<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996 Commission File Number 0-27698
CHIREX INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-3296309
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
65 WILLIAM STREET 02181
WELLESLEY, MASSACHUSETTS (Zip Code)
(Address of Principal Executive
Office)
617-431-2200
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
-- --
<TABLE>
Number or shares outstanding of the issuer's classes of common stock as of April 30, 1996;
<CAPTION>
Class Number of Shares Outstanding
- - ------------------------------------- ----------------------------
<S> <C>
Common Stock, par value $.01 per share 10,903,142
</TABLE>
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<PAGE> 2
CHIREX INC.
INDEX
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995 3
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31,
1996 AND 1995 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31,
1996 AND 1995 5
NOTES TO CONSOLIDATED INTERIM FINANCIAL
STATEMENTS 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE 14
This Quarterly Report on Form 10-Q contains forward-looking statements. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements. The
important factors discussed below under the caption "Certain Factors that May
Affect Future Operating Results," among others, could cause actual results to
differ materially from those indicated by forward-looking statements made herein
and presented elsewhere by management from time to time.
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<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
<TABLE>
CHIREX INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
(in thousands)
March 31 December 31
1996 1995
---- ----
ASSETS
ChiRex Inc. Crossco (157) SepraChem
Limited Inc.
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 6,248 $ 7,845 $ 0
Trade and other receivables 11,576 8,335 546
Inventories 19,030 18,547 193
Other current assets 903 366 1,646
-------- ------- ------
Total current assets 37,757 35,093 2,385
Property, plant and equipment, net 58,509 44,868 307
Intangible assets, net 28,844 0 0
-------- ------- ------
Total Assets $125,110 $79,961 $2,692
======== ======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,128 $ 5,374 $ 0
Accrued expenses 3,764 7,881 0
Income taxes payable 731 996 0
Deferred income taxes 500 0 0
Current portion of long-term debt 650 660 0
-------- ------- ------
Total current liabilities 12,773 14,911 0
Long-term debt 10,825 40,304 0
Deferred income taxes 6,822 3,453 0
Deferred income 3,324 2,962 0
Accrued expenses 6,160 4,425 0
-------- ------- ------
Total liabilities 39,904 66,055 0
-------- ------- ------
Cumulative redeemable preferred stock
at redemption value 0 13,541 0
Stockholders' equity
Common stock 108 173 80
Additional paid-in capital 97,623 1,560 5,064
Retained earnings (12,525) (1,201) (2,452)
Cumulative translation adjustment 0 (167) 0
-------- ------- ------
Total stockholders' equity 85,206 365 2,692
-------- ------- ------
Total liabilities and stockholders' equity $125,110 $79,961 $2,692
======== ======= ======
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
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<PAGE> 4
<TABLE>
CHIREX INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED
MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
(in thousands, except per share amounts)
1996 1995
---- ----
Sterling
Crossco (157) Limited ChiRex Inc. Organics SepraChem
pre-acquisition Limited Inc.
<S> <C> <C> <C> <C>
Revenues:
Product sales $15,212 $ 7,276 $23,833 $275
License fees and royalty income 0 323 0 141
------- -------- ------- -----
Total revenues $15,212 7,599 23,833 416
Costs and expenses:
Cost of goods sold 13,545 6,031 21,014 272
Research and development 387 233 475 242
Selling, general and administrative 443 415 442 726
Write-off of in-process research and
development 0 5,790 0 0
Compensation related to stock
plans 0 5,286 0 0
------- -------- ------- -----
Total operating expenses 14,375 17,755 21,931 1,240
Operating profit (loss) 837 (10,156) 1,902 (824)
Other (income) expense:
Interest expense - net 690 41 0 0
Other - net 47 2 (340) 0
------- -------- ------- -----
Income (loss) before income taxes 100 (10,199) 2,242 (824)
Provision for income taxes 33 398 733 (313)
------- -------- ------- -----
Net income (loss) 67 (10,597) 1,509 (511)
------- -------- ------- -----
Preferred and Series A stock dividends 216 0 0 0
Net income (loss) to common stockholders $ (149) $(10,597) $ 1,509 $(511)
======= ======== ======= =====
Net income (loss) per share: $ (2.05)
Weighed average number of common
and common equivalent shares outstanding 5,158
Number of common shares outstanding
at March 31, 1996 10,903
Net income (loss) per common share
outstanding at March 31, 1996 $ (0.97)
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
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<PAGE> 5
<TABLE>
CHIREX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIOD
ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
(in thousands)
1996 1995
---- ----
Sterling
ChiRex Inc. Organics SepraChem
Limited Inc.
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) to common stockholders $(10,597) $ 1,512 $ (511)
Add back: Depreciation & amortization 443 2,132 37
Goodwill 60 0 0
Amortization of fixed asset uplift 19 0 0
Inventory uplift release 275 0 0
Write-off of in-process research
and development 5,790 0 0
Compensation related to stock plan 5,286 0 0
Changes in assets and liabilities (net of acquisition
of Crossco):
Receivables (1,636) (3,916) (31)
Inventories 788 908 18
Other current assets (164) 16 (304)
Accounts payable and accrued liabilities 195 4,608 0
Income taxes payable 241 735 (313)
Other noncurrent assets and liabilities 16 290 0
-------- ------- ------
Net cash provided from operations 716 6,285 (1,104)
Cash flows from investing activities:
Capital expenditures (261) (3,189) 0
Acquisition of Crossco (net of cash acquired) (32,135) 0 0
-------- ------- ------
Net cash (used in) investing activities (32,396) (3,189) 0
Cash flows from financing activities:
Increase (decrease) in short-term debt 0 (622) 1,104
Long-term debt activity (including
current portion):
Borrowings 11,475 0 0
Repayments (53,598) 0 0
Proceeds from the issuance of common stock 79,988 0 0
-------- ------- ------
Net cash provided from financing activities 37,865 0 1,104
Effect of exchange rate changes on cash 62 0 0
Net increase in cash 6,247 2,474 0
Cash at beginning of period 1 0 0
-------- ------- ------
Cash at end of period $ 6,248 $ 2,474 $ 0
======== ======= ======
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
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<PAGE> 6
CHIREX INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Basis of presentation
The accompanying interim consolidated financial statements are unaudited
and have been prepared on a basis substantially consistent with audited
financial statements.
The consolidated interim financial statements, in the opinion of
management, reflect all adjustments (including normal recurring adjustments)
necessary for a fair presentation of the results for the interim period ended
March 31, 1996. The results of operations for the interim period are not
necessarily indicative of the results of operations expected for the fiscal
year.
On March 11, 1996 the Company completed the sale of 6,675,000 shares of its
Common Stock, $0.01 par value per share, pursuant to an underwritten public
offering (the "Offering"). Immediately prior to the Offering, the share capital
of Crossco (157) Limited ("Crossco"), a private company incorporated in England
and Wales and the sole shareholder of Sterling Organics Limited ("Sterling
Organics") was recapitalized. Concurrently with the closing of the Offering, the
shareholders of Crossco contributed to the Company all of the outstanding newly
recapitalized equity share capital of Crossco in exchange for Common Stock and
promissory notes of the Company. As part of this contribution all loan stock of
Crossco was exchanged for promissory notes in the Company. As a result of these
transactions (the "Crossco Acquisition") the Company holds all of the
outstanding share capital of Crossco, which in turn holds all the outstanding
share capital of Sterling Organics. Certain shares held by the original
shareholders of Crossco were redeemed by the Company concurrently with, and with
the proceeds from, the Offering. In addition, concurrently with the Offering and
in return for 3,489,301 shares of ChiRex Common Stock, Sepracor Inc.
("Sepracor") contributed SepraChem Inc. ("SepraChem") to the Company through a
merger of a newly formed and wholly owned subsidiary of the Company with and
into SepraChem.
<TABLE>
The acquisition of Crossco by the Company was accounted for using the
Purchase Method of business combinations, and accordingly gave rise to goodwill
to be amortized over 25 years. The calculation of goodwill after the fair
valuation of assets is detailed below, along with the annual amortization
charges to be incurred as a result. Inventory represents the adjustment to fair
value of inventory held by Sterling Organics and will increase the charge to
Cost of Goods Sold over the period that the inventory turns.
<CAPTION>
Charge Balance
to at
Acquisition Annual March 31, March 31,
(in thousands) Value Amortization 1996 1996
----------- ------------ --------- ---------
<S> <C> <C> <C> <C>
Goodwill $28,904 $1,156 $ 60 $28,844
Purchase of in-process 5,325 5,325
research and development
Inventory 1,792 275 1,517
Deferred tax on inventory (591) (91) (500)
Land 1,146 1,146
Plant and equipment 14,237 574 31 14,206
(depreciated at 7.5% annually,
straight line)
Deferred tax on plant and (2,525) (189) (12) (2,513)
equipment ------- ------ ----- -------
$48,288 $1,541 $5,588 $42,700
======= ====== ====== =======
</TABLE>
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<PAGE> 7
<TABLE>
The excess purchase price is computed as follows (in thousands of U.S. Dollars):
<S> <C>
Aggregate purchase price (issuance of 3,739,206 shares of
ChiRex Common Stock at $13.00 per share) $48,610
Net book value of Crossco (consolidated with Sterling Organics)
at March 11, 1996 322
-------
Excess Purchase Price $48,288
=======
</TABLE>
Due to the recent completion of the above transactions and lack of historical
information for comparison purposes, management regards the most meaningful
presentation of the consolidated financial statements as follows:
The consolidated balance sheet for the interim period ending March 31, 1996 is
shown with both the Crossco and SepraChem balance sheets for the period ending
December 31, 1995.
