemptive rights or proxies
relating to securities of the Company (whether or not the Company is a party
thereto). The Company has no obligation (contingent or other) to purchase,
redeem or otherwise acquire any of its equity securities.
2.5 AUTHORIZATION. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution, delivery
and performance of the Agreements by the Company, the authorization, sale,
issuance and delivery of the Shares (and the Common Stock issuable upon
conversion of the Shares) and the performance of the Company's obligations under
the Agreements has been taken or will be taken prior to the First Closing. The
Agreements, when executed and delivered by the Company, will constitute valid
and binding obligations of the Company enforceable in accordance with their
terms, subject to laws of general application relating to bankruptcy,
insolvency, the relief of debtors, general equity principles and limitations
upon rights to indemnity. This Agreement has been duly executed and delivered by
the Company. The Shares, when issued in compliance with the provisions of this
Agreement, will be duly and validly issued, fully paid and nonassessable and
will be free and clear of all liens, encumbrances or restrictions imposed by or
through the Company. The Common Stock issuable upon conversion of the Shares has
been duly and validly reserved and, when issued in compliance with the
provisions of the Restated Certificate, will be duly and validly issued, fully
paid and nonassessable and will be free and clear of all liens, encumbrances or
restrictions imposed by or through the Company. The issuance of the Shares (and
the Common Stock issuable upon conversion of the Shares) is not subject to any
preemptive rights, rights of first refusal or similar rights that have not been
waived; provided, however, that the Shares (and the Common Stock issuable upon
conversion of the Shares) are subject to a right of first refusal as set forth
in Section 45 of the Company's Bylaws, and may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein.
4
112
2.6 CONTRACTS AND OTHER COMMITMENTS. The Company does not have any
contract, agreement, lease, commitment, or proposed transaction, written or
oral, absolute or contingent, other than contracts for the purchase of supplies
and services that were entered into in the ordinary course of business and that
do not involve more than $25,000 individually or $50,000 in the aggregate. For
the purpose of this paragraph, employment and consulting contracts (including
any severance arrangements), license agreements and any other agreements
relating to the acquisition or disposition of the Company's technology (other
than pursuant to the Company's standard form of Proprietary Information and
Inventions Agreement (the "PROPRIETARY INFORMATION AGREEMENT")) shall not be
considered to be contracts entered into in the ordinary course of business. The
Company is not a party to or bound by any judgment, order, writ or decree
restricting or affecting the development, manufacture or distribution of the
Company's products or services or proposed products or services or limiting or
restricting the Company's right to compete with any person in any respect.
2.7 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Company is not, and will
not by virtue of entering into and performing the Agreements and the
transactions contemplated thereunder be, in violation (with or without the
passage of time or giving of notice or both) of any term of the Restated
Certificate or its Bylaws or any term or provision of any material mortgage,
indenture, contract, agreement, instrument, judgment or decree to which it is a
party or by which it is bound, and is not, and will not by virtue of entering
into and performing the Agreements and the transactions contemplated thereunder
be, in violation of any material order, statute, rule or regulation applicable
to the Company, other than any of the foregoing such violations that do not
impair the Company's ability to enter into or perform its obligations under the
Agreements or which, either individually or in the aggregate, do not have a
Material Adverse Effect. Entering into and performing the Agreements and the
transactions contemplated thereunder by the Company will not result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company or its properties or business.
2.8 LITIGATION, ETC. There is neither pending nor, to the Company's
knowledge and belief, threatened any action, suit, proceeding, investigation,
governmental inquiry, or claim, or any basis therefor or threat thereof, whether
or not purportedly on behalf of the Company, to which the Company is or may be
named as a party or its property is or may be subject or, to the Company's
knowledge, to which any officer, key employee, key consultant, or principal
shareholder of the Company is subject; and the Company has no knowledge (i) of
any unasserted claim, the assertion of which is likely and which, if asserted,
will seek damages, an injunction or other legal, equitable, monetary or
nonmonetary relief, which claim individually or collectively with other such
unasserted claims if granted would have a Material Adverse Effect, or (ii) that
there exists, or there is
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pending or planned, any patent, trademark, tradename, invention, device,
application or principle, or any statute, rule, law, regulation, standard or
code which would result in a Material Adverse Effect. There is no pending or, to
the Company's knowledge and belief, threatened claim or litigation against or
affecting the Company contesting, or which if adversely determined might
materially impair, its right to produce, manufacture, sell or use any product,
process, method, substance, part or other material presently produced,
manufactured, sold or used or planned to be produced, manufactured, sold or used
by the Company in connection with the operations of the Company. The Company has
no current plans to initiate any action, suit or proceeding.
2.9 REGISTRATION RIGHTS. Except as set forth in the Investors' Rights
Agreement, the Company is not under any obligation to register (as defined in
the Investors' Rights Agreement), and has not granted any rights to register,
any of its presently outstanding securities or any of its securities that may
hereafter be issued.
