<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997
REGISTRATION NO. 333-37981
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COMBICHEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 8731 33-0617379
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
9050 CAMINO SANTA FE, SAN DIEGO, CALIFORNIA 92121
(619) 530-0484
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DR. VICENTE ANIDO, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
9050 CAMINO SANTA FE
SAN DIEGO, CALIFORNIA 92121
(619) 530-0484
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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<S> <C>
FAYE H. RUSSELL, ESQ. FREDERICK T. MUTO, ESQ.
THOMAS E. HORNISH, ESQ. ERIC J. LOUMEAU, ESQ.
LANCE S. KURATA, ESQ. CHRISTOPHER W. KRUEGER, ESQ.
BROBECK, PHLEGER & HARRISON LLP COOLEY GODWARD LLP
550 WEST "C" STREET, SUITE 1300 4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CALIFORNIA 92101 SAN DIEGO, CA 92121
(619) 234-1966 (619) 550-6000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value $0.001
per share................... 2,587,500 Shares $13.00 $ 33,637,500 $ 10,194
===============================================================================================================
</TABLE>
(1) Includes 337,500 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the registration
fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates,
except for the registration fee, the Nasdaq National Market filing fee and the
NASD fee.
<TABLE>
<S> <C>
Registration fee.................................................. $ 10,194
Nasdaq National Market fee........................................ 50,000
NASD fee.......................................................... 3,864
Blue Sky fees and expenses........................................ 10,000
Printing and engraving expenses................................... 180,000
Legal fees and expenses........................................... 250,000
Accounting fees and expenses...................................... 125,000
Transfer Agent and Registrar fees................................. 5,000
Miscellaneous expenses............................................ 65,942
--------
TOTAL................................................... $700,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits indemnification
of officers and directors of the Company under certain conditions and subject to
certain limitations. Section 145 of the Delaware General Corporation Law also
provides that a corporation has the power to purchase and maintain insurance on
behalf of its officers and directors against any liability asserted against such
person and incurred by him or her in such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to indemnify
him or her against such liability under the provisions of Section 145 of the
Delaware General Corporation Law.
Article VII, Section 1 of the Restated Bylaws of the Company provides that
the Company shall indemnify its directors and executive officers to the fullest
extent not prohibited by the Delaware General Corporation Law. The rights to
indemnity thereunder continue as to a person who has ceased to be a director,
officer, employee or agent and inure to the benefit of the heirs, executors and
administrators of the person. In addition, expenses incurred by a director or
executive officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding by reason of the fact that he or she is
or was a director or officer of the Company (or was serving at the Company's
request as a director or officer of another corporation) shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Company as authorized by the relevant section
of the Delaware General Corporation Law.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
Article V, Section (A) of the Company's Restated Certificate of Incorporation
provides that a director of the Company shall not be personally liable for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or acts or
omissions that involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived any improper personal benefit.
The Company has entered into indemnification agreements with each of its
directors and executive officers. Generally, the indemnification agreements
attempt to provide the maximum protection permitted by Delaware law as it may be
amended from time to time. Moreover, the indemnification agreements provide for
certain additional indemnification. Under such additional indemnification
provisions, however, an individual
II-1
<PAGE> 3
will not receive indemnification for judgments, settlements or expenses if he or
she is found liable to the Company (except to the extent the court determines he
or she is fairly and reasonably entitled to indemnity for expenses), for
settlements not approved by the Company or for settlements and expenses if the
settlement is not approved by the court. The indemnification agreements provide
for the Company to advance to the individual any and all reasonable expenses
(including legal fees and expenses) incurred in investigating or defending any
such action, suit or proceeding. In order to receive an advance of expenses, the
individual must submit to the Company copies of invoices presented to him or her
for such expenses. Also, the individual must repay such advances upon a final
judicial decision that he or she is not entitled to indemnification.
The Company has purchased directors' and officers' liability insurance. The
Company intends to enter into additional indemnification agreements with each of
its directors and executive officers to effectuate these indemnity provisions.
The Underwriting Agreement (Exhibit 1.1 hereto) contains provisions by
which the Underwriters have agreed to indemnify the Company, each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, each director of the Company, and each officer of the Company who signs
this Registration Statement, with respect to information furnished in writing by
or on behalf of the Underwriters for use in the Registration Statement.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since September 30, 1994, the Company has sold and issued the following
unregistered securities (which numbers have not been adjusted for the
one-for-four reverse stock split effected in October 1997).
(1) From September 30, 1994 to September 30, 1997, the Company issued an
aggregate of 6,694,638 options to purchase Common Stock with exercise
prices ranging from $0.062 to $0.25 per share under the Predecessor Plan
and an aggregate of 4,927,858 shares of Common Stock were issued through
the exercise of options granted under the Predecessor Plan for an aggregate
exercise price of $405,241. For additional information concerning these
transactions, reference is made to the information contained under the
caption "Management -- Benefit Plans" in the form of the Prospectus
included herein.
(2) On October 12, 1995, the Company issued 200,000 shares of Series Z
Preferred Stock to Sydney Brenner for an aggregate consideration of
$100,000.
(3) On October 18, 1994, the Company issued 500,000 shares of Common Stock to
Robert A. Curtis, former Chief Executive Officer of the Company, at $.01
per share, of which 229,160 were vested as of the date of the termination
of his employment in October 1995.
(4) On October 18, 1994, the Company issued an aggregate of 2,500 shares of
Common Stock to one investor for an aggregate consideration of $25.
(5) On November 1, 1994, the Company issued an aggregate of 400,000 shares of
Series A Preferred Stock to certain funds advised by Sequoia Capital for an
aggregate consideration of $200,000.
(6) From November 23, 1994 through January 15, 1995, the Company issued an
aggregate of 2,226,667 shares of Series B Preferred Stock to certain funds
advised by Sequoia Capital, Forward Ventures II, L.P. and an individual
investor for an aggregate consideration of $1,670,000.
(7) On November 1, 1994, the Company issued an aggregate of 100,000 shares of
Common Stock to certain venture funds advised by Sequoia Capital for an
aggregate consideration of $5,000.
(8) On November 8, 1994, the Company issued an aggregate of 175,000 shares of
Common Stock to one investor for an aggregate consideration of $8,750.
(9) On November 18, 1994, the Company issued an aggregate of 10,000 shares of
Common Stock to one investor for an aggregate consideration of $500.
II-2
<PAGE> 4
(10) In December 1994, the Company issued a warrant to purchase 83,655 shares of
Series Z Preferred Stock to Comdisco, Inc. at an exercise price of $0.50
per share in connection with an equipment lease financing.
(11) From January 1, 1995 through April 24, 1995, the Company issued an
aggregate of 130,000 shares of Common Stock to eight investors for an
aggregate consideration of $9,750.
(12) On March 20, 1995, the Company issued an aggregate of 400,000 shares of
Common Stock to The Scripps Research Institute for an aggregate
consideration of $40,000.
(13) From April 25, 1995 through July 30, 1995, the Company issued an aggregate
of 650,000 shares of Common Stock to three investors for an aggregate
consideration of $48,750.
(14) On June 15, 1995, the Company issued a warrant to purchase 35,000 shares of
Common Stock to LJL BioSystems, Inc. at an exercise price of $0.075.
(15) In connection with an asset purchase agreement dated August 4, 1995, the
Company issued an aggregate of 332,777 shares of Series Z Preferred Stock
to Molecular Simulations, Inc. from June 1996 through July 1996 in
consideration for certain technology rights.
(16) On August 5, 1995, the Company issued 6,000 shares of Common Stock to Ken
Rubenstein at $.075 per share in connection with a consulting agreement.
(17) On August 17, 1995, August 25, 1995 and September 11, 1995, the Company
issued an aggregate of 12,045,576 shares of Series C Preferred Stock to
various venture capital funds and certain other investors for an aggregate
consideration of $7,468,257.
(18) On August 17, 1995, the Company issued warrants to purchase 120,968 shares
of Series C Preferred Stock at an exercise price of $0.62 per share.
(19) On September 7, 1995, the Company issued 8,065 shares of Series C Preferred
Stock to one investor for an aggregate consideration of $5,000.
(20) In December 1995, the Company issued an aggregate of 232,500 shares of
Series J Preferred Stock to three employees upon the exercise of options to
purchase Series J Preferred Stock at an exercise price of $0.10.
(21) On April 9, 1996, the Company issued an aggregate of 5,104,845 shares of
Series C Preferred Stock to various venture capital funds and certain other
investors for an aggregate consideration of $3,165,003.
(22) In April 1996 and June 1996, the Company issued warrants to purchase an
aggregate of 240,321 shares of Series C Preferred Stock to Comdisco, Inc.
at an exercise price of $0.62 per share in connection with an equipment
lease financing.
(23) In May 1996, the Company issued warrants to purchase an aggregate of
112,903 shares of Series Z Preferred Stock to Silicon Valley Bank and
MMC/GATX Partnership No. 1 at an exercise price of $0.62 per share in
connection with an equipment lease financing.
(24) On November 15, 1996, the Company issued an aggregate of 9,869,205 shares
of Series D Preferred Stock to various venture capital funds and certain
other investors for an aggregate consideration of $9,869,205.
(25) On January 23, 1997, the Company issued an aggregate of 5,000 shares of
Common Stock to one investor at $0.10 per share pursuant to a Restricted
Stock Issuance Agreement for an aggregate consideration of $500.
(26) On June 11, 1997, the Company issued an aggregate of 40,000 shares of
Common Stock to one investor at $0.10 per share for an aggregate
consideration of $4,000.
(27) On July 1, 1997, the Company issued an aggregate of 45,000 shares of Common
Stock to the University of Pittsburgh for technology rights valued at
$11,250.
II-3
<PAGE> 5
(28) On October 7, 1997, the Company issued an aggregate of 50,000 shares of
Common Stock to two investors for past services rendered to the Company.
(29) On October 10, 1997, the Company issued an aggregate of 1,000,000 shares of
Common Stock to ImClone Systems Incorporated in conjunction with a
collaboration agreement.
(30) On October 15, 1997, the Company issued an aggregate of 4,000,000 shares of
Common Stock to Elan International Services Ltd., in conjunction with a
collaboration agreement.
The sales and issuances of securities in the above transactions were deemed
to be exempt under the Act by virtue of Section 4(2) thereof and/or Regulation D
and Rule 701 promulgated thereunder as transactions not involving any public
offering. The purchasers in each case represented their intention to acquire the
securities for investment only and not with a view to the distribution thereof.
Appropriate legends were affixed to the stock certificates issued in such
transactions. Similar representations of investment intent were obtained and
similar legends imposed in connection with any subsequent transfers of any such
securities. The Company believes that all recipients had adequate access,
through employment or other relationships, to information about the Company to
make an informed investment decision.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- --------------------------------------------------------------------------------
<C> <S>
1.1+ Form of Underwriting Agreement.
3.1++ Certificate of Incorporation of the Company, as amended.
3.2++ Form of Amended and Restated Certificate of Incorporation of the Company to
become effective immediately prior to the Offering.
3.3++ Bylaws of the Company, as amended.
3.4++ Form of Restated Bylaws of the Company to be effective upon completion of the
Offering.
4.1+ Form of Certificate for Common Stock.
5.1++ Opinion of Brobeck, Phleger & Harrison LLP with respect to the Common Stock
being registered.
10.1++ Preferred Stock Purchase Agreement for Series A Preferred Stock between the
Company and Forward Ventures II, L.P., dated August 26, 1994.
10.2++ Preferred Stock Purchase Agreement for Shares of Series Z Preferred Stock
between the Company and Sydney Brenner, dated October 14, 1994.
10.3++ Stock Purchase Agreement for Shares of Series A Preferred Stock and Common Stock
between the Company and the investors listed on Exhibit A thereto, dated
November 1, 1994.
10.4++ Stock Purchase Agreement Series B Preferred Stock between the Company and the
purchasers listed on Exhibit A thereto, dated November 29, 1994.
10.5++ Series C Preferred Stock Purchase Agreement between the Company and the
purchasers listed on Schedule A thereto, dated August 17, 1995.