The consolidated statements of operations for the interim period ending March
31, 1996 is shown with the consolidated statements of operations of Sterling
Organics and SepraChem for the corresponding interim period of the previous
year. In addition, and for completeness, the consolidated operating statement of
Crossco for the period from January 1, 1996 to the time of acquisition is
shown.
The consolidated statements of cash flows for the interim period ending March
31, 1996 is shown with the consolidated statements of cash flow for Sterling
Organics and SepraChem for the corresponding interim period of the previous
year.
Net loss per common share is computed based upon the weighted average number of
common and common equivalent shares. Common equivalent shares are not included
in the per share calculations where the effect of their inclusion would be
anti-dilutive, except that, in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 83, all common and common equivalent
shares issued during the twelve-month period prior to the effective date of the
Offering have been included in the calculation as if they were outstanding for
all periods prior to the Offering, using a price of $12.25 per share.
2. Inventories
<TABLE>
Inventories consist of the following
<CAPTION>
(in thousands) ChiRex Inc. Crossco (157) Limited SepraChem Inc.
March 31, 1996 December 31, 1995 December 31, 1995
-------------- ----------------- -----------------
<S> <C> <C> <C>
Raw materials $ 1,560 $ 1,792 $ 46
Work in progress 5,367 5,024 0
Finished goods 8,913 8,704 147
Stores and replacement parts 3,190 3,027 0
------- ------- ----
$19,030 $18,547 $193
======= ======= ====
</TABLE>
-7-
<PAGE> 8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULT OF OPERATIONS
OVERVIEW
The company is a newly formed corporation that is a combination of Crossco (157)
Limited (including subsidiary Sterling Organics Limited), a fine chemicals
manufacturer, and SepraChem, a chiral chemistry business. The Company is
undertaking a new business strategy designed to take advantage of this
combination by leveraging its proprietary technology and manufacturing
capabilities.
On March 11, 1996, ChiRex placed 6.675 million common shares in an Initial
Public Offering and used the proceeds, among other things, to reduce outstanding
debt by $25.4 million and to redeem the entire issue of $13.5 million 5%
preferred stock.
ChiRex Inc. specializes in the development, manufacture and marketing of
pharmaceutical fine chemicals and, through its joint venture, InNova
Pharmaceuticals, formulated generic drugs. ChiRex currently produces over 50
pharmaceutical chemicals in its world-class cGMP manufacturing facilities and
has a product development pipeline of more than 15 products using its patented
ChiRedox process technologies.
RESULTS OF OPERATIONS
Three months ended March 31, 1996 and 1995.
Net income (loss) to common stockholders on a pro forma basis declined from $1.0
million for the first quarter of 1995 to ($10.7 million) for the first quarter
of 1996 reflecting the effect of one-time write-offs. Excluding write-offs, the
net income for the first quarter of 1996 is $600,000.
<TABLE>
The operating results on a pro forma basis are shown in the following table:
<CAPTION>
Three months ended March 31,
----------------------------
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Net Revenues $27,811 $24,249
Operating Expenses:
Cost of goods sold 19,576 21,286
Research and development 620 717
Selling, general and administrative 858 1,168
Purchase of in-process research and development 5,790 0
Compensation related to stock plans 5,286 0
------- ------
Total operating expenses 32,130 23,171
Operating profit (loss) (9,319) 1,078
Other (income) expense:
Interest expense--net 731 0
Other--net 49 (340)
------- ------
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Income (loss) before income taxes $(10,099) $1,418
Provision for income taxes 431 420
Net income (loss) (10,530) 998
Preferred and Series A stock dividends 216 0
-------- ------
Net income (loss) to common stockholders $(10,746) $ 998
-------- ------
</TABLE>
Revenues. Net revenues for the three months ended March 31, 1996 were $22.8
million, a reduction of 6% compared to the $24.2 million in the first quarter
1995. The decline in revenues reflects selected elimination of low-margin
customer supply arrangements consistent with management's previously
communicated plan.
Cost of Goods Sold. Cost of goods sold as a percentage of sales for the first
quarter 1996 was 85.8%, a reduction from the 87.8% in the first quarter 1995.
This was a result of the elimination of high-cost, low-margin products.
Research & Development Expenses. Research and development expenses were $620,000
for the first quarter 1996, a 13% decrease compared to the $717,000 for the
first quarter 1995. The major reason for the decrease is the lower charge from
Sepracor as the Company begins to conduct research and development in-house.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $798,000 in the first quarter 1996, a 32% decrease
compared to the $1.2 million in the first quarter 1995. 1995 included legal
expenses of $202,000 and a corporate allocation of $170,000 which were not
repeated in 1996. The 1996 charge also includes goodwill amortization of $60,000
related to the recorded goodwill of $28.8 million to be amortized over
twenty-five years.
Write-off of In-process Development. 1996 includes a one-time non-cash
write-off of $5.8 million of which $5.3 million is for the purchase of
in-process research and development representing Crossco's ongoing research and
development projects which have not yet resulted in commercially viable
products. $465,000 relates to research and development expenditure at
SepraChem Canada which has also not yet resulted in commercially viable
products.
Compensation Related to Stock Plans. The Company has recorded a non-cash,
nonrecurring compensation charge of $5.3 million representing the aggregate
difference between the $1.48 exercise price and the offering price of $13.00
per share of 458,821 stock options converted from SepraChem stock options on
March 11, 1996.
Interest Expense. Interest expense of $731,000 in first quarter 1996 compared to
$0 in first quarter 1995 is a result of interest paid on bank loans as well as
interest on loan stock which was redeemed on March 11, 1996.
Other--net. Other--net of $149,000 in first quarter 1996 generally relates to
loss on disposal of fixed assets, contractual arbitration costs and audit fees.
The income of $340,000 in first quarter 1995 relates to one-time compensation
from a customer for canceled contract.
Income Tax Expense. Income tax expense of $431,000 in the first quarter 1996
shows consistently an effective tax rate of 33% in the U.K. and 38% in the U.S.
excluding the nonrecurring items compared to $420,000 for the first quarter
1995, also at 33% and 38%, respectively.
Preferred and Series A Stock Dividend. First quarter 1996 includes $127,000
related to dividend on 5% preference shares and $89,000 related to a 5%
participating dividend on Series A shares. These shares were redeemed on March
11, 1996, and no future dividends will be paid on these shares.
-9-
<PAGE> 10
Net Income (Loss) to Common Stockholders. As a result of factors described
above, net income (loss) to common stockholders was ($10.7 million) loss for the
first quarter 1996 as compared to $1.0 million for the first quarter 1995.
CERTAIN FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
The Company is a newly formed combination of SepraChem Inc. ("SepraChem")
and Sterling Organics Limited ("Sterling Organics") and, as such, has very
little operating history as a combined entity. There can be no assurance that
the integration of SepraChem and Sterling Organics can be accomplished
successfully or on a timely basis or that the Company's business strategy can be
successfully implemented.
The Company's revenues are dependent upon the continuing operation of the
Company's only manufacturing facility, located in Dudley, England. In addition,
the Company has not yet manufactured any products at its Dudley facility using
the proprietary technology of SepraChem. There can be no assurance that
manufacturing problems will not arise as the Company begins manufacturing such
products at the Dudley facility or that manufacturing can be scaled-up in a
timely manner to allow production in sufficient quantities to meet the needs of
the Company's customers.
The Company's largest customers account for a significant percentage of its
revenues. In 1995, Sanofi S.A. and its subsidiaries ("Sanofi"), SmithKline
Beecham PLC ("SmithKline Beecham") and Rohm and Haas Company accounted for 34%,
21% and 14%, respectively, of
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<PAGE> 11
the Company's total pro forma revenues. The Company expects to continue to rely
on a limited number of customers for a significant portion of its revenues.
Also, many of the Company's supply agreements, including those with certain of
its largest customers, are for a limited duration and will expire over the next
few years, and certain supply arrangements are with sole source suppliers.
InNova Pharmaceuticals SRL ("InNova"), a fifty percent owned joint
venture, has a very limited operating history and has not yet manufactured
paclitaxel or any other generic drug product. InNova expects to encounter
intense competition in the generic drug market, including the paclitaxel market,
and such competition could require price reductions or increased spending on
research and development and marketing and sales, any of which could materially
adversely affect the results of operations of InNova, or could render the
products or technologies of InNova obsolete or noncompetitive.
Acetaminophen (paracetamol), an OTC analgesic, is the largest volume
product manufactured by the Company, representing approximately 34% of the
Company's 1995 pro forma revenues. Substantially all of the acetaminophen sold
by the Company is supplied under contracts with SmithKline Beecham and Sanofi
that initially expire in 1998 and 2001, respectively. The Company is examining
strategic alternatives with respect to its acetaminophen business, including the
possible disposition of the business and alternative lower-cost raw materials
sourcing.
The successful implementation of the Company's business strategy will
depend in large part on the commercial viability of new pharmaceutical products
being developed by its customers, and the ability of such pharmaceutical
companies to conduct clinical trials, obtain required regulatory approvals and
successfully market such products. There can be no assurance that product
development efforts will be successful, that required regulatory approvals can
be obtained on a timely basis, if at all, that products can be manufactured at
acceptable cost and with appropriate quality or that any products, if approved,
can be successfully marketed.