2.10 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 and as proposed to be conducted, the lack of which would have a
Material Adverse Effect. The Company is not in default or violation in any
material respect under any of such franchises, permits, licenses, or other
similar authority, and the execution and delivery of the Agreements will not
result in any such default or violation, with or without the passage of time or
giving of notice or both.
2.11 GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of the Agreements, or the offer, sale or issuance of the Shares (and
the Common Stock issuable upon conversion of the Shares) or the consummation of
any other transaction contemplated thereby, except the filing of the Restated
Certificate in the Office of the Secretary of State of the State of Delaware and
the qualification (or taking such action as may be necessary to secure an
exemption from qualification, if available) of the offer and sale of the Shares
(and the Common Stock issuable upon conversion of the Shares) under the
California Corporate Securities Law, which filing and qualification, if
required, will be accomplished in a timely manner prior to or promptly upon
completion of the First Closing.
2.12 DISCLOSURE. The Company has provided each Purchaser with all the
information reasonably available to it without undue expense that such Purchaser
has requested or could reasonably be expected to be material in deciding whether
to purchase the Shares. The Agreements and the Exhibits thereto as well as any
other document, certificate, schedule, financial, business or other statement
furnished to such Purchaser by or on behalf of the Company in connection with
the transactions contemplated hereby,
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including, without limitation, the Business Plan dated January 8, 1996, do not
contain any untrue statement of a material fact and do not omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading; provided, however, that with respect to any projections,
expressions of opinion, forecasts, predictions or the like (collectively,
"Projections") contained in such Business Plan, the Company represents only that
such Projections were made in good faith and that the Company believes there is
a reasonable basis therefor.
2.13 OFFERING. Subject to the accuracy of the representations set forth in
Section 3 hereof, the offer, sale and issuance of the Shares pursuant to this
Agreement and the issuance of the Common Stock to be issued upon conversion of
the Shares constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended (the "SECURITIES ACT"), and
neither the Company nor any authorized agent acting on its behalf will take any
action hereafter that would cause the loss of such exemption.
2.14 LIABILITIES. The Company has no indebtedness for borrowed money that
the Company has directly or indirectly created, incurred, assumed, or
guaranteed, or with respect to which the Company has otherwise become directly
or indirectly liable, other than obligations not in excess of $25,000
individually or in the aggregate. The Company has not assumed, guaranteed,
endorsed or otherwise become directly or contingently liable on any indebtedness
of any other person (including, without limitation, liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor, or otherwise to assure the
creditor against loss), except for guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
2.15 CHANGES. Since December 31, 1995, there has not been:
(a) any change in the assets, liabilities, financial condition, or
operating results of the Company 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,
prospects, 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;
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(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 that is not material to the business, properties, prospects, or
financial condition of the Company (as such business is presently conducted and
as it is proposed to be conducted);
(e) to the best of the Company's knowledge, 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, consultant, officer, director or shareholder;
(g) any sale, assignment, license or transfer of any patents,
trademarks, copyrights, trade secrets, Proprietary Information (as defined
herein) or other intangible assets;
(h) any resignation or termination of employment of any key officer of
the Company or termination of engagement of any key consultant of the Company;
and the Company, to the best of its knowledge, does not know of the impending
resignation or termination of employment of any such officer or termination of
engagement of any such consultant;
(i) receipt of notice that there has been a loss of, or material order
cancellation by, any major customer of the Company;
(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 any person, other than travel advances to employees and/or consultants and
other advances to employees and/or consultants made in the ordinary course of
its business;
(l) to the best of the Company's knowledge, any other event or
condition of any character that might, individually or in the aggregate,
materially and adversely affect the business, properties, prospects, or
financial condition of the Company (as such business is presently conducted and
as it is proposed to be conducted);
(m) any amount borrowed or any liability (absolute, accrued or
contingent) incurred, or to which the Company has become subject, except
liabilities not in excess of $25,000 individually or $50,000 in the aggregate
and except current liabilities incurred
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and liabilities under contracts entered into in the ordinary course of business
which have not been, individually or in the aggregate materially adverse;
(n) any transaction except in the ordinary course of business or as
otherwise contemplated hereby; or
(o) any agreement or commitment by the Company to do any of the things
described in this paragraph 2.15.
2.16 TITLE TO PROPERTIES AND ASSETS; LIENS, LEASES, ETC. The Company has
good and marketable title to its properties and assets and has good title to all
of its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances that do not in
any case materially detract from the value of the property subject thereto or
materially impair the operations of the Company and which have not arisen
otherwise than in the ordinary course of business.