10.6++ Stock Purchase Agreement for Series C Preferred Stock between the Company and
Todd Schmidt dated September 7, 1995.
10.7*++ Supplemental Purchase Agreement between the Company and the purchasers on
Schedule A thereto, dated April 8, 1996.
10.8*++ Series D Preferred Stock Purchase Agreement between the Company and the
purchasers listed on Schedule A thereto, dated November 15, 1996.
10.9++ Amended and Restated Investors' Rights Agreement between the Company and the
stockholders listed on Schedule A thereto, dated November 15, 1996.
10.10++ Series J Preferred Stock Purchase Agreement between the Company and Steve Teig,
dated June 10, 1997. '
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- --------------------------------------------------------------------------------
<C> <S>
10.11++ Series J Preferred Stock Purchase Agreement between the Company and Jonathan
Greene, dated June 11, 1997.
10.12++ Series J Preferred Stock Purchase Agreement between the Company and Andrew
Smellie, dated June 11, 1997.
10.13++ Warrant Agreement to Purchase Shares of the Series Z Preferred Stock, as amended
between the Company and Comdisco, Inc., dated December 20, 1994.
10.14++ Common Stock Purchase Warrant between the Company and LJL BioSystems, Inc.,
dated June 15, 1995.
10.15++ Form of Warrant to Purchase Shares of Series C Preferred Stock between the
Company and the purchasers listed on Schedule A thereto, dated August 17, 1995.
10.16++ Form of Warrant Agreement to Purchase Shares of Series C Preferred Stock of the
Company, between the Company and Comdisco, Inc. in the amounts listed on
Schedule A thereto.
10.17++ Form of Warrant to Purchase Shares of Series Z Preferred Stock between the
Company and the purchasers listed on Schedule A thereto, dated May 20, 1996.
10.18++ Master Lease Agreement with the Company and Comdisco Inc., dated November 6,
1994, Schedule VL-1, dated November 11, 1994, Schedule VL-2 dated April 15, 1996
and Schedule VL-3 dated April 15, 1996.
10.19*++ Collaboration Agreement between the Company and Teijin Limited, dated March 29,
1996, as amended.
10.20*++ Collaborative Research and License Agreement between the Company and Roche
Bioscience, dated October 25, 1996.
10.21*++ Research and Technology Development Agreement between the Company and Sumitomo
Pharmaceuticals Co., Ltd., dated August 18, 1997.
10.22* Collaborative Research and License Agreement between the Company and ImClone
Systems Incorporated, dated October 10, 1997.
10.23* Collaborative Research and License Agreement between the Company and Athena
Neurosciences, Inc., dated October 15, 1997.
10.24++ Full Recourse Secured Promissory Note and Stock Pledge Agreement between the
Company and Peter Myers, dated September 5, 1995.
10.25++ Promissory Note Secured by Deed of Trust between the Company and John Saunders,
dated August 30, 1996.
10.26++ Promissory Note between the Company and Vicente Anido, Jr., dated February 24,
1997.
10.27++ Pledge Agreement between the Company and Vicente Anido, Jr., dated February 24,
1997.
10.28++ Promissory Note Secured by Stock Pledge Agreement between the Company and
Vicente Anido, Jr., dated June 6, 1997
10.29++ Stock Pledge Agreement between the Company and Vicente Anido, Jr., dated June 6,
1997.
10.30++ Employment Agreement with Peter Myers, dated March 1, 1995.
10.31++ Employment Agreement with John Saunders, dated January 1, 1996.
10.32++ Employment Agreement with Steven Teig, dated July 1, 1995.
10.33++ Employment Agreement with Vicente Anido, Jr., dated March 14, 1996.
10.34++ Employment Agreement with Lee R. McCracken, dated May 13, 1996.
10.35++ Employment Letter with Karin Eastham, dated March 14, 1997.
10.36++ Standard Industrial/Commercial Single-Tenant Lease between the Company and
Campson corporation, dated December 22, 1995.
10.37++ Standard Office Lease-Full Service between the Company and Nearon Enterprises,
LLC, dated October 24, 1996.
</TABLE>
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<TABLE>
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EXHIBIT
NUMBER DESCRIPTION
- -------- --------------------------------------------------------------------------------
<C> <S>
10.38++ Lease Agreement between Harbor Investment Partners and the Company, dated
October 6, 1997.
10.39++ 1995 Stock Option/Stock Issuance Plan.
10.40++ 1995 Stock Option/Stock Issuance Plan Form of Notice of Grant.
10.41++ 1995 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.42++ 1995 Stock Option/Stock Issuance Plan Form of Stock Purchase Agreement.
10.43++ 1995 Stock Option/Stock Issuance Plan Form of Restricted Stock Issuance
Agreement.
10.44++ 1997 Stock Incentive Plan.
10.45++ 1997 Employee Stock Purchase Plan.
10.46++ Form of Indemnification Agreement between the Company and each of its directors.
10.47++ Form of Indemnification Agreement between the Company and each of its officers.
11.1++ Statement of Computation of pro forma net loss per share.
23.1++ Consent of Brobeck, Phleger & Harrison LLP (contained in their opinion filed as
Exhibit 5.1).
23.2++ Consent of Ernst & Young LLP, Independent Auditors.
24.1++ Power of Attorney (see page II-8).
27.1++ Financial Data Schedule.
</TABLE>
- ---------------
+ To be filed by amendment.
++ Previously filed with the Commission.
* Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark pursuant to
the Company's Application Requesting Confidential Treatment under Rule 406
under the Securities Act.
(b) Financial Statement Schedules included separately in the Registration
Statement.
All other schedules are omitted because they are not required, are not
applicable or the information is included in the Financial Statements or Notes
thereto.
ITEM 17. UNDERTAKINGS.
The undersigned hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described in Item 14, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 8
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment No. 1 to this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, County of San Diego, State of California, on the 24th day of October,
1997.
COMBICHEM, INC.
By: /s/ VICENTE ANIDO, JR.
------------------------------------
Vicente Anido, Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ----------------------------------- -------------------
<S> <C> <C>
/s/ VICENTE ANIDO, JR. President, Chief Executive Officer October 24, 1997
- ----------------------------------- and Director (Principal Executive
(Vicente Anido, Jr.) Officer)
Vice President of October 24, 1997
Finance and Administration and
Chief
/s/ KARIN EASTHAM Financial Officer (Principal
- ----------------------------------- Financial
(Karin Eastham) and Accounting Officer)
* Chairman of the Board and Director October 24, 1997
- -----------------------------------
(Pierre Lamond)
* Director October 24, 1997
- -----------------------------------
(Peter L. Myers)
* Director October 24, 1997
- -----------------------------------
(Philippe O. Chambon)
* Director October 24, 1997
- -----------------------------------
(Arthur Reidel)
* Director October 24, 1997
- -----------------------------------
(William Scott)
</TABLE>
By: /s/ VICENTE ANIDO, JR.
----------------------------------
Vicente Anido, Jr.,
Attorney-in-fact
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<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- -------------------------------------------------------------------- ------------
<C> <S> <C>
1.1+ Form of Underwriting Agreement.
3.1++ Certificate of Incorporation of the Company, as amended.
3.2++ Form of Amended and Restated Certificate of Incorporation of the
Company to become effective immediately prior to the Offering.
3.3++ Bylaws of the Company, as amended.
3.4++ Form of Restated Bylaws of the Company to be effective upon
completion of the Offering.
4.1+ Form of Certificate for Common Stock.
5.1++ Opinion of Brobeck, Phleger & Harrison LLP with respect to the
Common Stock being registered.
10.1++ Preferred Stock Purchase Agreement for Series A Preferred Stock
between the Company and Forward Ventures II, L.P., dated August 26,
1994.
10.2++ Preferred Stock Purchase Agreement for Shares of Series Z Preferred
Stock between the Company and Sydney Brenner, dated October 14,
1994.
10.3++ Stock Purchase Agreement for Shares of Series A Preferred Stock and
Common Stock between the Company and the investors listed on Exhibit
A thereto, dated November 1, 1994.
10.4++ Stock Purchase Agreement Series B Preferred Stock between the
Company and the purchasers listed on Exhibit A thereto, dated
November 29, 1994.
10.5++ Series C Preferred Stock Purchase Agreement between the Company and
the purchasers listed on Schedule A thereto, dated August 17, 1995.
10.6++ Stock Purchase Agreement for Series C Preferred Stock between the
Company and Todd Schmidt dated September 7, 1995.
10.7*++ Supplemental Purchase Agreement between the Company and the
purchasers on Schedule A thereto, dated April 8, 1996.
10.8*++ Series D Preferred Stock Purchase Agreement between the Company and
the purchasers listed on Schedule A thereto, dated November 15,
1996.
10.9++ Amended and Restated Investors' Rights Agreement between the Company
and the stockholders listed on Schedule A thereto, dated November
15, 1996.
10.10++ Series J Preferred Stock Purchase Agreement between the Company and
Steve Teig, dated June 10, 1997.
10.11++ Series J Preferred Stock Purchase Agreement between the Company and
Jonathan Greene, dated June 11, 1997.
10.12++ Series J Preferred Stock Purchase Agreement between the Company and
Andrew Smellie, dated June 11, 1997.
10.13++ Warrant Agreement to Purchase Shares of the Series Z Preferred
Stock, as amended between the Company and Comdisco, Inc., dated
December 20, 1994.
10.14++ Common Stock Purchase Warrant between the Company and LJL
BioSystems, Inc., dated June 15, 1995.
10.15++ Form of Warrant to Purchase Shares of Series C Preferred Stock
between the Company and the purchasers listed on Schedule A thereto,
dated August 17, 1995.
10.16++ Form of Warrant Agreement to Purchase Shares of Series C Preferred
Stock of the Company, between the Company and Comdisco, Inc. in the
amounts listed on Schedule A thereto.
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- -------------------------------------------------------------------- ------------
<C> <S> <C>
10.17++ Form of Warrant to Purchase Shares of Series Z Preferred Stock
between the Company and the purchasers listed on Schedule A thereto,
dated May 20, 1996.
10.18++ Master Lease Agreement with the Company and Comdisco Inc., dated
November 6, 1994, Schedule VL-1, dated November 11, 1994, Schedule
VL-2 dated April 15, 1996 and Schedule VL-3 dated April 15, 1996.
10.19*++ Collaboration Agreement between the Company and Teijin Limited,
dated March 29, 1996, as amended.
10.20*++ Collaborative Research and License Agreement between the Company and
Roche Bioscience, dated October 25, 1996.
10.21*++ Research and Technology Development Agreement between the Company
and Sumitomo Pharmaceuticals Co., Ltd., dated August 18, 1997.
10.22* Collaborative Research and License Agreement between the Company and
ImClone Systems Incorporated, dated October 10, 1997.
10.23* Collaborative Research and License Agreement between the Company and
Athena Neurosciences, Inc., dated October 15, 1997.
10.24++ Full Recourse Secured Promissory Note and Stock Pledge Agreement
between the Company and Peter Myers, dated September 5, 1995.
10.25++ Promissory Note Secured by Deed of Trust between the Company and
John Saunders, dated August 30, 1996.
10.26++ Promissory Note between the Company and Vicente Anido, Jr., dated
February 24, 1997.
10.27++ Pledge Agreement between the Company and Vicente Anido, Jr., dated
February 24, 1997.
10.28++ Promissory Note Secured by Stock Pledge Agreement between the
Company and Vicente Anido, Jr., dated June 6, 1997
10.29++ Stock Pledge Agreement between the Company and Vicente Anido, Jr.,
dated June 6, 1997.
10.30++ Employment Agreement with Peter Myers, dated March 1, 1995.
10.31++ Employment Agreement with John Saunders, dated January 1, 1996.
10.32++ Employment Agreement with Steven Teig, dated July 1, 1995.
10.33++ Employment Agreement with Vicente Anido, Jr., dated March 14, 1996.
10.34++ Employment Agreement with Lee R. McCracken, dated May 13, 1996.
10.35++ Employment Letter with Karin Eastham, dated March 14, 1997.
10.36++ Standard Industrial/Commercial Single-Tenant Lease between the
Company and Campson corporation, dated December 22, 1995.