The Company encounters, and expects to continue to encounter, intense
competition in obtaining contracts for the sale of its products from major
chemical and pharmaceutical companies (including a number of the Company's
customers) that have substantially greater financial resources, technical skills
and marketing experience than the Company. There can be no assurance that the
Company will, in the future, be successful in obtaining customer contracts on
commercially favorable terms, if at all.
The Company is subject to laws and regulations governing the use,
manufacture, storage, handling and disposal of hazardous materials and certain
waste products in both the United States and the United Kingdom. The Company
may, in the future, be required to incur significant costs to comply with
current and future environmental laws and regulations.
The Company's research, development and clinical programs, as well as the
operations of its third-party manufacturers and the marketing operations of its
corporate partners, are subject to extensive regulation by numerous governmental
authorities in the United States, the United Kingdom and other countries. There
can be no assurance that the
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<PAGE> 12
Company will be able to obtain all necessary permits or renew all existing
permits, or that material changes in permit conditions will not be imposed.
A substantial portion of the Company's operations are conducted outside the
United States. As a result of its international operations, the Company is
subject to risks associated with operating in foreign countries, including
devaluations and fluctuations in currency exchange rates, trade barriers,
political risks, hyperinflation and increases of trade or regulatory
restrictions by foreign governments. Because a majority of the Company's current
sales and operating expenses are denominated in Pounds Sterling, the Company's
revenues, cash flows and earnings are directly and materially affected by
fluctuations in the exchange rate between the Pound Sterling and the U.S.
Dollar.
The Company, through SepraChem, has entered into agreements and
transactions with Sepracor Inc. ("Sepracor"), a holder of over 30% of the
Company's common stock. The Company has acquired from Sepracor an exclusive,
royalty-free perpetual right and license to use and practice certain
technologies on a worldwide basis in a defined field. The Company has a contract
to supply Sepracor with a single-isomer active ingredients used in all ICETM
pharmaceuticals. However, in certain circumstances, Sepracor may buy those
active ingredients from other sources or manufacture such products. Furthermore,
Sepracor may terminate certain of its agreements, with the exception of
licensing agreements, with the Company as early as six months following the
date on which its ownership of the voting stock of the Company falls below 20%.
Because of these and other factors, past financial performance should not
be considered an indication of future performance. The Company's quarterly
operating results may vary significantly, depending on factors such as the
timing of substantial orders and new product introductions by the Company or its
competitors. Investors should not use historical trends to anticipate future
results and should be aware that the trading price of the Company's common stock
may be subject to wide fluctuations in response to quarterly variations in
operating results and other factors, including those discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The net cash inflow from operations reflects the overall profitability in the
period since the acquisition of Crossco on March 11, 1996.
There was no significant movement in working capital in the period other than in
receivables which reflected an increase in sales activity since March 11, 1996.
Cash flow from financing activities shows the issuance of common stock to
acquire Crossco and pay off the original funding.
-12-
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Pursuant to a Written Consent of Stockholders in Lieu of the 1996 Annual
Meeting of Stockholders, on February 7, 1996 the 15 stockholders of the Company
on such date unanimously approved the Company's 1995 Stock Incentive Plan, 1995
Director Stock Option Plan and 1995 Employee Stock Purchase Plan.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
a. The exhibits listed in the Exhibit index filed as part of this
report are filed as part of or are included in this report.
b. The Company filed no reports on Form 8-K during the quarter for
which this report is filed.
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<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHIREX INC.
Date: May 15, 1996 By: /s/ Michael A. Griffith
--------------------------
Michael A. Griffith
Vice President-Finance
Treasurer and Chief
Financial Officer
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<PAGE> 15
EXHIBIT INDEX
Exhibit Number Description
- - -------------- -----------
10.9 Technology Transfer and License Agreement by and
between SepraChem Inc. and Sepracor Inc., dated as of
January 1, 1995, as amended.
11 Computation of Income per Common Share
27 Financial Data Schedule
-15-
<PAGE> 1
EXHIBIT 10.9
TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
THIS TECHNOLOGY TRANSFER AND LICENSE AGREEMENT is effective as of January
1, 1995 by and between SEPRACOR INC. ("SI"), a Delaware corporation which has
offices at 33 Locke Drive, Marlborough, Massachusetts and SEPRACHEM INC.
("SCI"), a Delaware corporation which has offices at 33 Locke Drive,
Marlborough, Massachusetts.
WHEREAS, SI possesses certain intellectual and industrial property rights;
and
WHEREAS, SI is willing to grant, and SCI desires to acquire, exclusive
rights to use such rights on a worldwide basis in accordance with the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual promises, terms
and conditions hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties do
hereby agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following definitions.
1.1 COMBINATORIAL CHEMISTRY LIBRARIES. "Combinatorial Chemistry Libraries"
shall mean any group of 25 or more compounds related in structure and
synthesized contemporaneously from a common intermediate in quantities of no
more than one hundred grams per compound.
1.2 CONFIDENTIAL INFORMATION. "Confidential Information" shall mean: (a)
all non-public Licensed Technology of SI either disclosed to SCI or otherwise
acquired by SCI pursuant to this Agreement; or (b) Improvements discovered,
developed or acquired by SCI and disclosed to SI.
1.3 EFFECTIVE DATE. "Effective Date" shall mean January 1, 1995.
1.4 FORCE MAJEURE. "Force Majeure" shall mean any act of God, any accident,
explosion, fire, storm, earthquake, flood, drought, peril of the sea, riot,
embargo, war or foreign, federal, state, provincial or municipal order of
general application, seizure, requisition or allocation, any failure or delay of
transportation, shortage of or inability to obtain supplies, equipment, fuel or
labor, or any other circumstances or event
<PAGE> 2
beyond the reasonable control of the party relying upon such circumstance or
event.
1.5 IMPROVEMENT. "Improvement" shall mean any improvement or enhancement to
the Licensed Technology that is discovered, developed or otherwise acquired by
SI or SCI prior to the termination or expiration of this Agreement, whether
patentable or not; PROVIDED, HOWEVER, that if an Improvement has been acquired
from a third party, such Improvement shall be included in this definition only
to the extent that such third party has granted rights to sublicense or
otherwise extend the right to use such Improvement. Improvements shall not
include rights to compounds made using the Licensed Technology unless such
compounds are useful in practicing the Licensed Technology.
1.6 LICENSED TECHNOLOGY. "Licensed Technology" shall mean public and
nonpublic technical or other information, trade secrets, know-how, processes,
formulations, concepts, ideas, preclinical, clinical, pharmacological or other
data and testing results, experimental methods or results, descriptions,
business or scientific plans, depictions, customer lists and any other written,
printed or electronically stored materials, and any and all other intellectual
property, including patents or patent applications owned or controlled by SI as
of the Effective Date (including, but not limited to, the Patent Rights, the
Technical Information and other rights (i) created by agreements between SI and
third parties which are listed and described in EXHIBIT A attached hereto and
incorporated herein by reference and (ii) for which a co-equal ownership right
and interest is assigned to SCI pursuant to Section 4.3 below), that relates to
and is used in researching, developing or manufacturing Products. "Owned or
controlled" shall include only rights which SI owns, or under which SI is
licensed and has the right to extend the right to use to SCI.
1.7 PATENT RIGHTS. "Patent Rights" shall mean (a) the issued patents and
patent applications listed in EXHIBIT B attached hereto and incorporated herein
by reference and any nonUnited States counterpart thereof, (b) any patent
application constituting an equivalent, counterpart, reissue, extension or
continuation (including, without limitation, a continuation in part or a
division) of any of the foregoing applications, and (c) any patent issued or
issuing upon any of the foregoing applications.
1.8 PRODUCTS. "Products" shall mean any and all products in the SCI Field.
1.9 SCI FIELD. "SCI Field" shall mean the development, manufacture, use and
sale of any and all pharmaceutical intermediates, active ingredients,
agrichemicals, flavours, fragrances and other chemicals and compounds, except
that this field shall not include (i) the right to develop, make, use and sell
those compounds included in EXHIBIT C-1 attached hereto and
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incorporated herein by reference; (ii) the right to develop, make, use and sell
Combinatorial Chemistry Libraries of chiral or achiral compounds; or (iii) the
right to develop, make, use and sell compounds in the Combinatorial Chemistry
Libraries in quantities of less than one (1) kilogram. Compounds described in
part (iv) of EXHIBIT C-2 attached hereto and made a part hereof shall be
included in this field, but only on a non-exclusive basis.
1.10 TANABE AGREEMENT. "Tanabe Agreement" shall mean the license
anddevelopment agreement between SI and Tanabe Seiyaku Co., Ltd. dated October
30, 1990, as it may have been supplemented and amended from time to time prior
to the Effective Date.
1.11 TECHNICAL INFORMATION. "Technical Information" shall mean all trade
secrets, know-how, computer programs (including copyrights in said software),
knowledge, technology, means, methods, processes, practices, formulas,
techniques, procedures, technical assistance, designs, drawings, apparatus,
written and oral rectifications of data, specifications, assembly procedures,
schematics and other valuable information of whatever nature, whether
confidential or not, and whether proprietary or not, which is now in (or
hereafter, during the term of this Agreement, comes into) the possession of SI
and which is relevant to the development, manufacture, use or sale of Products.