Set forth on Exhibit B is a correct and complete list (including the
amount of rents called for and a description of the leased property) of all
material leases (involving more than $25,000 either individually or in the
aggregate if such leases are of a similar nature or with the same lessor) under
which the Company is a lessee. The Company enjoys peaceful and undisturbed
possession under all such leases, all of such leases are valid and subsisting
and, except as would not result in a Material Adverse Effect, the Company and,
to the Company's knowledge, each other party to such leases is not in default
thereunder.
2.17 PATENTS AND TRADEMARKS. The Company has sufficient title and
ownership of all patents, trademarks, service marks, applications for each of
the foregoing, trade names, copyrights, trade secrets, information, proprietary
rights and processes (collectively "PROPRIETARY INFORMATION"), or has, or
believes to the best of its knowledge that it has the ability to acquire on
comercially reasonable terms, valid licenses to such Proprietary Information (as
described further on Exhibit B), as necessary for its business as now conducted
and as proposed to be conducted without any conflict with or infringement of the
rights of others. The Schedule of Exceptions contains a complete list of patents
and pending patent applications of the Company or of which the Company is a
licensee. There are no outstanding options, licenses, or agreements of any kind
relating to Proprietary Information owned by the Company, 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, applications for each of the
foregoing, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity. The Company is
not aware of any impropriety with regard to the granting of any licenses of
Proprietary Information to or from the Company, and no claim is pending or, to
the Company's knowledge, threatened to the effect that any such Property
Information owned or licensed by the Company, or which the Company otherwise has
the right to use, is
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invalid or unenforceable by the Company (and to the Company's knowledge, there
is no basis for any such claim). Neither the Company nor, to the Company's
knowledge, any of its employees or consultants has received any written
communications alleging, nor does the Company know of any grounds for any claims
or allegations now or in the future, that the Company or its employees or
consultants has violated or infringed or that the Company or its employees or
consultants would, by conducting its business as proposed, violate or infringe
any of the patents, trademarks, service marks, applications for each of the
foregoing, trade names, copyrights or trade secrets or other proprietary rights
of any other person or entity. The Company is not aware that any of its
employees or consultants 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, in
the case of employees, interfere with the use of such employee's best efforts to
promote the interests of the Company or that would conflict with the Company's
business as proposed to be conducted or, in the case of consultants, which would
conflict with their obligations in serving as consultants to the Company. No
third party, including the employers or former employers of the Company's
employees and consultants, has asserted any rights or claims to the Proprietary
Information or any inventions used or proposed to be used in the Company's
business, and the Company does not believe that any such third party has a right
to assert any such rights or claims, except to the extent that such Proprietary
Information or such inventions are licensed to or from such third party. Except
pursuant to the terms of the Proprietary Information Agreements, there are no
agreements, understandings, instruments, or contracts to which the Company is a
party or by which it is bound that involve the license of any patent, copyright,
trade secret or other similar proprietary right to or from the Company.
2.18 TAX RETURNS; TAXES. The Company has accurately prepared and timely
filed all federal, state and other tax returns which are required to be filed
and has timely paid all taxes covered by such returns which have become due and
payable. The Company has not been advised that any of its returns, federal,
state or other, have been or are being audited as of the date hereof. The
Company is not delinquent in taxes or assessments and has no tax deficiency
proposed or assessed and has made no waiver of the statute of limitations
regarding assessments or collections. All taxes, if any, imposed by law in
connection with the issuance, sale and delivery of the Shares shall have been
paid, and all laws imposing such taxes shall have been fully complied with,
prior to the First Closing. Neither the Company nor any of its present or former
stockholders has ever filed an election pursuant to Section 1362 of the Internal
Revenue Code of 1986, as amended (the "Code"), that the Company be taxed as an S
corporation.
2.19 EMPLOYEES. None of the Company's employees belongs to any union or
collective bargaining unit. To the best of its knowledge, the Company has
complied in all material respects with all applicable state and federal equal
opportunity and other laws related to employment. To the best of the Company's
knowledge, no employee of or
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consultant to the Company is or will be in violation of any judgment, decree, or
order, or any term of any employment contract, patent disclosure agreement,
proprietary information and inventions agreement, or any restrictive covenant,
or any other common law obligation to a former employer, or any other contract
or agreement relating to the relationship of any such person with the Company,
or any other party, or to the use of trade secrets or proprietary information of
others, because of the nature of the business conducted or to be conducted by
the Company or the use by any such employee of his best efforts with respect to
such business or the performance by any such consultant of his obligations to
the Company. To the knowledge of the Company, no third party has claimed or has
reason to claim that any employee of or consultant to the Company has disclosed
or may be disclosing or utilized or may be utilizing any trade secret or
proprietary information or documentation of such third party, or interfered or
may be interfering in the employment relationship between such third party and
any of its present or former employees and, to the Company's knowledge, no such
person proposes to do any of such things. The Company is not a 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, other than with respect to the Company's 1996
Stock Plan, a true and correct copy of which has been provided to each
Purchaser. The Company is not aware that any officer, key employee or key
consultant, or that any group of key employees or key consultants, intends to
terminate their employment or consultancy with the Company, nor does the Company
have a present intention to terminate the employment or engagement as a
consultant of any of the foregoing. Subject to general principles related to
wrongful termination of employees, the employment of each officer and employee
of the Company is terminable at the will of the Company. The Company has
delivered to counsel for the Purchasers a copy of each consulting agreement to
which it is a party.