10.37++ Standard Office Lease-Full Service between the Company and Nearon
Enterprises, LLC, dated October 24, 1996.
10.38++ Lease Agreement between Harbor Investment Partners and the Company,
dated October 6, 1997.
10.39++ 1995 Stock Option/Stock Issuance Plan.
10.40++ 1995 Stock Option/Stock Issuance Plan Form of Notice of Grant.
10.41++ 1995 Stock Option/Stock Issuance Plan Form of Stock Option
Agreement.
10.42++ 1995 Stock Option/Stock Issuance Plan Form of Stock Purchase
Agreement.
10.43++ 1995 Stock Option/Stock Issuance Plan Form of Restricted Stock
Issuance Agreement.
10.44++ 1997 Stock Incentive Plan.
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- -------------------------------------------------------------------- ------------
<C> <S> <C>
10.45++ 1997 Employee Stock Purchase Plan.
10.46++ Form of Indemnification Agreement between the Company and each of
its directors.
10.47++ Form of Indemnification Agreement between the Company and each of
its officers.
11.1++ Statement of Computation of pro forma net loss per share.
23.1++ Consent of Brobeck, Phleger & Harrison LLP (contained in their
opinion filed as Exhibit 5.1).
23.2++ Consent of Ernst & Young LLP, Independent Auditors.
24.1++ Power of Attorney (see page II-8).
27.1++ Financial Data Schedule.
</TABLE>
- ---------------
+ To be filed by amendment.
++ Previously filed with the Commission.
* Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark pursuant to
the Company's Application Requesting Confidential Treatment under Rule 406
under the Securities Act.
<PAGE> 1
EXHIBIT 10.22
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
IMCLONE SYSTEMS INCORPORATED
OCTOBER 10, 1997
<PAGE> 2
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the
"Agreement") is entered into and made effective as of October 10, 1997 (the
"Effective Date"), by and between COMBICHEM, INC., a Delaware corporation having
its principal offices at 9050 Camino Santa Fe, San Diego, California
("CombiChem"), and IMCLONE SYSTEMS INCORPORATED, a Delaware corporation having
its principal offices located at 180 Varick Street, 7th Floor, New York, New
York ("ImClone").
WHEREAS, CombiChem has developed and owns certain drug discovery
technology and intellectual property rights, including but not necessarily
limited to chemical library design software, multi-parallel synthesis and
purification methods, chemical libraries suitable for biological screening
assays and medicinal chemistry (collectively, "CombiChem Technology");
WHEREAS, ImClone desires to utilize CombiChem Technology for its
drug discovery activities under ImClone know-how concerning the identification
and characterization of novel small molecule inhibitors for development as
therapeutics for treatment of human disease in the area of oncology;
WHEREAS, the parties wish to collaborate in a Research Program
against Collaboration Target(s) ("Collaboration");
WHEREAS, for purposes of the Collaboration, the Parties intend to
focus on up to *** related to ImClone's Areas of Interest;
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 "Abandoned Compound" shall have the meaning set forth in Section
3.1.
1.2 "Abandoned Target" shall have the meaning set forth in Section
3.1.
1.3 "Active Compound(s)" means a compound (or compounds) which
(a) (i) is selected by *** under the Research
Program from Collaboration Compounds, or
(ii) is derived from a Collaboration Compound; and
(b) shows In Vitro Activity.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
2
<PAGE> 3
1.4 "Additional Target(s)" means a Target that is added to the
Collaboration in accordance with Section 4.2.
1.5 "Affiliate" of a Party means any corporation or other business
entity controlled by, controlling or under common control with, such Party. For
this purpose "control" shall mean direct or indirect beneficial ownership of
more than fifty percent (50%) of the voting securities or income interest in
such corporation or other business, or if not meeting the preceding
requirements, any company owned or controlled by or owning or controlling such
Party at the maximum control or ownership right permitted in the country where
such company exists.
1.6 "Areas of Interest" shall include ***
*** .
1.7 "Collaboration" has the meaning set forth in the preamble.
1.8 "Collaboration Compound(s)" means a compound (or compounds)
which (a) is synthesized following the Effective Date for screening against a
Collaboration Target under the Research Program, (b) is a pre-existing CombiChem
Compound which CombiChem desires to designate as a Collaboration Compound, or
(iii) is a pre-existing ImClone Compound which ImClone desires to designate as a
Collaboration Compound.
1.9 "Collaboration Target(s)" means either an Initial Target or an
Additional Target.
1.10 "CombiChem Compound" means a chemical compound that is
proprietary to CombiChem, or whose use or manufacture is proprietary to
CombiChem.
1.11 "CombiChem Technology" has the meaning set forth in the
preamble.
1.12 "Confidential Information" includes, but is not limited to,
(a) all information and materials received by either Party
from the other Party pursuant to this Agreement;
(b) all information and materials developed in the course of
the Collaboration; and
(c) the material financial terms of this Agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
3
<PAGE> 4
1.13 "Development Compound(s)" means a compound ( or compounds)
which
(a) (i) is a Lead Compound or (ii) is derived from a Lead
Compound; and
(b) are determined by *** to be appropriate for preclinical
studies for the purpose of IND filing by ImClone.
1.14 "Due Diligence" means the use of the resources of ImClone or
its licensees or CombiChem in a manner which is consistent with the exercise of
prudent scientific and business judgment as applied to other programs of ImClone
or CombiChem, as the case may be, targeting products aimed at markets or patient
groups of similar sizes and of similar scientific and commercial potential. With
respect to any Development Compound, "Due Diligence" shall also require ImClone
or its licensees to conduct all necessary preclinical studies and to file an IND
for such Development Compound within *** from the date upon which ImClone has
designated such Development Compound from any Lead Compound or its derivatives.
1.15 "Exclusivity Period" means the Research Period plus ***.
1.16 "Field" means all therapeutic indications of human disease for
the Collaboration Target.
1.17 "First Commercial Sale" of a Product shall mean the first sale
for use or consumption of such Product in a country after required marketing and
pricing approval has been granted by the governing health regulatory authority
of such country. Sale to an Affiliate or licensee shall not constitute a First
Commercial Sale unless the Affiliate or licensee is the end user of the Product.
1.18 "FTE" means full time equivalent with respect to employees of
CombiChem.
1.19 "ImClone Compound" means a chemical compound that is
proprietary to ImClone, or whose use or manufacture is proprietary to ImClone.
1.20 "Inactive Compound(s)" means a Collaboration Compound(s) which
does not have the In Vitro Activity required for an Active Compound.
1.21 "In Vitro Activity" shall mean the observation of ***
*** .
1.22 "Initial Target" shall have the meaning set forth in Section
4.1 hereof.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
4
<PAGE> 5
1.23 "Lead Compound(s)" means a compound (or compounds) which
(a) is selected from an Active Compound(s) by *** under
the Research Program, or
(b) is derived from Active Compound(s) and is selected by
***
1.24 "Net Sales" means the gross sales invoiced by ImClone or its
Affiliates or licensees for Products to non-Affiliated Third Parties less actual
deductions of returns (including withdrawals and recalls), rebates (price
reductions, including Medicaid and similar types of rebates e.g. chargebacks),
volume (quantity) discounts, discounts granted at the time of invoicing, the
cost of transport, insurance, delivery, sales taxes and other taxes (other than
income taxes) directly linked to and included in the gross sales amount, as
computed on a product-by-product basis for the countries concerned, whereby the
amount of such sales in foreign currencies is converted into United States
dollars at the exchange rate of the last business day for each calendar month as
reported by Citibank, N.A. (New York).
1.25 "Patent" means, (a) valid and enforceable Letters Patent,
including any extension (including Supplemental Protection Certificate),
registration, confirmation, reissue, continuation, divisionals,
continuation-in-part, reexamination or renewal thereof, or (b) pending
applications for any of the foregoing.
1.26 "Payments" shall have the meaning set forth in Section 9.3
1.27 "Party" means CombiChem or ImClone, as the case may be,
including their respective Affiliates, permitted successors and assigns.
1.28 "Product(s)" means any product containing a Development
Compound with such compound as the active ingredient and which is granted
regulatory approval by the governing health regulatory authority of the
applicable country for marketing in the Field.
1.29 "Project Team" shall have the meaning set forth in Section
2.1(c).
1.30 "Research Management Committee" or" RMC" has the meaning set
forth in Article 6 below.
1.31 "Research Period" means the initial twenty-four (24) month term
of the Collaboration, which can be extended in accordance with Section 7.1
below.
1.32 "Research Plan" means the mutually-agreed research plan for the
Collaboration attached hereto as Appendix A.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
5
<PAGE> 6
1.33 "Research Program" means the research to be conducted as part
of the Collaboration under the Research Plan, and shall include, without
limitation, the activities and items set forth in Sections 2.1 and 2.2 of this
Agreement.
1.34 "Returned Compound" shall have the meaning set forth in Section
9.2.
1.35 "Royalty Term" means, in the case of any Product, in any
country, the period of time commencing on the First Commercial Sale and ending
upon the later of (a) ***
*** from the date of First Commercial Sale in such country; or (b) the
expiration of the last-to-expire Patent resulting from the Research Program
filed in the Field with claims covering that Product in the relevant country.
1.36 "Target" means a biomolecular entity that a small molecule is
screened against in order to determine whether the small molecule demonstrates
relevant activity.
1.37 "Territory" means the entire world.
1.38 "Third Party" means an entity other than CombiChem or ImClone
or their respective Affiliates.
1.39 "Universal Informer Library" shall mean CombiChem's proprietary
Universal Informer Library of compounds.
2. RESEARCH COLLABORATION
2.1 CombiChem Responsibilities. CombiChem shall with Due Diligence
conduct the following activities under the Research Program in accordance with
the terms of this Agreement and as more fully described in the Research Plan:
(a) During the Research Period, CombiChem shall (i) review
data and information regarding the Collaboration Targets
provided by ImClone; (ii) based on such data and
information and using the CombiChem Technology, design
informative compound libraries; and (iii) supply all
lead chemistries and synthesize compounds as provided in
Section 5.3 below.
(b) During the Research Period, CombiChem shall keep ImClone
informed of its activities performed in connection with
the Collaboration, including, without limitation,
providing ImClone with
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
6
<PAGE> 7
data and information regarding Collaboration Compounds
prior to the meetings of the Research Management
Committee.
(c) Subject to Article 4 and at all times during the
Research Period, CombiChem shall dedicate a project team
of *** comprised of synthetic and analytical chemists,
compound control scientists, and a computational
scientist (the "Project Team") to conduct all of its
activities in connection with the Collaboration;
provided, however, that the RMC may at any time during
the Research Period substitute employees for the FTEs
described above; provided, further, that ImClone may
request that CombiChem expand its Project Team by adding
additional FTEs to work on the Collaboration at the rate
and in the manner specified in Section 8.2(b).
2.2 ImClone Responsibilities. ImClone shall with Due Diligence
provide CombiChem with the following resources under the Research Program as
more fully described in the Research Plan:
(a) ImClone shall provide CombiChem with support and
assistance useful or necessary for the conduct of the
Research Program, including providing data and
information (including leads and/or screening hits to
the extent available) relating to Collaboration Targets,
certain chemistries useful in compound synthesis,
information concerning assay methods and screening data.
(b) During the Research Period, ImClone shall provide
CombiChem with data and information regarding
Collaboration Compounds and the Collaboration Target
assays developed by ImClone under the Research Program
prior to the meetings of the Research Management
Committee.
(c) During the Exclusivity Period and with Due Diligence,
ImClone shall screen Collaboration Compounds for In
Vitro and, where appropriate, in vivo activity against
the Collaboration Target.
(d) During the Exclusivity Period and with Due Diligence,
ImClone shall (i) screen Lead Compounds, (ii) endeavor
to determine Development Compounds, and (iii) develop
Products.
2.3 Research Plan. The Parties hereby agree that the Research
Program shall be carried out in accordance with the Research Plan which is
attached hereto as Appendix A.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
7
<PAGE> 8
At the direction of the RMC, the Research Program shall involve the use of
CombiChem's Universal Informer Library in order to initiate CombiChem's
discovery process with the objective of identifying Lead Compounds with respect
to a specific Collaboration Target. The Research Management Committee shall
review the Research Plan on an ongoing basis and may make changes to the
Research Plan so long as such changes are mutually agreed to by CombiChem and
ImClone.