2. GRANT OF RIGHTS AND LICENSES
Subject to all of the terms and conditions set forth in this Agreement:
2.1 Use of Licensed Technology
--------------------------
(a) SI hereby grants to SCI an exclusive, royalty-free perpetual right
and license to use and practice the Licensed Technology on a world-wide basis
in order to develop, manufacture, use and sell Products and for no other
purpose; PROVIDED, HOWEVER, that: (i) SI shall retain the right to use the
Licensed Technology to manufacture pharmaceutical fine chemical intermediates
and pharmaceutical active ingredients for the clinical and laboratory use of
SI and its licensees; (ii) the right and license granted to SCI under this
Section 2.1(a) shall not include the exclusive right and license granted by SI
to third parties prior to the Effective Date pursuant to any of the agreements
listed in EXHIBIT D attached hereto and incorporated herein by reference, but
shall include rights and licenses granted by such third parties back to SI
pursuant to such agreements before, on and after the Effective Date; and (iii)
SI shall, as described in Section 4.3 below, retain a co-equal ownership right
and interest in all of SI's rights and obligations under the Tanabe Agreement.
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(b) SI hereby also grants to SCI a non-exclusive, royalty-free right
and license to use and practice the Licensed Technology on a world-wide basis
in order to develop, manufacture, use and sell compounds included in parts (i)
and (iv) of Exhibit C-2 hereto for the periods of time described in Exhibit C-2
hereto.
(c) From time to time upon the request of SCI, SI shall provide to
SCI, at no additional cost to SCI, all of the Technical Information within
thirty (30) days of receiving SCI's written request, so long as there is no
agreement between SI and a third party as of the Effective Date which limits
SI's ability to provide such information to SCI. In addition, all patent or
other searches and prior art in the possession of SI with respect to the Patent
Rights shall be provided to SCI at its request.
2.2 RIGHT TO SUBLICENSE OR ASSIGN. SCI shall have the right to sublicense
or assign any of the rights and licenses granted hereunder, so long as each
sublicense or assignee agrees to be bound by all of the terms and conditions
contained in this Agreement.
2.3 NO RIGHTS BY IMPLICATION. No rights or licenses with respect to
Licensed Technology are granted or deemed granted hereunder or in connection
herewith, other than those rights or licenses expressly granted in this
Agreement.
2.4 Sharing of Improvements.
-----------------------
(a) Each party agrees to notify the other party of each Improvement it
has discovered, developed or acquired. The discovering, developing or acquiring
party (the "developing party") shall upon request of the other party deliver
data and specifications to the other party concerning such Improvement.
(b) If such Improvement is discovered, developed or acquired by SI,
then SCI shall have an exclusive, royalty-free perpetual right and license to
use and practice such Improvement on a world-wide basis in order to develop,
manufacture, use and sell Products and for no other purpose. Such Improvement
shall be deemed to be included in the definition of "Licensed Technology" for
all purposes.
(c) If such Improvement is discovered, developed or acquired by SCI,
then SI shall have an exclusive, royalty-free perpetual right and license
(including the right to grant sublicenses) to use and practice such Improvement
on a world-wide basis in order to develop, manufacture, use and sell all
products outside the SCI Field and for no other purpose.
(d) If such Improvement is discovered, developed or acquired jointly
by SI and SCI, then such Improvement shall be considered jointly owned by SI
and SCI. SCI agrees not to use or
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license such Improvement outside the SCI Field and SI agrees not to use or
license such Improvement in the SCI Field.
3. TECHNICAL ASSISTANCE AND INSTRUCTION.
3.1 PROVIDED BY SI. Upon request, SI shall provide to SCI reasonable
technical assistance and instruction, at SCI's sole expense (such expense to be
approved in advance and in writing by SCI), in understanding, interpreting and
applying the Licensed Technology for the purpose of commercially developing
Products. SI shall make its employees reasonably available for consultation by
telephone, or in person, at the offices at SI, in connection with such
assistance and instruction, all at the sole expense of SCI (such expense to be
approved in advance and in writing by SCI), in accordance with the terms and
provisions to be agreed upon in writing by SI and SCI.
3.2 PROVIDED BY SCI. Upon request, SCI shall provide to SI reasonable
technicalassistance and instruction, at SI's sole expense (such expense to be
approved in advance and in writing by SI), in understanding, interpreting and
applying the Improvements discovered, developed or acquired by SCI for the
purpose of commercially developing products outside the SCI Field. SCI shall
make its employees reasonably available for consultation by telephone, or in
person, at the offices at SCI, in connection with such assistance and
instruction, all at the sole expense of SI (such expense to be approved in
advance and in writing by SI), in accordance with the terms and provisions to be
agreed upon in writing by SI and SCI.
3.3 VISITORS. Each party shall maintain adequate comprehensive general
liability insurance with waivers of subrogation, covering employees and
representatives of the other party visiting the facilities or using the
equipment or handling the products of the insured party. Employees and
representatives of either party visiting the facilities of the other party shall
be required to observe the rules and regulations of the facilities being
visited. Each party agrees to hold the other party harmless from any
responsibility for injuries to or the death of its employees or representatives
while visiting the other party's facilities or damage to the other party's
property, except in cases of gross negligence or intentional tortious acts
and/or actions insured against, provided that all claims hereunder are brought
within six (6) months after the incident(s) giving rise to such claims.
4. INVENTIONS AND THIRD PARTY LICENSES
4.1 Registering Patents and Other Intellectual Property Rights.
----------------------------------------------------------
(a) SI shall have the exclusive right to prepare, prosecute and
maintain patent applications and other intellectual property registrations, and
to maintain and enforce patents and
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rights issued thereon, with respect to the Licensed Technology and to any
Improvements discovered, developed or otherwise acquired by SI. Any costs
reasonably incurred by SI in accordance with this Section 4.1(a) shall be
borne 70% by SCI and 30% by SI. SCI shall pay SI's invoices to SCI for such
costs within thirty (30) days of SCI's receipt thereof. If SI decides not
to exercise its exclusive right described in this Section 4.1(a), SI shall
so notify SCI in writing and SCI shall then have right to prepare,
prosecute and maintain patent applications and other intellectual property
registrations, and to maintain and enforce patents and rights issued
thereon, with respect to the Licensed Technology and to any Improvements
discovered, developed or otherwise acquired by SI, all at SCI's expense.
(b) SCI shall have the exclusive right to prepare, prosecute and
maintain patent applications and other intellectual property registrations,
and to maintain and enforce patents and rights issued thereon, with respect
to any Improvements discovered, developed or otherwise acquired by SCI. Any
costs reasonably incurred by SCI in accordance with this Section 4.1(b)
shall be borne 100% by SCI. If SCI decides not to exercise its exclusive
right described in this Section 4.1(b), SCI shall so notify SI in writing
and SI shall then have right to prepare, prosecute and maintain patent
applications and other intellectual property registrations, and to maintain
and enforce patents and rights issued thereon, with respect to any
Improvementsdiscovered, developed or otherwise acquired by SCI, all at SI's
expense.
(c) With respect to any Improvements discovered, developed or
otherwise acquired jointly by SI and SCI, SI shall have the exclusive right
to prepare, prosecute and maintain patent applications and other
intellectual property registrations, and to maintain and enforce patents
and rights issued thereon. Any costs incurred by SI in accordance with this
Section 4.1(c) shall be borne 50% by SI and 50% by SCI. SCI shall pay SI's
invoices to SI for such costs within thirty (30) days of SCI's receipt
thereof.
4.2 Third Party Licenses.
--------------------
(a) To the extent that any part of the Licensed Technology consists of
rights of SI under an agreement or license with or from a third party,
SCI's right to use such part of the Licensed Technology hereunder shall be
limited to the rights which SI has a right to grant or extend under such
agreement or license and otherwise subject to any obligations assumed by SI
in consideration of the grant or assignment of such right or license to SI
which is to be extended to SCI, including the payment to SI (or such other
party as SI may direct) of royalties which SI may owe to such third party
based on SCI's development, manufacture, use or sale of the Products. All
fixed maintenance costs of SI under such agreements shall be borne 70% by
SCI and 30% by SI. SCI shall pay SI's invoices to SCI for such costs within
thirty (30) days of SCI's receipt thereof.
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(b) All such agreements with third parties which were executed by SI
on or before the Effective Date are listed on EXHIBIT A hereto and have been
provided in full to SCI prior to the Effective Date.
(c) To the extent that any Improvements discovered, developed or
acquired by SCI consist of rights of SCI under an agreement or license with or
from a third party, any assignment or license granted to SI hereunder shall be
limited to the rights which SCI has a right to grant under such agreement or
license and otherwise subject to any obligations assumed by SCI in consideration
of the grant or assignment of such right or license to SCI which is to be
sublicensed to SI, including the payment of royalties or other fees to such
third party.
4.3 Assignment of Interest in Rights Licensed Under Tanabe Agreement.
----------------------------------------------------------------
(a) SI hereby assigns to SCI a co-equal ownership right and interest
in all of SI's rights and obligations under the Tanabe Agreement.
(b) The parties have agreed that: (i) the revenue from the Tanabe
Agreement, as well as the reasonable costs incurred by SI in connection with the
Tanabe Agreement (to the extent that such costs are reasonable and documented),
shall be prior to January 1, 1996 directed to SI and thereafter shall be divided
50% to SCI and 50% to SI; (ii) after January 1, 1996, each party shall pay the
other party's invoices for its share of such expenses within thirty (30) days
ofits receipt thereof; and (iii) after January 1, 1996, each party shall remit
to the other party 50% of the revenues which it receives from the Tanabe
Agreement within thirty (30) days of its receipt thereof.