2.20 NO DEFAULTS. The Company has, in all material respects, performed all
material obligations required to be performed by it to date and is not in
default under any of the contracts, loans, notes, mortgages, indentures,
licenses, security agreements, agreements, leases, documents, commitments or
other arrangements to which it is a party or by which it is otherwise bound,
except for such defaults which in the aggregate would not have a Material
Adverse Effect, and no event or condition has occurred which, with the lapse of
time or the giving of notice, or both, would constitute such a default.
2.21 INSURANCE. The Company maintains adequate insurance on its properties
of a character and in such amounts and on such terms usually insured by
corporations engaged in the same or a similar business against loss or damage
resulting from fire or other risks insured against by such corporations, and
maintains in full force and effect public liability insurance against claims for
personal injury, death or property damage occurring upon, in, about or in
connection with the use of any of its properties, products
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or services and maintains such other insurance as may be required by law or
other agreement to which the Company is a party.
2.22 BROKERS OR FINDERS. The Company has not incurred, and will not incur,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with the Agreements.
2.23 ENVIRONMENTAL AND SAFETY LAWS. To the best of 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 the best
of its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.
2.24 NO DIVIDENDS. The Company has never made any declaration, setting
aside for payment or other distribution in respect of any of the Company's
capital stock or any direct or indirect redemption, repurchase or other
acquisition of any of such stock.
2.25 EMPLOYEE BENEFIT PLAN OBLIGATIONS. The Company does not maintain or
have any obligations with respect to any employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA")). The Company is not, nor was it at any time, obligated to contribute
to any employee pension benefit plan which is or was a multi-employer plan
within the meaning of Section 3(37) of ERISA.
2.26 QUALIFICATION AS A QUALIFIED SMALL BUSINESS. The Company is a
"qualified small business," as defined in Section 1202(b) of the Internal
Revenue Code (the "Code") and the Shares constitute "qualified small business
stock" as defined in Section 1202(c) of the Code. The Company covenants and
agrees to comply with the reporting and recordkeeping requirements of Section
1202 of the Code and any regulations promulgated thereunder and to execute and
deliver to the Purchasers and the Internal Revenue Service, from time to time,
such forms, documents, schedules and other instruments as may be reasonably
requested thereby to cause the Shares and the shares of Common Stock issuable
upon conversion of the Shares to qualify as a "qualified small business stock,"
as defined in Section 1202(c) of the Code.
2.27 FINANCIAL STATEMENTS. The Company has furnished to the Purchasers the
unaudited balance sheet of the Company as of January 31, 1996 and the related
unaudited statement of income for the period from the Company's inception
through January 31, 1996. All such financial statements fairly present the
financial position of the Company as of January 31, 1996, and the results of
operations during such period.
2.28 TRANSACTIONS WITH AFFILIATES. No director or officer or, to the
Company's knowledge, employee or stockholder of the Company, or, to the
Company's knowledge,
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member of the family of any such person, or, to the Company's knowledge, any
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any material transaction with the Company,
including any contract, agreement or other arrangement providing for the
employment of, furnishing of services by, rental of real or personal property
from or otherwise requiring payments to any such person or firm, other than
employment-at-will arrangements in the ordinary course of business.
2.29 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each of the
officers of the Company, each key employee and each other employee now employed
by the Company who has access to confidential information of the Company has
executed the Proprietary Information Agreement substantially in the form of
Exhibit F (collectively, the "Proprietary Information Agreements"), and such
agreements are in full force and effect. The Company is not aware that any of
such persons is in violation of any such agreement.
2.30 U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not now and
has never been a "United States real property holding corporation," as defined
in Section 897(c)(2) of the Code and Section 1.897-2(b) of the Regulations
promulgated by the Internal Revenue Service, and the Company has filed with the
Internal Revenue Service all statements, if any, with its United States income
tax returns which are required under Section 1.897-2(h) of such Regulations.
SECTION 3
INVESTMENT REPRESENTATIONS
Each Purchaser, severally and not jointly, hereby represents and warrants
to the Company as follows:
3.1 POWER AND AUTHORITY. Such Purchaser has the requisite power and
authority to enter into this Agreement, to purchase the Shares hereunder, to
convert the Shares into Common Stock, and to carry out and perform its
obligations under the terms of this Agreement.
3.2 DUE EXECUTION. This Agreement has been duly authorized, executed and
delivered by such Purchaser, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of such Purchaser,
subject to laws of general application relating to bankruptcy, insolvency, the
relief of debtors and general equity principles.