2.4 Annual Reports. Following the first IND filing through First
Commercial Sale, ImClone shall provide CombiChem with an annual report
summarizing ImClone's activities in developing Development Compounds.
2.5 Third Party Licenses. Each Party shall be solely responsible
for any Third Party license fees required to perform its obligations under this
Agreement subject to Section 8.4. Any agreements between a Party and a Third
Party shall in all material respects permit performance under this Agreement.
3. EXCLUSIVITY
3.1 Collaboration Target Exclusivity. So long as ImClone or its
licensee is proceeding with Due Diligence, CombiChem shall not work on a
Collaboration Target with any Third Parties. In the event that ImClone or its
licensee fails to exercise Due Diligence with respect to, or notifies CombiChem
that it has abandoned work on, any Collaboration Target (an "Abandoned Target")
and any Collaboration Compound, other than an ImClone Compound which
*** associated with such Collaboration Target (together with
all derivatives of such Collaboration Compound, an "Abandoned Compound"), then,
(a) such Abandoned Target shall not be subject to any provision hereunder, and
(b) such Abandoned Compound shall be available to CombiChem for any purpose
thereafter.
3.2 Active Compounds.
(a) Following the designation of any Collaboration Compound as
an Active Compound, such Active Compound shall be exclusively available to
ImClone during the Research Period. Following the expiration of the Research
Period, Active Compounds with respect to which ImClone fails to proceed with Due
Diligence shall be deemed to be Inactive Compounds for all purposes hereunder;
provided, that any Active Compound which is the subject of claim(s) under a
pending Patent shall continue to be treated as an Active Compound during the
Exclusivity Period so long as ImClone exercises Due Diligence with respect to
any Collaboration Compound.
(b) Prior to the existence of Patent(s) in accordance with
Section 5.2, ImClone shall have exclusive rights in all intellectual property
relating to Active Compounds, their use, and method of manufacture so long as
ImClone continues to show Due Diligence under this Agreement; provided, however,
that ImClone acknowledges and agrees that CombiChem
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
8
<PAGE> 9
reserves the right to assign or grant exclusive rights, including rights to
Active Compounds, to a third party collaborator who first identifies a novel
compound, a novel use of a compound, or a novel method of manufacturing a
compound, to the extent CombiChem is obligated to do so under its existing
contractual obligations. Upon notice by ImClone that it intends to file a Patent
application with respect to any Active Compound, Lead Compound, Development
Compound or Product, CombiChem shall promptly inform ImClone whether CombiChem
has the power to grant the exclusive rights in accordance with this Section 3.2
and the assignments in accordance with Section 5.2; provided, however, that
under no circumstances CombiChem will grant assurances to ImClone to the effect
that any Active Compound, Lead Compound, Development Compound or Product is not
covered under the patent claims of Third Parties wherein such claims are not the
direct result of a collaboration between the Third Party and CombiChem.
3.3 Inactive Compounds/Returned Compounds. Subject to Section 9.4,
Inactive Compounds and Returned Compounds shall be available to both Parties for
any purpose.
4. TARGETS
4.1 Initial Targets. During the Research Period, ImClone may
designate ***
***
***
***
***
***
***
***
***
***
***
***
***
***.
In addition, ImClone's right to designate or substitute a Target (including
those Additional Targets set forth in Section 4.2) relating to ImClone's Areas
of Interest shall be subject to the written notice and approval requirements
specified in Section 4.2(b).
4.2 Additional Targets.
(a) Within ninety (90) days prior to the commencement of the
second 12-month period of the Research Program, ImClone may add up to ***
relating to ImClone's Areas of Interest to the Collaboration by notifying
CombiChem in writing that it wishes to designate such Target(s) as Additional
Target(s); it being understood that the Project Team shall be obligated to
simultaneously work on no more than *** Collaboration Targets as directed by the
RMC.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
9
<PAGE> 10
(b) ***
***
***
***
*** Otherwise, the RMC shall establish the specific scientific achievements
(to be mutually agreed between CombiChem and ImClone) for such Target and the
same shall be designated as an Additional Target for the Collaboration and
subject to the terms (including the commercial terms) of this Agreement.
4.3 Expansion of Project Team. Notwithstanding the provisions of
Sections 4.1 and 4.2, ImClone may request that CombiChem expand its Project Team
during the Research Period in order to accelerate work on Collaboration Targets
and/or to add additional Target(s). In such event, the RMC shall promptly confer
as to the appropriate number of FTEs to be added to Project Team to work on the
Collaboration at a cost to ImClone as specified in Section 2.1(c).
5. COLLABORATION COMPOUNDS
5.1 Pre-Existing Compounds. ImClone shall have no rights to any
pre-existing CombiChem Compound unless and until such compound is designated as
a Collaboration Compound by CombiChem. Additionally, CombiChem may decline to
synthesize a particular compound or library of compounds by reason of existing
Patents or contractual obligations. CombiChem shall have no rights to any
pre-existing ImClone Compound which is not utilized in the Research Program.
5.2 Intellectual Property Rights; Assignment to ImClone. Subject to
Section 3.2(b) above, ImClone shall have the right and responsibility at
ImClone's expense to file, maintain and prosecute Patents relating to Active
Compounds, Lead Compounds, Development Compounds and Products, their use, and
their methods of manufacture. At ImClone's request, CombiChem shall assign all
its right, title and interest in such Patents to ImClone. If ImClone fails to so
file, maintain or prosecute such Patent, CombiChem shall have the right to
request ImClone to do so. If ImClone elects not to file, maintain or prosecute
such Patent, CombiChem shall have the right to take over such filing,
maintenance or prosecution of such Patent, at its sole expense, and ImClone
shall assign all intellectual property rights it may have in the Active
Compound, Lead Compound, Development Compound or Product to CombiChem.
5.3 Supply of Collaboration Compounds. Aliquots of *** of any
Collaboration Compound that has been synthesized will be prepared and given to
ImClone. CombiChem shall replenish that amount upon ImClone's reasonable
request. CombiChem shall maintain aliquots of any Collaboration Compound that
has been synthesized by CombiChem. CombiChem shall also provide ImClone with
additional requirements of samples at CombiChem's cost.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
10
<PAGE> 11
6. RESEARCH MANAGEMENT COMMITTEE
The design, review and conduct of the Research Program will be
coordinated by the Research Management Committee, which will meet regularly on a
mutually-agreeable schedule. The Research Management Committee may establish and
amend or revise the Research Plan as necessary to reflect the scientific
progress and work performed under the Research Program, such amendments to be
mutually agreed to by ImClone and CombiChem. The Research Management Committee
will consist of an equal number of members from ImClone and CombiChem and will
include appropriate representatives from ImClone and CombiChem as mutually
agreed. The co-chairs of the Research Management Committee will initially be the
Vice President, Chemistry of CombiChem and the Vice President for Research of
ImClone and subsequently may change as mutually-agreed upon by the Parties.
Decisions of the Research Management Committee shall be by consensus. If a
decision is not reached by the RMC with respect to management of the Research
Program, the dispute will be referred to the co-chairs of the RMC. If the
co-chairs of the RMC are unable to resolve the dispute, the dispute will be
referred to the respective Chief Executive Officers of CombiChem and ImClone.
7. RESEARCH PERIOD; TERMINATION OF RESEARCH PROGRAM
7.1 Research Period: Option to Extend the Research Period. The
initial term of the Collaboration shall be the Research Period, subject to
extension upon mutual agreement. To extend the Research Period, ImClone must
notify CombiChem no later than ninety (90) days prior to the then-current
expiration date and the Parties shall negotiate in good faith the terms and
conditions of any such extension.
7.2 Termination of Research Program.
(a) The Research Program may be terminated by a Party for the
material breach by the other Party of obligations under the Research Program by
giving the breaching party notice of the breach and of the intent of the
non-breaching Party to terminate the Research Program unless the breach is cured
within *** . The non-breaching Party may terminate the Research Program
following *** by providing the breaching party with *** prior written notice
that the Research Program is terminated, and the Research Program shall be
terminated on the *** following such date.
(b) Within thirty (30) days prior to the one (1) year
anniversary of this Agreement, ImClone and CombiChem senior and scientific
management personnel shall meet to review the status of the Collaboration. ***
***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
11
<PAGE> 12
***
***
***
***
***
***
***.
(c) CombiChem shall, within thirty (30) days following the
effective date of termination under Section 7.2(a) or 7.2(b), ***
***
***
***
***
***
***
***.
8. CONSIDERATION
8.1 Equity Purchase. Upon execution of this Agreement, ImClone shall
purchase 1,000,000 shares (on a pre-split basis and subject to adjustment) of
Common Stock of CombiChem at a per share purchase price equal to $2.00 per share
for an aggregate purchase price of U.S. $2 million, pursuant to the terms of
that certain Common Stock Purchase Agreement, dated as of the Effective Date, by
and between CombiChem and ImClone (together with all ancillary agreements
thereto, the "Stock Purchase Agreement"). ***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
*** .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
12
<PAGE> 13
8.2 Program Funding.
(a) ImClone shall support CombiChem's efforts in conducting
the Research Program by making a payment upon the execution of this Agreement in
the sum of U.S.
***
***
***
***
***
***
***
***.
(b) In the event that the Project Team is expanded in
accordance with Section 4.3, ImClone shall make payments, in cash, to CombiChem,
at a per annum rate of U.S.
*** payable quarterly in advance of the work to be
performed by such FTE(s).
(c) ***
***
***
***
***
***.
8.3 Milestone Payments. Within thirty (30) days of the occurrence of
a development milestone triggered by the activities of ImClone as shown on
Appendix B, ImClone shall pay CombiChem the related milestone payment in U.S.
dollars as set forth on Appendix B. Alternatively, in the event that ImClone
shall outlicense the Patents covering any Product, CombiChem shall be entitled
to the payments set forth in Section 9.3 in lieu of any payments pursuant to
this Section 8.3.
8.4 Royalties.
(a) Direct Sales by ImClone
(i) Subject to Section 8.4(c), during the Royalty
Term, ImClone will pay CombiChem a running royalty of *** sold by ImClone or its
Affiliates in all countries in the Territory. Each payment of royalties shall be
accompanied by a report of Net Sales of Products in sufficient detail to permit
confirmation of the accuracy of the royalty payment made.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
13
<PAGE> 14
(ii) ***
***
***
***.
(b) Sales by ImClone's Licensees
In the event that ImClone outlicenses Active Compounds,
Lead Compounds, Development Compounds and resulting Products are sold by
ImClone's licensees in any country in the Territory, ImClone's royalty payable
to CombiChem shall be as follows:
***
***
***
***
***
***
***
***
***
***
***
***
***
***.
(c) ***
***
***
***
***
***
***
***
***
***
***
***
***
***
***.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
14
<PAGE> 15
***
***
***
***
***.
8.5 Manner and Place of Payment. Royalty payments and reports for
Net Sales of Products shall be calculated in local currencies and reported for
each calendar quarter. All royalty payments owed under this Agreement shall be
made by wire transfer to the bank account to be designated by CombiChem within
thirty (30) days following the end of each such calendar quarter.
8.6 Records and Audit. During the term of this Agreement and for a
period of five (5) years thereafter, ImClone shall keep complete and accurate
records pertaining to the sale or other disposition of Products in sufficient
detail to permit CombiChem to confirm the accuracy of all payments due
hereunder. CombiChem shall have the right to cause an independent certified
public accounting firm reasonably acceptable to ImClone to audit such records to
confirm ImClone's Net Sales for the preceding year. Any information obtained
during such audit shall be treated as Confidential Information. Such audits may
be exercised during normal business hours of ImClone no more than once each
year. CombiChem shall bear the full cost of such audit unless such audit
discloses a variance of more than five percent (5%) in ImClone's favor from the
amount of the Net Sales reported by ImClone for such audited period.
In such case, ImClone shall bear the fill cost of such audit.