5. CONFIDENTIAL INFORMATION, NON-COMPETITION AND NON-SOLICITATION
5.1 CONFIDENTIALITY MAINTAINED. Each party agrees that the other party
hereto has a proprietary interest in its Confidential Information. During and
after the term of this Agreement, all disclosures of Confidential Information to
the receiving party, its agents and employees shall be held in strict confidence
by such receiving party, which shall disclose the Confidential Information only
to those of its agents and employees to whom it is necessary in order to
properly carry out their duties as limited by the terms and conditions hereof.
During and after the term of this Agreement, the receiving party shall not use
the Confidential Information except for the purposes of exercising its rights
and carrying out its duties hereunder. The provision of this Section 5.1 shall
also apply to any sublicensees, consultants or subcontractors during and after
the term of this Agreement, that the receiving party may sublicense or engage in
connection with this Agreement.
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5.2 PERMITTED DISCLOSURES. Notwithstanding the provisions of Section 5.1
above, SI and SCI may, to the extent necessary, disclose and use Confidential
Information, consistent with the rights of SI and SCI otherwise granted
hereunder, for the purpose of: (a) engaging in research and development,
conducting clinical testing and marketing programs, or securing institutional or
government approval to clinically test or market any product; (b) subject to
confidentiality agreements typically executed in the industry under comparable
circumstances, sharing clinical trial results and data with third parties
conducting clinical trials on products; or (c) securing patent or other
intellectual property protection for an invention.
5.3 LIABILITY FOR DISCLOSURE. Notwithstanding anything contained in this
Agreement to the contrary, neither party shall be liable for a disclosure of the
other party's Confidential Information if the information so disclosed:
(a) was in the public domain without violation of the rights of the
non-disclosing party at the time it was disclosed by the disclosing party
to the receiving party; or
(b) was known to or contained in the records of the receiving party
from a source with rights thereto not in violation of the rights of the
non-disclosing party at the time of disclosure by the disclosing party to
the receiving party and can be so demonstrated; or
(c) becomes known to the receiving party from a source other than the
disclosing party without breach of this Agreement by the receiving party
and can be so demonstrated; or
(d) was required to be disclosed under legal or administrative
process, PROVIDED that the disclosing party has given the non-disclosing
party no less than ten (10) days prior written notice of the disclosing
party's intention to make a disclosure pursuant to this Section 5.3.
6. LITIGATION
6.1 NOTIFICATION OF SUIT. Each party shall give the other party prompt
written notice of any suit, action or written claim involving the Licensed
Technology, and in any event no more than thirty (30) days after acquiring such
knowledge or prior to the expiration of time in which a response must be filed
with a court or other judicial body, whichever is first to occur.
6.2 Prosecution of Infringements.
----------------------------
(a) If SCI discovers an infringement of the Licensed Technology by a
third party, it shall give SI prompt notice thereof and shall take no other
action against the alleged infringer without the prior written consent of
SI. SCI agrees to cooperate with SI, at no out-of-pocket expense to SCI, in
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connection with any action taken by SI to prosecute such infringements. Any
recovery of damages or attorneys fees in infringements actions, or amounts
received at settlement thereof, shall be applied first to reimburse the parties
for their expenses incurred in connection with such actions, and thereafter
shall be divided as follows: (i) if the infringement is described in Section 9.3
of the Tanabe Agreement, 50% to SCI and 50% to SI; and (ii) for all other
infringements, (A) if such infringement occurred outside the SCI Field, 100% to
SI; and (B) if such infringement occurred inside the SCI Field, 70% to SCI and
30% to SI.
(b) SI shall have no obligation to institute suit or take action
against any infringer. In the event that SI declines to take such action for any
reason, SCI shall have the right, but not the obligation, to take such action if
the infringement is in the SCI Field, but shall promptly advise SI of any
counterclaims brought by the alleged infringer and give SI an opportunity to
defend against such counterclaims. In the event of any such counterclaims, SCI
shall not enter into settlement with the alleged infringer without the prior
written consent of SI, which shall not be unreasonably withheld.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
Each of SI and SCI hereby represents, warrants and covenants to the other,
as of the date that it executed this Agreement, as follows:
7.1 RIGHT, POWER AND AUTHORITY. It has full right, power and authority to
enter into this Agreement and there is nothing which would prevent it from
performing its obligations under the terms and conditions imposed on it by this
Agreement.
7.2 BINDING OBLIGATION. This Agreement has been duly authorized by all
necessary corporate action of SI and SCI, respectively, and constitutes a valid
and binding obligation on SI and SCI, respectively, enforceable in accordance
with the terms hereof, except as to applicable bankruptcy, reorganization
insolvency, moratorium and similar laws affecting the rights of creditors
generally and the discretion of courts in awarding equitable relief.
7.3 NO GOVERNMENT APPROVALS NEEDED. No registration with or approval of any
government agency or commission of any jurisdiction is necessary for the
execution, delivery or performance by it of any of the terms of this Agreement,
or for the validity and enforceability hereof or with respect to its obligations
hereunder.
7.4 NO PROVISIONS CONTRAVENED. There is no provision in its certificates of
incorporation or By-Laws, and no provision in any existing mortgage, indenture,
contract or agreement binding on it,
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which would be contravened by the execution, delivery or performance by it of
this Agreement.
7.5 NO CONSENT OF THIRD PARTIES NEEDED. No consent of any trustee or holder
of any of its indebtedness or any other third party is or shall be required as a
condition to the validity of this Agreement.
7.6 NO PROCEEDINGS PENDING. There is no action or proceeding pending or in
so far as it knows threatened in writing against it before any court,
administrative agency or other tribunal which might have a material adverse
effect on its ability to perform its obligations hereunder. Neither party knows
of any claim by any third party of infringement by the Licensed Technology on
such third party's patent, copyright or other intellectual property rights
(other than allegations made by Andeno concerning interference with its GLOP
patents in connection with the Tanabe products) or of misappropriation of trade
secrets involving the Technical Information.
7.7 NOT CONTRAVENE ANY LAW. Neither its execution nor its delivery of this
Agreement not its fulfillment of or compliance with the terms and provisions
hereof shall contravene any provision of the laws of any jurisdiction,
including, without limitation, any statute, rule, regulation, judgment, decree,
order, franchise or permit applicable to it.
7.8 LICENSED TECHNOLOGY. SI represents and warrants to SCI that it owns, or
has the full right to use (and extend to SCI the right to use) under written
agreements, all patents, copyrights, trademarks, trade secrets and other
intellectual property rights included in the Licensed Technology.
7.9 IMPROVEMENTS. Each party has the right to perform its obligations with
respect to Improvements hereunder.
8. TERMINATION OR EXPIRATION
8.1 TERM OF AGREEMENT. The term of this Agreement shall commence on the
Effective Date and shall continue until the earlier to occur of (i) December 31,
1998; or (ii) on six months written notice from SI to SCI or from SCI to SI on
or after the date after March 1, 1996 (i) on which the ownership by SI of SCI
shall first be less than twenty percent (20%) of the outstanding voting stock of
SCI, or (ii) if SCI has been merged or consolidated into another entity, then on
which the ownership by SI of such other entity shall first be less than twenty
percent (20%) of the outstanding voting stock of such entity; PROVIDED, that any
perpetual licenses or sublicenses granted under this Agreement shall survive
such expiration or termination to the extent that they relate to the Licensed
Technology and any Improvements existing on such date of termination or
expiration. Sections 2.4(a) and (d) and Article 3 of this Agreement shall end
upon the expiration or termination of this Agreement; PROVIDED,
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HOWEVER, that if this Agreement expires or is terminated prior to January 1,
1998, Article 3 shall remain in effect until January 1, 1998 so long as the
party receiving benefits thereunder is not in default of its obligations
hereunder on such date of expiration or termination.
8.2 NO DAMAGES FOR TERMINATION. The parties hereto agree that, if SI
terminates this Agreement pursuant to Section 8.1, then SI shall not be liable
for damages or injuries suffered by SCI as a result of that termination.
9. MISCELLANEOUS
9.1 SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement
shall inure to the benefit of, and be binding upon, SI, SCI and their respective
successors and assigns. Any reference to SI and SCI hereunder shall be deemed to
include the successors thereto and assigns thereof.
9.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts applicable to
agreements made and to be fully performed therein, without regard to principles
of conflicts of law.
9.3 AMENDMENTS AND WAIVERS. No amendment, modification, waiver, termination
or discharge of any provision of this Agreement, nor consent to any departure by
SI or SCI therefrom, shall be effective unless the same shall be in writing
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by SI and SCI,
and each such amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained
by any oral agreements, course of dealing or performance or any other matter not
set forth in an agreement in writing and signed by SI and SCI.
9.4 NO OTHER RELATIONSHIP. Nothing herein contained shall be deemed to
create a joint venture, agency, partnership or employer-employee relationship
between the parties hereto. Neither party shall have any power to enter into any
contracts or commitments in the name of, oron behalf of, the other party, or to
bind the other party in any respect whatsoever.
9.5 NOTICES. All notices, requests and other communications to SI or SCI
hereunder shall be in writing (including telecopy or similar electronic
transmissions) and shall be personally delivered or sent by telecopy or other
electronic facsimile transmission during normal business hours or by registered
mail or certified mail, return receipt requested, postage prepaid, in each case
to the respective address specified below (or to such other address as may be
specified in writing to the other party hereto):
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Sepracor Inc.