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3.3 EXPERIENCE; ACCREDITED INVESTOR. Such Purchaser has, from time to
time, evaluated investments in start-up companies and has, either individually
or through the personal experience of one or more of its current officers or
partners, experience in evaluating and investing in start-up companies. Such
Purchaser is an "accredited investor" as defined in Regulation D promulgated
under the Securities Act.
3.4 INVESTMENT. Such Purchaser is acquiring the Shares (and any Common
Stock issuable upon conversion of the Shares) for investment for its own account
and not with the view to, or for resale in connection with, any distribution
thereof. Such Purchaser understands that the Shares (and any Common Stock
issuable upon conversion of the Shares) to be purchased have not been registered
under the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein.
3.5 RULE 144. Such Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Such Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things the existence
of a public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than two years
after a party has purchased and paid for the securities to be sold, the sale
being through a "BROKER'S TRANSACTION" or in transactions directly with a
"MARKET MAKER" (as provided by Rule 144(f)) and the number of shares being sold
during any three-month period not exceeding specified limitations. Such
Purchaser is aware that the conditions for resale set forth in Rule 144 have not
been satisfied and that the Company has no plan to satisfy these conditions in
the foreseeable future.
3.6 NO PUBLIC MARKET. Such Purchaser understands that no public market now
exists for the Shares and that a public market may never exist for the Shares.
3.7 DISCLOSURE OF INFORMATION. Such Purchaser believes it has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Shares. Such Purchaser 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.
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SECTION 4
CONDITIONS OF THE PURCHASER'S OBLIGATIONS AT CLOSING
Each Purchaser's obligation to purchase the Shares at each Closing, as
applicable, is subject to the fulfillment on or prior to such Closing of the
following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 2 shall be true when made and on and as of the
date of such Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
4.2 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to such Closing shall have
been performed or complied with in all material respects.
4.3 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the Company's business or financial condition or affairs between the
date of this Agreement and the date of such Closing, if different.
4.4 SECURITIES LAWS. The Company shall have obtained all necessary permits
and qualifications, or secured exemptions therefrom, required under the
Securities Act or by any state for the offer and sale of the Shares and Common
Stock issuable upon conversion of the Shares.
4.5 COMPLIANCE CERTIFICATE. The Company shall have delivered on the date
of such Closing a certificate signed by the President and Chief Financial
Officer of the Company certifying that the conditions specified in Sections 4.1,
4.2, 4.3, 4.7, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and 4.17 have been
fulfilled.
4.6 OPINION OF COUNSEL. The Purchasers purchasing shares in such Closing
shall have received from Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, counsel for
the Company, an opinion dated as of such Closing in substantially the form
attached hereto as Exhibit G.
4.7 INVESTORS' RIGHTS AGREEMENT. The Company shall have executed and
delivered the Investors' Rights Agreement.
4.8 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at such Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchasers' counsel,
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which shall have received all such counterpart original and certified or other
copies of such documents as it may reasonably request.
4.9 SUPPORTING DOCUMENTS. The Purchasers purchasing shares in such Closing
and their counsel shall have received copies of the following documents:
(i) (A) the Certificate of Incorporation of the Company,
certified as of a recent date by the Secretary of State of the State of
Delaware and (B) a certificate of said Secretary dated as of a recent
date as to the due incorporation and good standing of the Company, the
payment of all excise taxes by the Company and listing all documents of
the Company on file with said Secretary.
(ii) a certificate of the Secretary or an Assistant Secretary
of the Company dated the date of such Closing and certifying: (A) that
attached thereto is a true and complete copy of the Bylaws of the
Company as in effect on the date of such certification; (B) that
attached thereto is a true and complete copy of all resolutions adopted
by the Board of Directors or the stockholders of the Company
authorizing the execution, delivery and performance of the Agreements,
the issuance, sale and delivery of the Shares, and the reservation,
issuance and delivery of the shares of Common Stock issuable upon
conversion of the Shares, and that all such resolutions are in full
force and effect and are all the resolutions adopted in connection with
the transactions contemplated by the Agreements; (C) that the
Certificate of Incorporation has not been amended since the date of the
last amendment referred to in the certificate delivered pursuant to
clause (i)(B) above, except for the filing of the Restated Certificate;
and (D) to the incumbency and specimen signature of each officer of the
Company executing the Agreements, the stock certificates representing
the Shares and any certificate or instrument furnished pursuant hereto,
and a certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (ii); and
(iii) such additional supporting documents and other
information with respect to the operations and affairs of the Company
as the Purchasers or their counsel reasonably may request.
4.10 MANAGEMENT RIGHTS AGREEMENTS. The Company shall have executed and
delivered the Management Rights Agreements to those Purchasers participating in
such Closing who have made a request to the Company therefor and are subject in
any manner with respect to their investment in the Company to ERISA.