8.7 Taxes. All income and other taxes levied on account of the
royalties and other payments accruing to CombiChem under this Agreement shall be
paid by CombiChem, including taxes levied thereon as income to CombiChem. If
provision is made in law or regulation for withholding, such tax shall be
deducted from the royalty or other payment made by ImClone to the proper taxing
authority and a receipt of payment of the tax secured and promptly delivered to
CombiChem. Each Party agrees to assist the other Party in claiming exemption
from such deductions or withholdings under any double taxation or similar
agreement or treaty from time to tune in force.
9. LICENSE GRANTS; OUTLICENSE
9.1 CombiChem License Grant to ImClone. Subject to the terms and
conditions of this Agreement, CombiChem hereby grants to ImClone an exclusive
worldwide license, with the right to sublicense, to use such CombiChem
Technology as is necessary to make, have made, use, have used, sell, have sold
and import Collaboration Compounds or Products in the Territory. Such license
shall remain exclusive in relation to each Collaboration Compound and/or Product
so long as ImClone or its licensee continues to develop and commercialize such
Collaboration Compound and/or Product containing such Collaboration Compound
against a Collaboration Target with Due Diligence.
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9.2 ImClone License Grant to CombiChem. Subject to the terms and
conditions of this Agreement and following the failure of ImClone or its
licensee to develop and commercialize with Due Diligence a Lead Compound, a
Development Compound or Product, as the case may be, (collectively, and together
with all Abandoned Compounds, "Returned Compound"), ImClone shall grant to
CombiChem an exclusive license (exclusive even as to ImClone and its
Affiliates), with the right to sublicense, under those ImClone Patents and
know-how which are resulting from the Research Program and related exclusively
to the Returned
Compound to make, have made, use, have used, sell, have sold and import such
Returned Compound in the Territory.
9.3 ImClone Outlicense. ImClone shall have a right to outlicense the
Patents covering the Product to a Third Party subject to CombiChem's right to
receive ***
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In addition, CombiChem shall have the right to receive all audit reports
relating to sales of Products of ImClone's licensees, and to cause ImClone or
its successor to have an independent certified public accounting firm audit such
licensees records on the same terms as those specified in Section 8.6. All
payments shall be made by wire transfer to such bank account designated by
CombiChem. Failure of such licensee to make any milestone or royalty payment in
respect of such Product shall not relieve ImClone of its obligations to make
royalty and milestone payments to CombiChem hereunder.
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9.4 Rights to Inactive Compounds/Returned Compounds. No provision of
this Agreement shall prevent either Party from making, having made, using,
having used, selling, having sold, or importing Inactive Compounds, products
containing Inactive Compounds, Returned Compounds or products containing
Returned Compounds or screening Inactive Compounds and Returned Compounds
against any target other than the Collaboration Targets.
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9.5 Miscellaneous License. In addition to any other rights granted
by either Party in accordance with this Article 9, each Party grants to the
other party a non-exclusive license without the right to grant sublicenses,
under any intellectual property rights the granting Party has the power to grant
in order for the other Party to carry out its rights and obligations under this
Agreement including, but not necessarily limited to, conducting the Research
Program and manufacturing, developing, selling and importing Products.
10. TERM AND TERMINATION
10.1 Term. The term of this Agreement shall commence upon the
Effective Date of this Agreement, and shall expire on the expiration of the last
royalty obligation under this Agreement, except as provided hereunder.
10.2 Termination by ImClone or CombiChem. Subject to Section 7.2, if
either Party materially breaches this Agreement and fails to remedy that breach
within *** of receiving written notice thereof from the other Party, or enters
into any arrangement of composition with its creditors or goes into liquidation,
insolvency, bankruptcy, receivership or reorganization proceedings, whether
voluntarily or compulsorily which is not dismissed within
*** then the other Party may at any time, by notice in writing or
by telefax, terminate this Agreement.
10.3 After Termination.
(a) Upon any termination of the Research Program under Section
7.2(a) due to a material breach of this Agreement by ImClone, ImClone's rights
pursuant to Sections 3.1, 3.2, 5.3, 9.1, 9.3 and 9.5 shall immediately cease,
and all rights granted hereunder with respect to Targets and Collaboration
Compounds, Active Compounds, Lead Compounds, Development Compounds, or Products
shall immediately revert to CombiChem without further obligation to ImClone.
ImClone's rights pursuant to Section 5.2 and 9.3 above that accrue prior
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to such termination shall be retained by ImClone. ImClone may make, use, sell
and import Active Compounds, Lead Compounds, Development Compounds or Products
under rights retained by ImClone pursuant to this Section 10.3(a) so long as
ImClone continues to satisfy all of its royalty, milestone, and Payment
obligations in accordance with Sections 8.3, 8.4, 9.3 and 9.4.
(b) Upon any termination of the Research Program under Section
7.2(a) due to a material breach of this Agreement by CombiChem with respect to a
Collaboration Compound, Active Compound, Lead Compound, Development Compound or
Product, all of ImClone's rights pursuant to Sections 3.1, 3.2, 5.2, 5.3, 9.1,
9.3 and 9.5 shall be retained by ImClone. ImClone may make, use, sell or import
Active Compounds, Lead Compounds, Development Compounds and Products with
respect to which ImClone is not in material breach under rights retained by
ImClone pursuant to this Section 10.3(b) so long as ImClone continues to satisfy
all of its royalty, milestone, and Payment obligations in accordance with
Sections 8.3, 8.4, 9.3 and 9.4, except that ImClone shall not be required to
satisfy such obligations with respect to any Collaboration Compound, Active
Compound, Lead Compound, Development Compound or Product with respect to which
CombiChem is in material breach.
(c) If ImClone materially breaches this Agreement following
the Research Period with respect to an Active Compound, Lead Compound,
Development Compound or Product for any reason including, but not limited to,
failing to satisfy its royalty, milestone and Payment obligations pursuant to
Sections 8.3, 8.4, 9.3 and 9.4, ImClone shall not make, use, sell or import
Active Compounds, Lead Compounds, Development Compounds or Products with respect
to which ImClone is in material breach. ImClone shall retain the right to make,
use, sell and import Active Compounds, Lead Compounds, Development Compounds or
Products with respect to which ImClone is not in material breach so long as
ImClone continues to satisfy all of its royalty, milestone, and Payment
obligations in accordance with Sections 8.3, 8.4, 9.3 and 9.4.
(d) If CombiChem materially breaches this Agreement following
the Research Period for any reason including, but not limited to, failing to
satisfy its confidentiality and warranty obligations under Articles 11 and 19,
ImClone shall have the right to make, use, sell or import Active Compounds, Lead
Compounds, Development Compounds and Products with respect to which ImClone is
not in material breach so long as ImClone continues to satisfy all of its
royalty, milestone, and Payment obligations in accordance with Sections 8.3,
8.4, 9.3 and 9.4.
(e) Upon any expiration or earlier termination of this
Agreement for any reason, ImClone shall not be entitled to any refund of any
payments made to CombiChem hereunder except as provided in Section 7.2(c).
10.4 Effect of Termination on Licensees. In the event of any
termination of this Agreement pursuant to this Article 10 where such termination
shall not have been caused by the action or inaction on the part of any
respective licensee of ImClone or CombiChem, or by any breach by such licensee
of its obligations under its licensee from ImClone or CombiChem, as appropriate,
such termination of this Agreement shall be without prejudice to the rights of
each non-breaching licensee and such licensee shall be deemed to be a direct
licensee hereunder.
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11. CONFIDENTIAL INFORMATION
11.1 Nondisclosure. During the term of the Collaboration and for a
period of five (5) years after termination thereof, each Party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any third party for any purpose except (i) as
expressly authorized by this Agreement, or (ii) as required by law or court
order, or (iii) to its consultants, subcontractors or agents who need to know to
accomplish the purposes of this Agreement. Each Party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement. Each Party will use at least the same standard of care as it uses to
protect proprietary or confidential information of its own to ensure that its
Affiliates, employees, agents, consultants and other representatives do not
disclose or make any unauthorized use of the Confidential Information. Each
Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information. Confidential Information is
understood to include, but not necessarily to be limited to, the structures of
chemical compounds and the identification of chemical compounds as Collaboration
Compounds, Active Compounds, Inactive Compounds, Lead Compounds, Development
Compounds, or Products.
11.2 Exceptions. Confidential Information shall not include any
information which the receiving Party can prove by competent evidence: (a) is
now, or hereafter becomes, through no act or failure to act on the part of the
receiving Party, generally known or available; (b) is known by the receiving
Party at the time of receiving such information, as evidenced by its records;
(c) is hereafter disclosed to the receiving Party by a Third Party, as a matter
of right and without restriction on disclosure; (d) is independently developed
by the receiving Party without the aid, application or use of Confidential
Information; (e) is the subject of a written permission to disclose provided by
the disclosing Party; or (f) is necessary to obtain regulatory approval for a
Product, or patent protection with respect to Active Compounds, Lead Compounds,
Development Compounds, or Products, and the uses and methods of manufacturing
thereof.
12. PUBLICATIONS AND PUBLIC STATEMENTS
12.1 Publications. Each Party shall be permitted to publish any
information, except Confidential Information, relating to the Research Program
as long as the Party has the prior written permission of the other Party. Such
permission shall be approved or disapproved within twenty-one (21) days of
written request for permission. Such permission shall not be unreasonably
withheld.
12.2 Public Statements. Neither Party shall use the name of the
other Party in any public statement, prospectus, annual report or press release
or other public communication (collectively "Public Statements") without the
prior written approval of the other Party, which may not be unreasonably
withheld or delayed; provided, however, that both Parties shall endeavor in good
faith to give the other Party a minimum of two (2) business days to review such
Public Statements; provided, further, that, upon approval of any such Public
Statement, both Parties may disclose to third parties the information contained
in such Public Statement without the further approval of the other; and
provided, further, that if a Party does not approve such Public Statement,
either Party may still use the name of the other Party in any Public Statement
without the prior written approval of the other Party, if such Party is advised
by counsel that such
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disclosure is required to comply with applicable law.
13. ***
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14. ASSIGNABILITY
This Agreement may not be assigned by either Party without the prior
written consent of the other Party; provided, however, that either Party may
assign this Agreement, in whole or in part, to an Affiliate or to a successor of
a Party in connection with the merger, consolidation or sale of all or
substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this Agreement.
15. DISPUTE RESOLUTION PROCEDURES
15.1 Senior Executives Discussions. If a decision is not reached by
the RMC, the dispute will be resolved as set forth in Article 6 above. If a
dispute arises between CombiChem and ImClone with respect to matters other than
the management of the Research Program, either during or after the Research
Period, such dispute will be referred to the appropriate senior management in
the area of the dispute. If such senior management are unable to resolve such
dispute, such dispute will be referred to the Chief Executive Officers of
CombiChem and ImClone. If such officers are unable to reach an agreement within
thirty (30) days following the initiation of discussions between them, such
dispute shall be settled by arbitration as described in Section 15.2 below.
15.2 Binding Arbitration. If the parties have not been able to
resolve the dispute as provided in Section 15.1 above, the dispute shall be
finally settled by binding arbitration. Any arbitration hereunder shall be
conducted under rules of the American Arbitration Association.
The arbitration shall be conducted before ***
If the Parties cannot agree on the choice of the arbitrator within a period of
thirty (30) days after submission, then the arbitrator shall be appointed by the
Court of Arbitration of the American Arbitration Association. Any such
arbitration shall be held in a mutually agreeable location; provided, however
that if the parties cannot so agree, the location(s) for such arbitration(s)
shall alternate between San Diego, California and New York, New York, with the
first such arbitration to be located in San Diego, California. The arbitrators
shall have the authority to grant specific performance, and to allocate between
the parties the costs of arbitration in such equitable manner as he or she may
determine. The arbitral award (i) shall be final and binding upon the parties;
and (ii) may be entered in any court of competent jurisdiction.
15.3 Injunctive Relief. Nothing contained in this Article 15 or any
other provisions of this Agreement shall be construed to limit or preclude a
Party from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief to compel the other Party to comply with
its obligations hereunder before or during the pendency of arbitration
proceedings.