33 Locke Drive
Marlborough, MA 01752
Attention: President
----------
SepraChem Inc.
33 Locke Drive
Marlborough, MA 01752
Attention: President
----------
Any notice or communication given in conformity with this Section 9.5 shall be
deemed to be effective when received by the addressee, if delivered by hand,
telecopy or other electronic facsimile transmission, and three (3) days after
mailing, if mailed.
9.6 ENTIRE UNDERSTANDING. This Agreement, together with certain other
agreements entered into between the parties in conjunction herewith on even date
herewith, including the Contract Manufacturing Agreement, Supply Agreement,
Contract Research Agreement, Registration Rights Agreement and Agreement and
Plan of Merger, constitutes, on and as of the date hereof, the entire agreement
of SI and SCI with respect to the subject matter hereof, and all prior or
contemporaneous understandings or agreements, whether written or oral, between
SI and SCI with respect to such subject matter are hereby superseded in their
entirety.
9.7 SEVERABILITY. If any provision hereof should be held invalid, illegal
or unenforceable in any respect in any jurisdiction, then, to the fullest extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the parties hereto as nearly as may be possible and (b)
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, SI and SCI hereby waive any provision of law
that would render any provision hereof prohibited or unenforceable in any
respect.
9.8 Further Assurances.
-------------------
(a) Each of SI and SCI agrees to duly execute and deliver, or cause to
be duly executed and delivered, such further instruments and do and cause
to be done such further acts and things, including, without limitation, the
filing of such additional assignments, agreements, documents and
instruments, that may be necessary or as the other party hereto may at any
time and from time to time reasonably request in connection with this
Agreement or to carry out more effectively the provisions and purposes of,
or to better assure and confirm unto such other party its rights and
remedies under, this Agreement.
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(b) Each party agrees to cause each of its employees and agents to
take all actions and to execute, acknowledge and deliver all instruments or
agreements reasonably requested by the other party, and necessary for the
perfection, maintenance, enforcement or defense of that party's rights as set
forth herein.
9.9 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part of SI or
SCI to exercise and no delay in exercising any right, power, remedy or privilege
under this Agreement, or provided by statute or at law or in equity or
otherwise, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.
9.10 FORCE MAJEURE. SI and SCI shall each be excused for any failure or
delay in performing any of its respective obligations under this Agreement,
other than its obligations to make payments to the other party, if such failure
or delay is caused by Force Majeure.
9.11 SURVIVAL OF CONTENTS. Notwithstanding anything else in this Agreement
to the contrary, the parties agree that Sections 2.1, 2.2, 2.3 and 2.4(b) and
(c) and Articles 4, 5, 6, 7, 8 and 9 shall survive the termination or expiration
of this Agreement, as the case may be, to the extent required thereby for the
full observation and performance by any or all of the parties hereto.
9.12 COMPLIANCE WITH LAWS. Each of SI and SCI covenants and agrees that all
of its activities under or pursuant to this Agreement shall comply in all
material respects with all applicable laws, rules and regulations.
9.13 HEADINGS. Headings used herein are for convenience only and shall not
in any way affect the construction of, or be taken into consideration
interpreting, this Agreement.
9.14 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
9.15 Arbitration.
-----------
(a) All disputes arising out of or relating to this Agreement shall be
finally settled by arbitration conducted in Boston under the rules of
Commercial Arbitration of the American Arbitration Association ("Rules"). The
arbitrator shall provide for the discovery of evidence by the Massachusetts
rules of civil procedure governing discovery, notwithstanding any other
provisions in such Rules. Both parties shall bear equally the
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cost of the arbitration (exclusive of legal fees and expenses, all of which
each party shall bear separately). All decisions of the arbitrator(s) shall
be final and binding on both parties and enforceable in any court of competent
jurisdiction.
(b) Notwithstanding the foregoing, in the event of breach by a party
of its obligations hereunder, the non-breaching party may seek injunctive or
other equitable relief in any court of competent jurisdiction. Each party
hereby acknowledges the unique nature of Licensed Technology . SI acknowledges
that the value of SCI's right and license to use the Licensed Technology in the
SCI Field pursuant to this Agreement rests, in large part, on the fact that
SCI's rights are exclusive in the SCI Field. Likewise, SCI acknowledges that
the value of SI's right and license to use the Licensed Technology outside the
SCI Field pursuant to this Agreement rests, in large part, on the fact that SCI
has no rights outside the SCI Field. Each party further acknowledges that
monetary damages, by themselves, would not adequately compensate the other
party in the event of breaches or violations of various terms of this Agreement
(including without limitation the restriction of SCI's rights to the SCI Field
and the restriction of SI's rights to outside the SCI Field). Therefore, in
addition to recovering monetary damages, each party shall have the right to
immediately obtain a temporary restraining order and/or injunctive relief from
any court in equity to halt or prevent breaches or violations by the other
party of its obligations under this Agreement; PROVIDED, HOWEVER, that each
party acknowledges that the other party, although it may be breaching or
violating its obligations under this Agreement, should not be enjoined from
exercising or enjoying its rights, or its reservation of rights, under this
Agreement, as the case may be.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement under
seal.
SEPRACOR INC., as Licensor
By /s/ Timothy J. Barberich
-----------------------------------
Timothy J. Barberich, President
SEPRACHEM INC., as Licensee
By /s/ Robert L. Bratzler
-----------------------------------
Robert L. Bratzler, President
-14-
<PAGE> 15
EXHIBIT A
THIRD PARTY AGREEMENTS INCLUDED IN LICENSED TECHNOLOGY
------------------------------------------------------
(1) License Agreement dated May 5, 1989 by and between
Massachusetts Institute of Technology ("MIT") and SI
(2) License Agreement dated June 21, 1991 by and between MIT and
SI
(3) Agreement between Research Corporation Technologies Inc.
("RCT") and SI dated September 10, 1992
(4) Agreement between RCT and SI dated March 6, 1991
<PAGE> 16
EXHIBIT B
---------
ISSUED PATENTS AND PATENT APPLICATIONS
--------------------------------------
<TABLE>
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
CHIRAL DIVISION
Page 1
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
0701.FAN CHIRL USA IMPROVED CHIRAL RESOLUTION OF DOXAZOSIN
UNFILED INTERMEDIATE
0701.GAO CHIRL USA OPTICALLY PURE CIS-AMINO INDANOL DERIVATIVES
DRAFT USEFUL AS LIGANDS AND CATALYSTS IN ASYMMETRIC
ORGANIC REACTIONS
0701.HEE CHIRL USA SEPARATION OF THE ISOMERS OF ALPHA-BENZYLINDOLE
DRAFT -3-ACETIC ACID BY EMZYMATIC HYDROLYSIS OF
VARIOUS ESTERS OF THE ACID
1030.001 CHIRL USA 07/966,705 5,273,895 ENANTIOSELECTIVE PRODUCTION OF CHIRAL
ISSUED 10/26/92 12/28/93 CARBOXYLIC ACIDS
1030.001 CHIRL PCT US93/10179 ENANTIOSELECTIVE PRODUCTION OF CHIRAL
PUBLISHED 10/25/93 CARBOXYLIC ACIDS
1030.001 CHIRL JAPAN 511213/94 ENANTIOSELECTIVE PRODUCTION OF CHIRAL
PENDING 04/25/95 CARBOXYLIC ACIDS
1030.001 CHIRL EPO 94 90 1190.2 ENANTIOSELECTIVE PRODUCTION OF CHIRAL
PENDING CARBOXYLIC ACIDS
1030.002 CHIRL USA 08/028.320 5,457,051 STEREOSPECIFIC HYDROLYSIS OF KETOPROFEN ESTERS
PENDING 03/09/93 10/10/95 BY BEAUVERIA BASSIANA AND ENZYMES DERIVED
THEREFROM
1030.002 CHIRL PCT US94/02505 STEREOSPECIFIC HYDROLYSIS OF KETOPROFEN ESTERS
PUBLISHED 03/08/94 BY BEAUVERIA BASSIANA AND ENZYMES DERIVED
THEREFROM
1030.002 CHIRL JAPAN 520268/94 STEROSPECIFIC HYDROLYSIS OF KETOPROFEN ESTERS BY
PENDING 09/08/95 BEAUVERIA BASSIANA AND ENZYMES DERIVED
THEREFROM
1030.003 CHIRL USA 08/036,327 IMPROVED PROCESS FOR 6-AMINOPENICILLANIC ACID
ALLOWED 03/24/93 AND FOR 7-AMINODESACETOXYCEPHALOSPORANIC ACID
</TABLE>
<PAGE> 17
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 2
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
1030.003A CHIRL USA 08/385,859 IMPROVED PROCESS FOR 6-AMINOPENICILLANIC ACID
PENDING 02/09/95 AND FOR 7-AMINODESACETOXYCEPHALOSPORANIC ACID
1030.004 CHIRL USA 08/121,340 PROCESS FOR PREPARING CYCLIC CIS-1-AMINO-2
PENDING 09/14/93 ALKANOLS
1030.004A CHIRL USA 08/278,459 PROCESS FOR PREPARING CYCLIC CIS-1-AMINO-2
PENDING 07/21/94 ALKANOLS
1030.004A CHIRL PCT US94/10098 PROCESS FOR PREPARING CYCLIC CIS-1-AMINO-
PENDING 09/09/94 2-ALKANOLS
1030.0048 CHIRL USA 08/321,998 PROCESS FOR PREPARING CYCLIC CIS-1-AMINO-2
PENDING 10/12/94 2-ALKANOLS
1030.005 CHIRL USA 08/144,577 5,324,860 PROCESS FOR 3,5,D1-TERT-BUTYLSALICYLALDEHYDE
ISSUED 10/27/93 06/28/94
1030.005 CHIRL EPO 94307744.6 PROCESS FOR 3,5,D1-TERT-BUTYLSALICYLALDEHYDE
PENDING 10/21/94
1030.005 CHIRL AUSAL 77497/94 PROCESS FOR 3,5,D1-TERT-BUTYLSALICYLALDEHYDE
PENDING 10/26/94
1030.005 CHIRL CANAD PROCESS FOR 3,5,D1-TERT-BUTYLSALICYLALDEHYDE
PENDING 10/20/94
1030.005 CHIRL JAPAN 262769/94 PROCESS FOR 3,5,D1-TERT-BUTYLSALICYLALDEHYDE
PENDING 10/26/94
1030.006 CHIRL USA 08/247,302 5,399,765 ENANTIOSELECTIVE PREPARATION OF OPTICALLY PURE
ALLOWED 05/23/94 03/21/95 ALBUTEROL WILL FILE PCT IN SINGLE CASE WITH
1030,006A.