4.11 VOTING AGREEMENT. The Company and the other parties thereto shall
have executed and delivered the Voting Agreement.
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4.12 AMENDMENT TO EMPLOYMENT AGREEMENT. Xxxxxxx X. Xxxx and the Company
shall have entered into an amendment (the "EMPLOYMENT AMENDMENT") to the terms
of his employment arrangements with the Company in a form satisfactory to Xx.
Xxxx, the Purchasers and their counsel, and a copy thereof shall have been
delivered to counsel for the Purchasers.
4.13 CHARTER. The Certificate of Incorporation of the Company shall read
in its entirety as set forth in Exhibit A.
4.14 BYLAWS. The Company's Bylaws shall have been amended, if necessary,
to provide that (i) any three directors shall have the right to call a meeting
of the Board of Directors and (ii) the number of directors fixed in accordance
therewith shall in no event conflict with any of the terms or provisions of the
Series A Preferred Stock. Series B Preferred Stock and Series C Preferred Stock
as set forth in the Restated Certificate.
4.15 PROPRIETARY INFORMATION AGREEMENTS. Copies of the Proprietary
Information Agreements shall have been delivered to counsel for the Purchasers.
4.16 ELECTION OF DIRECTORS. The number of directors constituting the
entire Board of Directors shall have been fixed at seven (7) and the following
persons shall have been elected as the directors and shall each hold such
position as of the First Closing: Xxxxxxx X. Xxxx and Xxxxxx Xxxxxx, as the
directors elected solely by the holders of the Common Stock, and Xxxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx X. Xxxxx and Xxxx X.
Xxxxxxxx, Xx., as the directors elected solely by the holders of the Series A
Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock.
4.17 CERTIFICATE AS TO DISQUALIFIED PERSONS. The Company shall have
executed and delivered to New Enterprise Associates VI, Limited Partnership
("NEA VI") a Certificate as to Disqualified Persons, as requested by NEA VI,
dated the Closing Date, in form and substance satisfactory to NEA VI.
4.18 FEES OF PURCHASERS' COUNSEL. The Company shall have paid in
accordance with Section 6.5 the reasonable fees and disbursements of Xxxxx,
Xxxxxxx and Xxxxxxxxx in connection with this Agreement and related transactions
as specified on a reasonably detailed invoice, detailing all time entries and
costs, submitted to counsel to the Company a reasonable time in advance of such
Closing.
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125
SECTION 5
CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING
The Company's obligation to issue and sell the Shares at each Closing
is subject to the fulfillment on or prior to such Closing of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Purchasers contained in Section 3 shall be true when made and on and as
of the date of such 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 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the date of such
Closing shall have been performed or complied with in all respects.
SECTION 6
MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California as applicable to contracts entered into and performed
entirely within the State of California by residents of California.
6.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto;
provided, however, that the rights of the Purchasers to purchase the Shares
shall not be assignable (other than to a corporation a majority of whose
outstanding voting shares are owned or controlled, directly or indirectly, by
the Purchaser) without the consent of the Company, and the Company's obligations
hereunder shall not be assignable without the consent of the Purchasers.
6.3 ENTIRE AGREEMENT. This Agreement, its Exhibits, and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
thereof.
6.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by facsimile or mailed
by registered or
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126
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser, to the address set forth on Schedule A hereto,
or at such other address as shall have been furnished to the Company in writing
by such Purchaser, or (b) if to the Company, one copy to its address set forth
above and addressed to the attention of the President, or at such other address
or addresses as the Company shall have furnished in writing to the Purchasers,
and one copy to Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 0000, Xxx Xxxxx, XX 00000, Attn: Xxxxxx X. Xxxx, Esq. All notices and
other communications pursuant to the provisions of this Section 6.4 shall be
deemed delivered when mailed or sent by facsimile or delivered by hand or
messenger. Notwithstanding the foregoing, any notice or communication to an
address outside the United States shall be sent by facsimile and confirmed in
writing contemporaneously sent by two-day guaranteed international courier.
6.5 EXPENSES. Each party to this Agreement shall bear its own expenses
and legal fees incurred by it with respect to this Agreement and all related
transactions; provided, however, that the Company shall pay the reasonable fees
and expenses of the Purchasers' special counsel, Xxxxx, Xxxxxxx and Xxxxxxxxx,
in connection with this Agreement and such transactions and any subsequent
amendment, waiver, consent or enforcement thereof.
6.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be enforceable against the party actually executing such
counterpart, and which together shall constitute one instrument.
6.7 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
6.8 SURVIVAL OF AGREEMENTS. All covenants, agreements, representations
and warranties made herein or in the other Agreements, or any certificate or
instrument delivered to the Purchasers pursuant to or in connection with the
Agreements, shall survive the execution and delivery of the Agreements, the
issuance, sale and delivery of the Shares, and the issuance and delivery of the
shares of Common Stock issuable upon conversion of the Shares, and all
statements contained in any certificate or other instrument delivered by the
Company hereunder or thereunder or in connection herewith or therewith shall be
deemed to constitute representations and warranties made by the Company.