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16. NOTICES
Any notice required or permitted to be given hereunder shall be
deemed sufficient if sent by facsimile letter or overnight courier, or delivered
by hand to ImClone or CombiChem at the respective addresses and facsimile
numbers as set forth below or at such other address and facsimile number as
either Party hereto may designate. If sent by facsimile letter, notice shall be
deemed given when the transmission is completed if the sender has a confirmed
transmission report. If a confirmed transmission report does not exist, then the
notice will be deemed given when the notice is actually received by the person
to whom it is sent. If delivered by overnight courier, notice shall be deemed
given when it has been signed for. If delivered by hand, notice shall be deemed
given when received.
if to CombiChem, to: CombiChem, Inc.
9050 Camino Santa Fe San Diego, California 92121
Attention: President
Fax number: (619) 530-9998
with a copy to: Brobeck, Phleger & Harrison LLP
550 South Hope Street, 21st Floor
Los Angeles, California 90071
Attention: Laurie A. Allen, Esq.
Fax number: (213) 239-1324
if to ImClone, to: ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Attn: Vice President, Business Development
Fax number: (212) 645-2054
with a copy to: Hoffmann and Baron
350 Jericho Turnpike
Jericho, New York 11753
Attn: Irving N. Feit, Esq.
Fax number: (516) 822-3582
17. SURVIVAL
The provisions of Sections 2.5, 5.1, 5.2, 7.2(c),10.3, 10.4, and
Articles 1, 3, 8, 9, 11, 12, 13, 14, 15, 16, 18 and this Article 17 shall
survive termination of this Agreement in addition to those provisions which by
their terms survive.
18. ADDITIONAL TERMS
18.1 Entire Agreement. This Agreement and the Common Stock Purchase
Agreement constitute the entire understanding between the Parties with respect
to the subject matter hereto and supersedes and replaces all previous
negotiations, understandings, representations, writings and contract provisions
and rights relating hereof. The Parties agree that
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all services provided hereunder shall be subject to and governed by the terms
and provisions set forth herein, and none of the terms and conditions contained
on any proposal, purchase order, invoice or other writing shall have any effect
or change the provisions of this Agreement.
18.2 Amendment; No Waiver. No provision of this Agreement may be
amended, revoked or waived except by a writing signed and delivered by an
authorized officer of each Party. Any waiver on the part of either Party of any
breach or any fight or interest hereunder shall not imply the waiver of any
subsequent breach or waiver of any other right or interest.
18.3 Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, 9each of which shall remain in full force and
effect. In addition, should the invalidity or unenforceability of any provision
of this Agreement cause an unintended result or result in any unfairness to
either Party, then ImClone and CombiChem shall promptly meet and negotiate in
good faith to modify or amend this Agreement to change such result or to
eliminate such unfairness.
18.4 Headings. The descriptive headings are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning of
or interpretation of this Agreement.
18.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
18.6 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without regard to conflicts of laws principles.
19. WARRANTY
Each Party warrants that it has the power to grant all of the rights
granted and make such required assignments, and to assume all of the obligations
required, under this Agreement. If, at the time a Patent application is to be
filed by ImClone with respect to any Active Compound, Lead Compound, Development
Compound or Products, CombiChem informs ImClone that CombiChem has the power to
grant the exclusive rights to such Active Compound, Lead Compound, Development
Compound or Products, and to assign such Patents related thereto, to ImClone in
accordance with Sections 3.2 and 5.2 above, CombiChem further warrants that, in
fact, as of such date, it has such power subject to the proviso that under no
circumstances does CombiChem warrant to ImClone that its rights in any Active
Compound, Lead Compound, Development Compound or Products are exclusive to the
extent such Active Compound, Lead Compound, Development Compound or Products may
be covered under the patent claims of Third Parties wherein such claims are not
the direct result of a collaboration between the Third Party and CombiChem.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
COMBICHEM, INC. IMCLONE SYSTEMS INCORPORATED
By: /s/ Vicente Anido By:/s/ illegible
-------------------------------- -------------------------------------
Its: President and CEO Its:CFO
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Appendix A
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Appendix B
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EXHIBIT 10.23
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
ATHENA NEUROSCIENCES, INC.
OCTOBER 15, 1997
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COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the
"Agreement") is entered into and made effective as of October 15, 1997 (the
"Effective Date"), by and between COMBICHEM, INC., a Delaware corporation
having its principal offices at 9050 Camino Santa Fe, San Diego, California
92121 ("CombiChem") and ATHENA NEUROSCIENCES, INC., a Delaware corporation and a
wholly-owned subsidiary of Elan Corporation, plc ("Elan"), having its principal
offices located at 800 Gateway Boulevard, South San Francisco, California 94080
("Athena").
WHEREAS, CombiChem has developed and owns certain drug discovery
technology and intellectual property rights, including chemical library design
software, multi-parallel synthesis and purification methods, chemical libraries
suitable for high throughput biological screening assays and medicinal chemistry
(collectively, "CombiChem Technology");
WHEREAS, as of the Effective Date, Elan, Athena and their Affiliates
have developed and own certain drug discovery and intellectual property rights,
including certain assays, methods and know how regarding the *** among other
things (collectively "Athena Technology");
WHEREAS, Athena desires to utilize CombiChem Technology for its drug
discovery activities under Athena know-how concerning the identification and
characterization of novel small molecule inhibitors for development as
therapeutics for treatment of central nervous system conditions in humans;
WHEREAS, the parties wish to collaborate in a Research Program
against Target(s) ("Collaboration");
WHEREAS, during the Research Period and for purposes of the
Collaboration, the Parties intend to focus on up to six (6) Collaboration
Targets;
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 "Abandoned Target" shall have the meaning given in Section 4.1.
1.2 "Abandoned Compound" shall have the meaning given in Section
4.1.
1.3 "Active Compound(s)" means a compound (or compounds) which
(a) (i) is selected by *** under the Research Program
from Collaboration Compounds under Section 4.2, or
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(ii) is a Derivative of a Collaboration Compound which
is so by *** and
(b) shows In Vitro Activity.
1.4 "Affiliate" of a Party means any corporation or other business
entity controlled by, controlling or under common control with, such Party. For
this purpose "control" shall mean direct or indirect beneficial ownership of
more than fifty percent (50%) of the voting securities or income interest in
such corporation or other business, or if not meeting the preceding
requirements, any company owned or controlled by or owning or controlling such
Party at the maximum control or ownership right permitted in the country where
such company exists.
1.5 "Athena Compound" means a chemical compound that is proprietary
to Athena or whose use or manufacture is proprietary to Athena or its
Affiliates.
1.6 "Athena Technology" shall have the meaning set forth in the
preamble of this Agreement.
1.7 "Collaboration" has the meaning set forth in the preamble.
1.8 "Collaboration Compound(s)" means a compound (or compounds)
which (a) is synthesized following the Effective Date for screening against a
Collaboration Target under the Research Program, (b) is a pre-existing or
hereafter acquired CombiChem compound which CombiChem desires to designate as a
Collaboration Compound, or (iii) is a pre-existing or hereafter acquired Athena
compound which Athena desires to designate as a Collaboration Compound.
1.9 "Collaboration Library" means a library synthesized under the
direction of the RMC, containing compounds designed to provide information
regarding activity against a specific Collaboration Target.
1.10 "Collaboration Target(s)" means either an Initial Target or an
Optional Target.
1.11 "CombiChem Compound" means a chemical compound that is
proprietary to CombiChem, or whose use or manufacture is proprietary to
CombiChem.
1.12 "CombiChem Technology" has the meaning set forth in the
preamble.
1.13 "Confidential Information" includes, but is not limited to,
(a) all information and materials received by either Party
from the other Party pursuant to this Agreement which is
confidential under Article 11;
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(b) all information and materials by either Party arising
out of the Collaboration during the Research Period;
(c) all Daughter Libraries, excluding Inactive Compounds and
Returned Compounds; and
(d) the financial terms of this Agreement.
1.14 "Daughter Libraries" shall mean the compound libraries which
are designed and synthesized as a part of the Collaboration.
1.15 "Derivative" shall mean a compound (or compounds) which has
resulted from subsequent chemical synthesis to generate an Active Compound or
Development Compound in support of the Research Program.
1.16 "Development Compound(s)" means a compound ( or compounds)
which
(a) (i) is an Active Compound or (ii) is a Derivative of an
Active Compound; and
(b) is determined by *** to be appropriate for preclinical
studies for the purpose of IND filing by Athena.
1.17 "Due Diligence" means the use of by a Party of its or its
Affiliates' resources in a manner which is consistent with the exercise of
reasonable and prudent scientific and business judgment as applied to other
programs of Athena or CombiChem, as the case may be, targeting products aimed at
markets or patient groups of similar sizes and of similar scientific and
commercial potential. With respect to any Development Compound, ***
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Diligence by any Party shall be established if such Party receives written
notice describing such failure and does not cure such failure within ninety (90)
days of the receipt of such notice.
1.18 "Exclusivity Period" means the Research Period ***
1.19 "Field" means all therapeutic and diagnostic indications in
humans for any target against which an Active Compound, Development Compound or
Products may be directed.
1.20 "First Commercial Sale" of a Product shall mean the first sale
for use or consumption of such Product in a country after required marketing and
pricing approval has been granted by the governing health regulatory authority
of such country. Sale to an Affiliate shall not constitute a First Commercial
Sale unless the Affiliate is the end user of the Product.
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1.21 "FTE" shall mean a full-time equivalent employee of CombiChem.
For of this Agreement, the FTEs shall include ***
***
1.22 "Inactive Compound(s)" means a Collaboration Compound(s) which
does not have the In Vitro Activity required for an Active Compound.
1.23 "In Vitro Activity" shall mean the observation of *** in assays
as described by Athena in the Research Plan for each Collaboration Target.
1.24 "Initial Target" shall have the meaning set forth in Section
3.1 hereof.
1.25 "Net Sales" means the gross sales invoiced by Athena or its
Affiliates for Products to non-Affiliated Third Parties (and to Affiliates who
are the end users of such Products) less actual deductions or returns (including
withdrawals and recalls), rebates (price reductions, including formulary or
Medicaid and similar types of rebates, e.g. chargebacks), cash, trade or volume
(quantity) discounts, discounts granted at the time of invoicing, the cost of
transport, insurance, delivery, sales taxes and use, tariff, excise or other
taxes (other than income taxes) directly linked to and included in the gross
sales amount as computed on a product-by-product basis for the countries
concerned, whereby the amount of such sales in foreign currencies is converted
into United States dollars at the exchange rate of the last business day for
each calendar month as reported in The Wall Street Journal.
1.26 ***
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1.27 "Patent" means (a) valid and enforceable Letters Patent, and
any non-U.S. equivalent, including any extension (including Supplemental
Protection Certificates), registration, confirmation, reissue, continuation,
divisionals, continuation-in-part, reexamination or renewal thereof, or (b)
pending applications for any of the foregoing, whether filed or issued before or
after the Effective Date of this Agreement.
1.28 "Party" means CombiChem or Athena, as the case may be,
including their respective Affiliates, permitted successors and assigns.
1.29 "Product(s)" means any product containing an Active Compound or
Development Compound with such compound as the active ingredient and which is
granted regulatory approval by the governing health regulatory authority of the
applicable country for marketing in the Field.
1.30 "Project Team" shall have the meaning set forth in Section
2.1(c).
1.31 "Proposed Targets" shall have the meaning given in Section 3.1.
1.32 ***
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1.33 "Research Management Committee" or "RMC" has the meaning set
forth in Article 6 below.
1.34 "Research Period" means the initial term of the Collaboration
commencing on the Effective Date and *** unless earlier terminated, which can be
extended in accordance with Section 7.1 below.
1.35 "Research Plan" means the research plan to be agreed in writing
between the Parties, which describes the research activities to be performed for
each Collaboration Target.
1.36 "Research Program" means the research to be conducted for the
Collaboration including, without limitation, the activities described in the
Research Plan and set forth in Sections 2.1 and 2.2 of this Agreement.
1.37 "Returned Compound" shall have the meaning set forth in Section
9.2.