1030.006 CHIRL PCT US95/06539 ENANTIOSELECTIVE PREPARATION OF OPTICALLY PURE
PENDING 05/23/95 ALBUTEROL WILL FILE PCT IN SINGLE CASE WITH
1030.006A.
1030.006A CHIRL USA 08/376,072 ENANTIOSELECTIVE PREPARATION OF OPTICALLY PURE
PENDING 1/20/95 ALBUTEROL WILL FILE PCT IN SINGLE CASE WITH
1030.006.
1030.007 CHIRL USA 08/231,231 5,442,118 ASYMMETRIC SYNTHESIS OF (R) - AND (S) -
ISSUED 04/22/94 08/15/95 ARYLETHANOLAMINES FROM IMMINOKETONES
1030.007 CHIRL PCT US95/04869 ASYMMETRIC SYNTHESIS OF (R)- AND (S)-
PENDING 04/20/95 ARYLETHANOLAMINES FROM IMMINOKETONES
</TABLE>
<PAGE> 18
<TABLE>
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
CHIRAL DIVISION
Page 3
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
1030.008 CHIRL USA 08/446,255 PROCESS FOR RESOLVING CHIRAL ACIDS WITH
PENDING 05/18/95 1-AMINO-2-INDANOLS
1030.009 CHIRL USA 08/475,007 OPTICAL RESOLUTION OF CHEMICAL INTERMEDIATES
PENDING 06/07/95 OF CARBOXYLIC ACIDS, CHROMANE CARBOXYLIC ACID
& DOXAZOSIN PRECURSOR
1030.010 CHIRL USA 08/250,821 TETRAHYDROINDENO (1,2-D] [1,2,1] OXAZABOROLES
ALLOWED 5/31/94 AND THEIR USE AS ENANTIOSELECTIVE CATALYSTS
1030.010 CHIRL PCT PCT/US95/0661 TETRAHYDROINDENO [1,2-D] [1,2,1] OXAZABOROLES
PENDING 05/24/95 AND THEIR USE AS ENANTIOSELECTIVE CATALYSTS
1030.010A CHIRL USA TETRAHYDROINDENO [1,2-D] [1,2,1] OXAZABOROLES
DRAFT AND THEIR USE AS ENANTIOSELECTIVE CATALYSTS
1030.011 CHIRL USA 08/477,381 OPTICAL RESOLUTION OF ALKYL 1,4-BENZODIOXAN-2-
PENDING 06/07/95 CARBOXYLATES
1030.012 CHIRL USA TAXOL PROCESS AND COMPOUNDS
PENDING 08/11/95
1030.012 CHIRL USA TAXOL PROCESS AND COMPOUNDS
PENDING 08/11/95
4821-004 CHIRL USA 07/033,962 4,800,162 METHOD FOR RESOLUTION OF STEROISOMERS IN
ISSUED 04/01/87 01/24/89 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL CANAD 563,328 1,266,248 METHOD FOR RESOLUTION OF STEROISOMERS IN
ISSUED 04/05/88 02/27/90 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL AUSAL 16814/88 P605589 METHOD FOR RESOLUTION OF STEREOISOMERS IN
ISSUED 03/31/88 03/31/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL EPO 88904053.1 METHOD FOR RESOLUTION OF STEREOISOMERS IN
ALLOWED 03/31/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821.004 CHIRL INDIA 205/MAS/88 166947 METHOD FOR RESOLUTION OF STEREOISOMERS IN
ISSUED 03/30/88 03/30/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821.004 CHIRL ISREA 85938 85938 METHOD FOR RESOLUTION OF STEREOISOMERS IN
ISSUED 03/31/88 10/10/93 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL KORSO 701515/88 METHOD FOR RESOLUTION OF STEREOISOMERS IN
PENDING 03/31/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL RUSSA 4742278.13 1825378 METHOD FOR RESOLUTION OF STEREOISOMERS IN
ISSUED 03/31/88 10/12/92 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
</TABLE>
<PAGE> 19
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 4
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
4821-004 CHIRL PCT US88/01098 METHOD FOR RESOLUTION OF STEREOISOMERS IN
PUBLISHED 03/31/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-004 CHIRL JAPAN 63-503756 METHOD FOR RESOLUTION OF STEREOISOMERS IN
PENDING 03/31/88 MULTIPHASE AND EXTRACTIVE MEMBRANE REACTORS
4821-012 CHIRL USA 06/786,764 4,795,704 METHOD AND APPARATUS FOR CATALYST CONTAIN-
ISSUED 10/11/85 01/03/89 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL CANAD 520,116 1,289,493 METHOD AND APPARATUS FOR CATALYST CONTAIN-
ISSUED 10/08/86 09/24/91 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL EPO 86906207.5 0243404 METHOD AND APPARATUS FOR CATALYST CONTAIN-
ISSUED 10/08/86 08/18/93 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL JAPAN 61-505476 METHOD AND APPARATUS FOR CATALYST CONTAIN-
PENDING 10/08/86 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL INDIA 801/MAS/86 METHOD AND APPARATUS FOR CATALYST CONTAIN-
PENDING 10/10/86 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL PCT US86/02089 METHOD AND APPARATUS FOR CATALYST CONTAIN-
PUBLISHED 10/08/86 MENT IN MULTIPHASE MEMBRANE
4821-012 CHIRL GERWE EP0243404 P3688098.3 METHOD AND APPARATUS FOR CATALYST CONTAIN-
ISSUED 10/01/86 08/18/93 MENT IN MULTIPHASE MEMBRANE
4821-013 CHIRL USA 06/254,350 4,786,597 METHOD AND APPARATUS FOR CONDUCTING
ISSUED 04/15/81 11/22/88 CATALYTIC REACTIONS WITH SIMULTANEOUS PRODUCT
SEPARATION AND RECOVERY
4821-017 CHIRL USA 06/938,230 4,754,089 PHASE TRANSFER CATALYSIS
ISSUED 12/05/86 06/28/88
4821-017 CHIRL PCT US87/03051 PHASE TRANSFER CATALYSIS
PUBLISHED 11/20/87
4821-017 CHIRL JAPAN 63-501326 PHASE TRANSFER CATALYSIS
PENDING 11/20/87
4821-031 CHIRL USA 07/178,743 5,077,217 METHOD FOR MEMBRANE REACTOR RESOLUTION
ISSUED 04/07/88 12/31/91 OF STEREOISOMERS
4821-033 CHIRL USA 07/178,950 5,057,427 METHOD FOR RESOLUTION OF STEREOISOMERS
ISSUED 04/07/88 10/15/91
4821-034 CHIRL USA 07/178,735 5,196,568 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
ISSUED 04/07/88 03/23/93 SYSTEMS AND THEIR PREPARATION
</TABLE>
<PAGE> 20
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 5
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
4821-034 CHIRL CANAD 593,763 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
PENDING 04/05/89 SYSTEMS AND THEIR PREPARATION
4821-034 CHIRL EPO 899049993 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
ALLOWED 04/06/89 SYSTEMS AND THEIR PREPARATION
4821-034 CHIRL ISREA 89848 COMPOUNDS USEFUL IN ENZYMATIC SYSTEMS AND
PENDING 04/04/89 THEIR PREPARATION
4821-034 CHIRL JAPAN 1-504763 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
PENDING 04/06/89 SYSTEMS AND THEIR PREPARATION
4821-034 CHIRL INDIA 261/MAS/89 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
PENDING 04/04/89 SYSTEMS AND THEIR PREPARATION
4821-034 CHIRL PCT US89/01429 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
PUBLISHED 04/06/89 SYSTEMS AND THEIR PREPARATION
4821-037 CHIRL JAPAN 1-509576 DERIVATIVES AND PRECURSORS OF CAPTOPRIL
PENDING 08/25/89 AND ITS ANALOGUES
4821-037 CHIRL INDIA 644/MAS/89 170190 DERIVATIVES AND PRECURSORS OF CAPTOPRIL AND
ISSUED 08/28/89 08/28/89 ITS ANALOGUES
4821-037 CHIRL EPO 89910020.0 DERIVATIVES AND PRECURSORS OF CAPTOPRIL AND