6.9 BROKERAGE. Each party hereto will indemnify and hold harmless the
others against and in respect of any claim for brokerage or other commissions
relative to this
19
127
Agreement or to the transactions contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to have been made by
such party with any third party.
6.10 AMENDMENTS. This Agreement may not be amended or modified, and no
provisions hereof may be waived, without the written consent of the Company and
the holders of at least two-thirds of the shares of Common Stock issued or
issuable upon conversion of the Shares.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
128
The foregoing Preferred Stock Purchase Agreement is hereby executed as
of the date first above written.
THE COMPANY:
AURORA BIOSCIENCES CORPORATION
By: __________________________
Title: _______________________
THE PURCHASERS:
AVALON MEDICAL PARTNERS, L.P.
By: __________________________
Title: _______________________
AVALON BIOVENTURES II, L.P.
By: __________________________
Title: _______________________
21
129
XXXXXXXXX CAPITAL PARTNERS, X.X. XX
By: Xxxxxxxxx Associates, L.P.
By: __________________________
Title: General Partner
ABINGWORTH BIOVENTURES SICAV
By: __________________________
Title: _______________________
NEW ENTERPRISES ASSOCIATES VI, LIMITED PARTNERSHIP
By: NEA Partners VI, Limited Partnership,
its General Partner
By: __________________________
Title: General Partner
NEA VENTURES 1996, L.P.
By: __________________________
Title: Authorized Signatory
22
130
DP III ASSOCIATES, L.P.
By: One Xxxxxx Square Associates III, L.P.,
its General Partner
By: __________________________
General Partner
DOMAIN PARTNERS III, L.P.
By: One Xxxxxx Square Associates III, L.P.,
its General Partner
By: __________________________
General Partner
BIOTECHNOLOGY INVESTMENTS LIMITED
By: Old Court Limited
By: __________________________
Attorney - in - Fact
PACKARD INSTRUMENT COMPANY, INC.
By: __________________________
Title: _______________________
[SIGNATURE PAGE FOR PREFERRED STOCK PURCHASE AGREEMENT]
23
131
SEQUANA THERAPEUTICS, INC.
By: __________________________
Title: _______________________
GC&H INVESTMENTS
By: __________________________
Title: _______________________
______________________________
XXXXX X. XXXXXXXX
______________________________
XXXXX X. XXXXX
______________________________
XXXXXXX X. GLOBE
______________________________
XXXXXXX X. XXXXX
24
132
______________________________
XXXXXXX X. XXXXXXXXX
______________________________
XXXX X. XXXXX, XX.
______________________________
XXXXXX XXXXXX
______________________________
XXXXXX X. XXXXXX
______________________________
XXXXXX LUETOLF
FOR XXXXXX X.X. LANGINGER
______________________________
XXXXXXX X. XXXXX
______________________________
XXXX X. XXXXXXXX, XX.
______________________________
XXXXXX XXXXXXXX
25
133
THE XXXXXX FAMILY TRUST
By: __________________________
XXXXXX X. XXXXXX, XX., TRUSTEE
By: __________________________
XXXXXX XXXXXX, TRUSTEE
______________________________
XXXXXXX X. XXXX
XXXXXXXXX & XXXXX GROUP
By: __________________________
Xxxxxx X. Xxxxxxx
Title: _______________________
26
134
SCHEDULE A
PURCHASERS OF PREFERRED STOCK
---------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF SHARES PRICE PER METHOD OF
SHAREHOLDER INVESTMENT PURCHASED CLASS SHARE PAYMENT(1)
---------------------------------------------------------------------------------------------------------------------------------
AVALON MEDICAL PARTNERS L.P. $424,998.84 319,548 Ser A $1.33 CD
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
AVALON BIOVENTURES II L.P. 499,998.87 375,939 Ser A $1.33 CD
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX CAPITAL PARTNERS, X.X. XX 999,999.07 751,879 Ser A $1.33 C/W
0000 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
ABINGWORTH BIOVENTURES SICAV 3,499,998.74 2,631,578 Ser A $1.33 C/W
x/x Xxxxx & Xxx
Xxxxx Xxxxxxx 000
X-0000 Xxxxxxxxx
Xxxx: Xxxx Xxxxx
Fax: 000-00-00-00
with a copy to:
Xxxxxxx Xxxxxxx
Abingworth Management Ltd.