1.38 "Royalty Term" means, in the case of any Product, in any
country, the period of time commencing on the First Commercial Sale and ending
upon the later of ***
*** from the date of First Commercial Sale in such country; or (b) the
expiration of the last-to-expire Patent resulting from the Research Program
filed in the Field during the Exclusivity Period with claims covering that
Product in the relevant country.
1.39 "Target" means a biomolecular entity that a small molecule is
synthesized against wherein the small molecule demonstrates relevant activity.
1.40 "Territory" means the entire world.
1.41 "Third Party" means an entity other than CombiChem or Athena or
their respective Affiliates.
1.42 "UIL" means CombiChem's proprietary Universal Informer
Library(TM).
2. RESEARCH COLLABORATION
2.1 CombiChem Responsibilities. CombiChem shall with Due Diligence
provide the following resources to Athena and conduct the following activities
under the Research Program and as more fully described in the Research Plan:
(a) During the Research Period, CombiChem shall (i) review
data and information regarding the Collaboration Targets
provided by Athena; (ii) based on such data and
information and using the
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CombiChem Technology, design Daughter Libraries; and
(iii) supply all lead chemistries and synthesize
compounds as provided in Section 5.4 below.
(b) During the Research Period, CombiChem shall keep Athena
informed of its activities performed in connection with
the Collaboration, including, without limitation,
providing Athena with data and information (and, upon
Athena's request, reasonable quantities of samples
pursuant to Section 5.4) regarding the status of all
Collaboration Compounds prior to the meetings of the
Research Management Committee.
(c) Subject to Section 2.3, Article 3 and Section 8.3, and
at all times during the Research Period, ***
***
***
***
***
***
***
***.
2.2 Athena Responsibilities. Athena shall with Due Diligence provide
the following resources to CombiChem and conduct the following activities under
the Research Program as more fully described in the Research Plan:
(a) Athena shall provide CombiChem with funding for the
Collaboration as set forth in Article 8, provide
screening, biological and structural data and
information (including leads and/or screening hits and
assay methods relating to Collaboration Compounds) to
CombiChem with respect to the Collaboration necessary
for CombiChem to perform its duties under this
Agreement, and will assume scientific, financial and
administrative responsibility for screening and
biological support activities, drug development and
regulatory filings during and after the term of the
Collaboration on the terms set forth below. ***
***
***.
(b) During the Research Period, Athena shall provide
CombiChem with data and information regarding
Collaboration Compounds and the Collaboration Target
assays developed by Athena under the Research Program
prior to the meetings of the Research Management
Committee.
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(c) During the Exclusivity Period, Athena shall ***
***
***.
(d) During the Exclusivity Period, with respect to any
Collaboration Target against which an Active Compound
has designated by the RMC, Athena shall (i) *** (ii)
endeavor to determine Development Compounds, and (iii)
endeavor to develop Products. ***
***
***.
(e) Following the first IND filing through First Commercial
Sale, Athena shall provide CombiChem with an annual
report summarizing Athena's activities in developing
Development Compounds.
2.3 Conduct of Research Program. The Parties hereby agree that the
Research Programs shall be carried out in accordance with the Research Plan, as
amended from time to time. The Research Management Committee shall review the
Research Plan on an ongoing basis and may make changes to the Research Plan so
long as such changes are mutually agreed to by CombiChem and Athena. ***
***
***
***
***
***
***
***
***.
2.4 Third Party Licenses. Each Party shall be solely responsible for
any Third Party license fees required to perform its obligations under this
Agreement.
3. TARGETS
3.1 ***
***
***
***
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***
***.
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3.2 ***
***
***
***
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***
***
***
***
***
***
***
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***.
4. EXCLUSIVITY
4.1 Collaboration Target Exclusivity. Prior to designating a
Collaboration Target for an active Research Program under Article 3, and
thereafter so long as ***
***
***
***
***
***
***
***
***
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***
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***.
4.2 Active Compounds. Following the designation of any Collaboration
Compound as an Active Compound, such Active Compound shall be exclusively
available to Athena for research or application to any Target, within or outside
the Collaboration, during the
*** and CombiChem shall not knowingly work on or knowingly provide
information regarding such Active Compound to any Third Party, except to reject
and take any steps necessary to protect Athena's exclusivity hereunder.
Following the expiration of the *** *** Active Compounds for that Target ***
*** shall be deemed to be Inactive Compounds for
all purposes ; provided, that any Active Compound which is ***
***
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***
***
***.
4.3 Inactive and Returned Compounds. Any Inactive Compounds and
Returned Compounds shall be *** *** following the designation of a Collaboration
Compound as an Inactive Compound or Returned Compound.
4.4 Duration of Exclusivity for Collaboration Targets.
Notwithstanding any other provision of this Agreement, ***
***
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***
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***.
4.5 ***
***
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***.
***
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***
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***
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***
***
***.
4.6 Survival. This Article 4 shall survive termination or
expiration of this.
5. COLLABORATION COMPOUNDS
5.1 Pre-Existing Compounds. Neither Party shall have any rights to
any pre-existing compound of the other Party unless and until such compound is
designated as a Collaboration Compound by such Party. Additionally, CombiChem
may decline (after informing Athena) to synthesize a particular compound or
library of compounds by reason of existing Patents or contractual obligations.
5.2 ***
***
***
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***
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***
***
***
***
***
***
***
***
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***
***
***
***
***
***.
5.3 Structural Information. Neither Party shall disclose the
structure of any Active Compound to any Third Party without the other Party's
written permission, unless required to do so by law, in which case such Party
shall promptly notify the other Party of such required disclosure. If a subpoena
or other legal process concerning the same is served upon either Party,
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the other Party shall cooperate with the Party served in any effort to contest
the validity of such subpoena or other legal process.
5.4 Supply of Collaboration Compounds. Aliquots of at least ***
milligrams of any Collaboration Compound that has been synthesized will be
prepared and given to Athena. CombiChem shall replenish that amount upon
Athena's reasonable request. CombiChem shall maintain aliquots of any
Collaboration Compound that has been synthesized by CombiChem. CombiChem shall
also provide Athena with additional requirements of samples at CombiChem's cost.
6. RESEARCH MANAGEMENT COMMITTEE
The design, review and conduct of the Research Program will be
coordinated by the Research Management Committee, which will meet regularly on a
mutually-agreeable schedule. Each Party shall bear its own expenses related to
such meetings. The Research Management Committee may establish and amend or
revise the Research Plan as reasonable and necessary to reflect the scientific
progress and work performed under the Research Program, such amendments to be
mutually agreed to in writing by Athena and CombiChem. The Research Management
Committee will consist of an equal number of members from Athena and CombiChem
and will include appropriate representatives from Athena and CombiChem as
mutually agreed. The co-chairs of the Research Management Committee will
initially be the Vice President, Chemistry of CombiChem and the Vice President,
Research of Athena and subsequently may change as each Party determines for its
co-chair. Decisions of the Research Management Committee shall be by consensus.
***
***
***
***
***
***.
7. RESEARCH PERIOD; TERMINATION OF RESEARCH PROGRAM
7.1 Research Period: Option to Extend the Research Period. The
initial term of the Collaboration shall be *** subject to extension upon mutual
agreement. To extend the Research Period, Athena must notify CombiChem no later
than ninety (90) days prior to the then-current expiration date and the Parties
shall negotiate in good faith the terms and conditions of any such extension.
7.2 Termination of Research Program Upon Breach. The Research
Program and/or this Agreement may be terminated by a Party for the material
breach by the other Party as provided by Section 10.2.
7.3 Termination by Athena. Athena may terminate this Agreement
effective at any time after *** in its sole discretion, upon ninety (90) days'
prior written notice. Athena may also terminate any part of the Research Program
directed at one or
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more of the Collaboration Targets, also upon ninety (90) days' prior written
notice, at any time during the Collaboration, in which case the RMC shall
reallocate the FTEs affected to any of the other Collaboration Targets.
8. CONSIDERATION
8.1 ***
***
***
***
***
***
***
***.
8.2 Equity Purchase. *** an Affiliate of Athena, shall purchase
shares of Common Stock of CombiChem pursuant to the terms of that certain Common
Stock Purchase Agreement, dated as of the Effective Date, by and between
CombiChem and EIS (the "Stock Purchase Agreement").
8.3 Program Funding.
(a) ***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***.
(b) Expansion of Project Team. Athena may request that
CombiChem expand its Project Team during the Research Period in order to
accelerate work on Collaboration Targets and/or to add Optional Targets. In such
event, the RMC shall promptly confer as to the appropriate number of FTEs to be
added to the Project Team, at a cost to Athena of U.S. *** per FTE to be paid as
specified in Section 8.3(a).
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8.4 Milestone Payments. Within thirty (30) days of the occurrence of
a development milestone triggered by the activities of Athena or its Affiliates
as shown on Appendix A, Athena shall pay CombiChem the related milestone payment
in U.S. dollars as set forth on Appendix A. Such payments shall apply to any
milestone reached by an Active Compound, Development Compound or Product,
whether the Target is within or outside the Collaboration.
8.5 Royalties. During the Royalty Term, Athena will pay CombiChem
a *** of Net Sales of Products sold by Athena or its Affiliates in all countries
in the Territory. Each payment of royalties shall be accompanied by a report of
Net Sales of Products in sufficient detail to permit confirmation of the
accuracy of the royalty payment made.
8.6 Manner and Place of Payment. Royalty payments and reports for
Net Sales of Products shall be calculated in local currencies and reported for
each calendar quarter. All royalty payments owed under this Agreement shall be
made by wire transfer to the bank account to be designated by CombiChem within
sixty (60) days following the end of each such calendar quarter.
8.7 Records and Audit. During the term of this Agreement and for a
period of three (3) years thereafter, Athena shall keep complete and accurate
records pertaining to the sale or other disposition of Products in sufficient
detail to permit CombiChem to confirm the accuracy of all payments due
hereunder. CombiChem shall have the right to cause an independent certified
public accounting firm reasonably acceptable to Athena to audit such records to
confirm Athena's Net Sales for the preceding year. Any information obtained
during such audit shall be treated as Confidential Information. Such audits may
be exercised after reasonable notice during normal business hours of Athena no
more than once each year. CombiChem shall bear the full cost of such audit
unless such audit discloses a deficiency of the
*** from the amount of the Net Sales reported by Athena for such audited
period. In such case, Athena shall bear the reasonable cost of such audit.
8.8 Taxes. All income and other taxes levied on account of the
royalties and other payments accruing to CombiChem under this Agreement shall be
paid by CombiChem, including taxes levied thereon as income to CombiChem. If
provision is made in law or regulation for withholding, such tax shall be
deducted from the royalty or other payment made by Athena to the proper taxing
authority and a receipt of payment of the tax secured and promptly delivered to
CombiChem. Each Party agrees to assist the other Party reasonably in claiming
exemption from such deductions or withholdings under any double taxation or
similar agreement or treaty from time to time in force.
9. LICENSE GRANTS; OUTLICENSE
9.1 CombiChem License Grant to Athena. Subject to the terms and
conditions of this Agreement, CombiChem hereby grants to Athena an exclusive,
royalty-free, worldwide license, with the right to sublicense to use such
CombiChem Technology as is necessary to make,
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have made, use, have used, sell, have sold, import and export Collaboration
Compounds or Products in the Territory. Such license shall remain exclusive
(including as to CombiChem) in relation to each Active Compound, Development
Compound and/or Product so long as Athena or its licensee continues to develop
and commercialize such Active Compound, Development Compound and/or Product
against a Collaboration Target with Due Diligence.
9.2 Athena License Grant to CombiChem. Subject to Article 4 and
following the failure of Athena or its licensee to develop and commercialize
with Due Diligence an Active Compound, a Development Compound or Product, as the
case may be (collectively, and together with all Abandoned Compounds, "Returned
Compounds"), Athena shall grant to CombiChem a non-exclusive, royalty-free
license, with the right to sublicense, under those Athena Patents and know-how
which are resulting from the Research Program and related exclusively to the
Returned Compound, to make, have made, use, have used, sell, have sold, import
and export such Returned Compound in the Territory.