00 Xx. Xxxxx Xxxxxx
Xxxxxx XX0X0XX
Fax: 00-000-000-0000
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
135
---------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF SHARES PRICE PER METHOD OF
SHAREHOLDER INVESTMENT PURCHASED CLASS SHARE PAYMENT(1)
---------------------------------------------------------------------------------------------------------------------------------
NEW ENTERPRISE ASSOCIATES VI 2,749,999.77 2,067,669 Ser A $1.33 C/W
LIMITED PARTNERSHIP
0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXX XXXXXXXX 0000, X.X. 9,998.94 7,518 Ser A $1.33 C/W
0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
DP III ASSOCIATES, L.P. 95,301.15 71,655 Ser A $1.33 C/W
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
DOMAIN PARTNERS III., L.P. 2,754,698.66 2,071,202 Ser A $1.33 C/W
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY INVESTMENTS LIMITED 1,899,999.43 1,428,571 Ser A $1.33 C/W
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000)000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXX X. XXXXXXXX 49,998.69 37,593 Ser A $1.33 C/W
Avalon Ventures
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXX X. XXXXX 199,500.00 150,000 Ser A $1.33 C/W
0000 Xxxxxxxxxx Xxxxx
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. GLOBE 50,540.00 38,000 Ser A $1.33 C/W
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X0X0
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
136
---------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF SHARES PRICE PER METHOD OF
SHAREHOLDER INVESTMENT PURCHASED CLASS SHARE PAYMENT(1)
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. XXXXX 79,800.00 60,000 Ser A $1.33 C/W
UCSD
Cellular & Molecular Medicine Xxxx
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. XXXXXXXXX 29,999.48 22,556 Ser A $1.33 C/W
UCSD
Eukaryotic Regulatory Biology Program
Room 345 C.M.M.
0000 Xxxxxx Xxxxx
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXX X. XXXXX, XX. 4,999.47 3,759 Ser A $1.33 C/W
Argonaut Technologies, Inc.
000-X Xxxxxxxxxx Xx., Xxx. X
Xxx Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX 37,499.35 28,195 Ser A $1.33 C/W
000 Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXX 37,499.35 28,195 Ser A $1.33 C/W
000 Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXX X.X. LANGINGER 53,200.00 40,000 Ser A $1.33 C/W
x/x XXXXXX XXXXXX
XXXX Xxxxxxxxxxxxxxxxxxx XX
0000 Xxxxxx
Xxxxxxxxxxx 00
Xxxxxxxx 0000
Fax: 00-000 00 00
---------------------------------------------------------------------------------------------------------------------------------
137
---------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF SHARES PRICE PER METHOD OF
SHAREHOLDER INVESTMENT PURCHASED CLASS SHARE PAYMENT(1)
---------------------------------------------------------------------------------------------------------------------------------
GC&H INVESTMENTS 49,998.69 37,593 Ser A $1.33 C/W
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. XXXXX 24,998.68 18,796 Ser A $1.33 C/W
Xxxxxxx, Xxxxx & Xxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXX X. XXXXXXXX, XX. 4,999.47 3,759 Ser A $1.33 C/W
New Enterprise Associates
0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXXX 9,998.94 7,518 Ser A $1.33 C/W
P.O. Box 3471
16360 La Xxxxxx
Xxxxxx Xxxxx Xx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
THE XXXXXX FAMILY TRUST 24,998.68 18,796 Ser A $1.33 C/W
C/O XXXXXX X. XXXXXX, XX.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. XXXX 24,998.68 18,796 Ser A $1.33 C/W
0000 Xx Xxxxx Xxxxxxxxx, #0
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
PACKARD INSTRUMENT COMPANY, INC. 999,999.00 555,555 Ser B $1.80 C/W
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
138
---------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF SHARES PRICE PER METHOD OF
SHAREHOLDER INVESTMENT PURCHASED CLASS SHARE PAYMENT(1)
---------------------------------------------------------------------------------------------------------------------------------
SEQUANA THERAPEUTICS, INC. 1,500,000.00 750,000 Ser C $2.00 C/W
00000 Xxxxx Xxxxxx Xxxxx Xx., Xxx. 000
Xx Xxxxx, XX 00000
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX & XXXXX GROUP 499,998.60 277,777 Ser B $1.80 C/W
000 Xxxx Xxx., 00xx Xx.
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
---------------------------------------------------------------------------------------------------------------------------------
TOTALS $16,618,020.55 11,822,447
---------------------------------------------------------------------------------------------------------------------------------
1 "C/W" indicates check or wire transfer; "CD" indicates cancellation of
indebtedness.
139
EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
140
EXHIBIT B
SCHEDULE OF EXCEPTIONS
141
EXHIBIT C
INVESTORS' RIGHTS AGREEMENT
142
EXHIBIT D
FORM OF MANAGEMENT RIGHTS LETTER
143
EXHIBIT E
FORM OF VOTING AGREEMENT
144
EXHIBIT F
FORM OF PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
145
EXHIBIT G
FORM OF LEGAL OPINION OF COMPANY COUNSEL