9.3 Athena Outlicense. Athena shall have the right to transfer,
assign or to a Third Party the Products or Patents covering the Products,
subject to right to receive ***
***
***
***
***
***
***.
All Payments shall be made to CombiChem by wire transfer to such bank account
designated by CombiChem within five (5) business days after receipt by Athena or
its Affiliates of such Payments from the Third Party. As an express condition of
any such outlicense, any such licensee shall be required to agree in writing to
be bound by due diligence, royalty reporting and recordkeeping and inspection
provisions no less stringent than those contained in this Agreement. In
addition, CombiChem shall have the right to receive all audit reports relating
to sales of Products of Athena's licensees, and to cause Athena or its
Affiliates or successors to have an independent certified public accounting firm
(reasonably acceptable to Athena) audit such licensee's records on the same
terms as those specified in Section 8.6. Failure of such licensee to make any
milestone or royalty payment in respect of such Product shall not relieve Athena
of its obligations to make royalty and milestone payments to CombiChem
hereunder.
9.4 Rights to Inactive Compounds. Except for any Athena Compounds
(which remain proprietary to Athena), each of Athena and, subject to Athena's
Patent rights, CombiChem shall have rights to make, have made, use, have used,
sell, have sold, import and export Inactive Compounds or products containing
Inactive Compounds. ***
***
***
***
***
***.
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10. TERM AND TERMINATION OF THE AGREEMENT
10.1 Term. The term of this Agreement shall commence upon the
Effective Date of this Agreement, and unless earlier terminated as provided in
this Agreement, shall expire on
*** .
10.2 Termination by Athena or CombiChem. If either Party materially
breaches this Agreement and fails to remedy that breach within ninety (90) days
of receiving written notice thereof from the other Party, or enters into any
arrangement of composition with its creditors or goes into liquidation,
insolvency, bankruptcy, receivership or reorganization proceedings, whether
voluntarily or compulsorily which is not dismissed within ninety (90) days, then
the other Party may at any time, by notice in writing or by telefax, terminate
this Agreement. Within sixty (60) days following termination for any Research
Program and/or research related to any Target under this Agreement, the RMC
shall prepare a detailed, final written report to each Party, and provide any
remaining supply of compounds in synthesis to date, for each Target or Research
Program being terminated.
10.3 After Termination. Any termination of this Agreement or the
Research Program shall be without prejudice to the accrued rights of either
Party prior to the termination. In case of termination of this Agreement or the
Research Program pursuant to Section 10.2 above, all royalty, milestone, Payment
and confidentiality obligations set forth in Sections 8.1, 8.4, 8.5, 9.3, 9.4
and Articles 11 and 12 shall survive any such termination. Moreover, Athena
shall not be entitled to any refund of any payments made to CombiChem hereunder
upon the expiration of the term of this Agreement or earlier termination
pursuant to this Article 10.
10.4 Effect of Termination on Licensees. In the event or any
termination of this Agreement pursuant to this Article 10 where such termination
shall not have been caused by the action of inaction on the part of any
respective licensee of Athena or CombiChem, or by any breach by such licensee of
its obligations under its licensee from Athena or CombiChem, as appropriate,
such termination of this Agreement shall be without prejudice to the rights of
each non-breaching licensee and such licensee shall be deemed to be a direct
licensee hereunder.
11. CONFIDENTIAL INFORMATION
11.1 Nondisclosure. During the term of this Agreement and for a
period of *** *** after termination thereof, each Party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any third party or use any Confidential Information
for any purpose except (i) as expressly authorized by this Agreement, (ii) as
required by law or court order, after as much advance notice as is practical to
the other Party, (iii) to its consultants, subcontractors or agents who need to
know to accomplish the purposes of this Agreement and who are bound by
equivalent written confidentiality obligations. Each Party may use the other
Party's Confidential Information only to the extent required to accomplish the
purposes of this Agreement. Each Party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that its
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Affiliates, employees, agents, consultants and other representatives do not
disclose or make any unauthorized use of the Confidential Information. Each
Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
11.2 Exceptions. Confidential Information shall not include any
information which the receiving Party can prove by competent evidence: (a) is
now, or hereafter becomes, through no act or failure to act on the part of the
receiving Party, generally known or available; (b) is known by the receiving
Party at the time of receiving such information, as evidenced by its records;
(c) is hereafter disclosed to the receiving Party by a Third Party, as a matter
of right and without restriction on disclosure; (d) is independently developed
by the receiving Party without the aid, application or use of Confidential
Information; or (e) is the subject of a written permission to disclose provided
by the disclosing Party.
12. PUBLICATIONS AND PUBLIC STATEMENTS
12.1 Publications. Without affecting obligations under Article 11
above, neither Party shall publish any information with respect to Collaboration
Compounds or Development Compound during the Exclusivity Period without the
prior written permission of the other Party. Such permission shall be approved
or disapproved within thirty (30) days of written request for permission unless
the other Party requests additional time (not to exceed ninety (90) days) for
the purpose of protecting its intellectual property position. Such permission
shall not be unreasonably withheld. The Party proposing to publish such
information shall give the other Party ninety (90) days prior written notice and
an opportunity to review such manuscript in order to determine the patentability
of the information contained therein.
12.2 Public Statements. Neither Party shall use the name of the
other Party in any public statement, prospectus, annual report or press release
or other public communication (collectively "Public Statements") without the
prior written approval of the other Party, which may not be unreasonably
withheld or delayed; provided, however, that both Parties shall endeavor in good
faith to give the other Party a minimum of two (2) business days to review such
Public Statements; provided, further, that, upon approval of any such Public
Statement, both Parties may disclose to Third Parties the information contained
in such Public Statement without the further approval of the other; and
provided, further, that if a Party does not approve such Public Statement,
either Party may still use the name of the other Party in any Public Statement
without the prior written approval of the other Party, if such Party is advised
by counsel that such disclosure is required to comply with applicable law.
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13. ***
13.1 ***
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13.2 ***
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13.3 ***
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14. ASSIGNABILITY
This Agreement may not be assigned by either Party without the prior
written consent of the other Party, not to be unreasonably withheld; provided,
however, that either Party may assign this Agreement, in whole or in part, to an
Affiliate ***
*** or to a successor
of a Party in connection with the merger, consolidation or sale of all or
substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this Agreement (and upon doing so will
promptly notify the other Party in writing); provided that the assigning Party
remains fully liable as obligated hereunder.
15. DISPUTE RESOLUTION PROCEDURES
15.1 Senior Executives Discussions. If a decision on a matter
regarding the management of the Research Program as provided herein is not
reached by the RMC, the dispute will be resolved as set forth in Article 6
above. If a dispute arises between CombiChem and Athena with respect to matters
other than the management of the Research Program, either during or after the
Research Period, such dispute will be referred to the appropriate senior
management in the area of the dispute. ***
***
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***
***
***.
15.2 Binding Arbitration. If the parties have not been able to
resolve the dispute as provided in Section 15.1 above, the dispute shall be
finally settled by binding arbitration. Any arbitration hereunder shall be
conducted under rules of the American Arbitration Association. The arbitration
shall be conducted before three arbitrators chosen according to the following
procedure: each of the parties shall appoint one arbitrator and the two so
nominated shall choose the third. If the arbitrators chosen by the parties
cannot agree on the choice of the third arbitrator within a period of thirty
(30) days after their appointment, then the third arbitrator shall be appointed
by the Court of Arbitration of the American Arbitration Association. If
CombiChem brings an arbitration action, such arbitration shall occur in San
Francisco, California. If Athena brings an arbitration action, such arbitration
shall occur in San Diego, California. The arbitrators shall have the authority
to grant specific performance, and to allocate between the parties the costs of
arbitration in such equitable manner as they determine. The arbitral award (i)
shall be final and binding upon the parties; and (ii) may be entered in any
court of competent jurisdiction.
15.3 Injunctive Relief. Nothing contained in this Article 15 or any
other provisions of this Agreement shall be construed to limit or preclude a
Party from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief to compel the other Party to comply with
its obligations hereunder before or during the pendency of arbitration
proceedings.
16. NOTICES
Any notice required or permitted to be given hereunder shall be
deemed sufficient if sent by facsimile letter or overnight courier, or delivered
by hand to Athena or CombiChem at the respective addresses and facsimile numbers
as set forth below or at such other address and facsimile number as either Party
hereto may designate. If sent by facsimile letter, notice shall be deemed given
when the transmission is completed if the sender has a confirmed transmission
report. If a confirmed transmission report does not exist, then the notice will
be deemed given when the notice is actually received by the person to whom it is
sent. If delivered by overnight courier, notice shall be deemed given when it
has been signed for. If delivered by hand, notice shall be deemed given when
received.
if to CombiChem, to:
CombiChem, Inc.
9050 Camino Santa Fe
San Diego, California 92121
Attention: President
Fax number: (619) 530-9998
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with a copy to:
Brobeck, Phleger & Harrison LLP
550 South Hope Street, 21st Floor
Los Angeles, California 90071
Attention: Laurie A. Allen, Esq.
Fax number: (213) 239-1324
if to Athena, to:
Athena Neurosciences, Inc.
800 Gateway Boulevard
South San Francisco, California 94080
Attn: General Counsel
Fax number: (415) 875-3620
17. SURVIVAL
The provisions of Sections 2.4, 5.1, 5.2, 5.3, 10.3, 10.4 and Articles 4,
8, 9, 11, 12, 13, 15, and this Article 17 shall survive termination of this
Agreement in addition to those provisions which by their terms survive.
18. ADDITIONAL TERMS
18.1 Entire Agreement. This Agreement and the Common Stock Purchase
Agreement constitute the entire understanding between the Parties with respect
to the subject matter hereto and supersedes and replaces all previous
negotiations, understandings, representations, writings and contract provisions
and rights relating hereof.
18.2 Amendment; No Waiver. No provision of this Agreement may be amended,
revoked or waived except by a writing signed and delivered by an authorized
officer of each Party. Any waiver on the part of either Party of any breach or
any fight or interest hereunder shall not imply the waiver of any subsequent
breach or waiver of any other right or interest.
18.3 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, each of which shall remain in full force and effect.
18.4 Headings. The descriptive headings are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning of or
interpretation of this Agreement.
18.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
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18.6 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without regard
to conflicts of laws principles.
18.7 Further Assurances. At any time and from time to time after the
Effective Date, the Parties shall each do, execute, acknowledge and deliver, and
cause to be done, executed, acknowledged or delivered, all such further acts,
transfers, conveyances, or assignments as may be reasonably required to carry
out the transactions contemplated by this Agreement
19. REPRESENTATIONS AND WARRANTIES
19.1 Authorization. All action on the part of each of CombiChem, Athena
and their respective officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of CombiChem, Athena and Athena, respectively, hereunder has
been taken. ***
***
***.
19.2 Compliance with Other Instruments. The execution, delivery and
performance by CombiChem of this Agreement and the consummation of the Research
Program hereunder will not result in a violation of, or be in material conflict
with, or constitute a material default, under any agreement in existence as of
the Effective Date between CombiChem and its Third Party Collaborators. Subject
to Section 5.2 and except for the rights expressly reserved by CombiChem
therein, from the Effective Date until the expiration or termination of this
Agreement, CombiChem agrees that it shall not enter into any agreement with any
Third Party collaborator which would be in material conflict with, or cause a
default under, this Agreement.
19.3 Rights to Intellectual Property. Each Party warrants that it has the
power to grant all of the rights granted and make such required assignments, and
to assume all of the obligations required, under this Agreement. Under no
circumstances does CombiChem warrant to Athena that its rights in any Active
Compound, Development Compound or Products are exclusive to the extent such
Active Compound, Development Compound or Products may be covered under the
patent claims of Third Parties wherein such claims are not the direct result of
a collaboration between the Third Party and CombiChem.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
COMBICHEM, INC. ATHENA NEUROSCIENCES, INC.
By: Vicente Anido, Jr. By:/s/illegible
-------------------------------- -------------------------------------
Its: President & CEO Its:Vice President & General Counsel
------------------------------- ------------------------------------
[SIGNATURE PAGE TO THE COLLABORATIVE
RESEARCH AND LICENSE AGREEMENT]
22
<PAGE> 23
Appendix A
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