PENDING 08/25/89 ITS ANALOGUES
4821-037 CHIRL PCT US89/03695 DERIVATIVES AND PRECURSORS OF CAPTOPRIL AND
PUBLISHED 08/25/89 ITS ANALOGUES
4821-037 CHIRL ISREA 91444 DERIVATIVES AND PRECURSORS OF CAPTOPRIL AND
ISSUED 08/27/89 03/30/95 ITS ANALOGUES
4821-038 CHIRL ISREA 91581 91581 METHOD FOR PREPARING CAPTOPRIL AND ITS
ISSUED 09/08/89 10/10/93 ANALOGUES
4821-038 CHIRL JAPAN 1-510131 METHOD FOR PREPARING CAPTOPRIL AND ITS
PENDING 09/12/89 ANALOGUES
4821-038 CHIRL PCT US89/03960 METHOD FOR PREPARING CAPTOPRIL AND ITS
PUBLISHED 09/12/89 ANALOGUES
4821-038 CHIRL EPO 89910744.5 METHOD FOR PREPARING CAPTOPRIL AND ITS
PENDING 09/12/89 ANALOGUES
4821-047 CHIRL PCT US89/05671 METHOD AND APPARATUS FOR CATALYST
PUBLISHED 12/18/89 CONTAINMENT IN MULTIPHASE MEMBRANE REACTOR
SYSTEMS
</TABLE>
<PAGE> 21
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 6
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
4821-048 CHIRL USA 07/309,769 5,274,300 ENZYMATIC HYDROLYSIS OF GLYCIDATE ESTERS
ISSUED 02/10/89 12/28/93 IN THE PRESENCE OF BISULFITE ANION
4821-049 CHIRL USA 07/335,636 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING 04/10/89 GLYCIDATE ESTERS
4821-049 CHIRL PCT US89/04784 PROCESS FOR PREPARING OPTICALLY ACTIVE
PUBLISHED 10/26/89 GLYCIDATE ESTERS
4821-049 CHIRL CANAD 2,001,515 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING 10/25/89 GLYCIDATE ESTERS
4821-049 CHIRL JAPAN 01-511470 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING 10/26/89 GLYCIDATE ESTERS
4821-049 CHIRL ISREA 92122 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING 10/26/89 GLYCIDATE ESTERS
4821-049 CHIRL EPO 89912309.5 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING 10/26/89 GLYCIDATE ESTERS
4821-051 CHIRL CANAD 609,215 DERIVATIVES AND PRECURSORS OF CAPTOPRIL
PENDING 08/24/89 AND ITS ANALOGUES & METHODS FOR PREPARING
CAPTOPRIL AND ITS ANALOGUES THEREFROM
4821-051 CHIRL SPAIN P8902943 2,021,901 DERIVATIVES AND PRECURSORS OF CAPTOPRIL
ISSUED 08/25/89 08/25/89 AND ITS ANALOGUES & METHODS FOR PREPARING
CAPTOPRIL AND ITS ANALOGUES THEREFROM
4821-068 CHIRL USA 07/631,808 5,189,200 PROCESS FOR THE STEREOSELECTIVE
ISSUED 12/21/90 02/23/93 TRANSFORMATION OF A DIOL TO AN ALCOHOL
4821-068 CHIRL EPO 91403414.5 493187 PROCESS FOR THE STEREOSELECTIVE
ISSUED 12/17/91 04/26/95 TRANSFORMATION OF A DIOL TO AN ALCOHOL
4821-068 CHIRL JAPAN PROCESS FOR THE STEREOSELECTIVE
PENDING 12/19/91 TRANSFORMATION OF A DIOL TO AN ALCOHOL
4821-069 CHIRL INDIA 668/MAS/90 171996 METHOD AND APPARATUS FOR CATALYST
ISSUED 08/22/90 10/10/86 CONTAINMENT IN MULTIPHASE MEMBRANE REACTOR
SYSTEMS
4821-075 CHIRL INDIA 1025/MAS/90 171958 ENZYMATIC RESOLUTION SYSTEMS AND COMPOUNDS
ISSUED 12/17/90 04/04/89 USEFUL IN THE SYSTEMS AND THEIR PREPARATION
4821-076 CHIRL USA 07/664,515 5,237,073 DERIVATIVES AND PRECURSORS OF CAPTOPRIL
ISSUED 03/05/91 08/17/93 AND ITS ANALOGUES
</TABLE>
<PAGE> 22
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 7
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
4821-089 CHIRL USA 07/717,432 5,271,812 ELECTROLYTIC OXIDATION METHOD FOR THE
ISSUED 06/19/91 12/21/93 PRODUCTION OF CYCLIC SULFATES AND SULFAMIDATES
4821-090 CHIRL INDIA 386/MAS/91 173026 DERIVATIVES AND PRECURSORS OF CAPTOPRIL AND
ALLOWED 01/15/91 08/28/89 ITS ANALOGUES AND A PROCESS FOR PREPARING SAME
4821-091 CHIRL USA 07/839,601 5,302,257 ELECTROCATALYTIC ASYMMETRIC
ISSUED 02/21/92 04/12/94 DIHYDROXYLATION OF OLEFINIC COMPOUNDS
4821-091 CHIRL PCT US93/01483 ELECTROCATALYTIC ASYMMETRIC DIHYDROXYLATION
PUBLISHED 02/19/93 OF OLEFINIC COMPOUNDS
4821-091 CHIRL EPO 93906081.0 ELECTROCATALYTIC ASYMMETRIC DIHYDROXYLATION
PENDING 02/19/93 OF OLEFINIC COMPOUNDS
4821-091 CHIRL AUSAL 37255/93 ELECTROCATALYTIC ASYMMETRIC DIHYDROXYLATION
PENDING 02/19/93 OF OLEFINIC COMPOUNDS
4821-091 CHIRL CANAD 2,130,564 ELECTROCATALYTIC ASYMMETRIC DIHYDROXYLATION
PENDING 02/19/93 OF OLEFINIC COMPOUNDS
4821-091 CHIRL JAPAN 5-514965 ELECTROCATALYTIC ASYMMETRIC DIHYDROXYLATION
PENDING 02/19/93 OF OLEFINIC COMPOUNDS
4821-103 CHIRL INDIA 535/MAS/91 173705 PROCESS FOR PREPARING OPTICALLY ACTIVE
ALLOWED 07/16/91 10/31/89 GLYCIDATE ESTERS
4821-104 CHIRL USA 07/756,950 5,198,568 COMPOUNDS USEFUL IN ENZYMATIC RESOLUTION
ISSUED 09/09/91 03/30/93 SYSTEMS AND THEIR PREPARATION
4821-105 CHIRL USA 07/766,958 5,166,361 METHODS FOR PREPARING CAPTOPRIL AND ITS
ISSUED 09/25/91 11/24/92 ANALOGUES
4821-142 CHIRL USA 07/926,254 5,258,517 METHOD FOR PREPARING OPTICALLY PURE
ISSUED 08/06/92 11/02/93 PRECURSORS OF PAROXETINE
4821-142 CHIRL PCT US93/07363 METHOD OF PREPARING OPTICALLY PURE
PUBLISHED 08/05/93 PRECURSORS OF PAROXETINE
4821-142 CHIRL JAPAN 6-505560 METHOD OF PREPARING OPTICALLY PURE
PENDING 08/05/93 PRECURSORS OF PAROXETINE
4821-142 CHIRL EPO 93918661.5 METHOD OF PREPARING OPTICALLY PURE
PENDING 08/05/93 PRECURSORS OF PAROXETINE
4821-142 CHIRL AUSAL 48032/93 METHOD OF PREPARING OPTICALLY PURE
PENDING 08/05/93 PRECURSORS OF PAROXETINE
</TABLE>
<PAGE> 23
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 8
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
4821-142 CHIRL CANAD 2,141,843 METHOD OF PREPARING OPTICALLY PURE
PENDING 08/05/93 PRECURSORS OF PAROXETINE
4821-154 CHIRL USA 07/936,437 5,286,899 PROCESS FOR THE STEREOSELECTIVE
ISSUED 08/27/92 02/15/94 TRANSFORMATION OF A DIOL TO AN ALCOHOL
4821-165 CHIRL INDIA 390/MAS/91 173098 METHOD FOR PREPARING CAPTOPRIL AND ITS
ALLOWED 05/17/91 08/29/89 ANALOGUES
4821-183 CHIRL USA 08/182,919 5,419,817 ELECTROCATALYTIC ASYMMETRIC
ISSUED 01/15/94 05/30/95 DIHYDROXYLATION OF OLEFINIC COMPOUNDS
4821-214 CHIRL EPO 95200168.3 PROCESS FOR PREPARING OPTICALLY ACTIVE
PENDING GLYCIDATE ESTERS
80806 CHIRL USA 08/307,322 IN VITRO METHOD FOR PREDICTING THE
PENDING 09/16/94 EVOLUTIONARY RESPONSE OF A PROTEIN TO A DRUG
TARGETED THEREAGAINST
80806 CHIRL PCT US95/11860 IN VITRO METHOD FOR PREDICTING THE
PENDING 09/18/95 EVOLUTIONARY RESPONSE OF A PROTEIN TO A DRUG
TARGETED THEREAGAINST
80806A CHIRL USA IN VITRO METHOD FOR PREDICTING THE
PENDING 06/07/95 EVOLUTIONARY RESPONSE OF A PROTEIN TO A DRUG
TARGETED THEREAGAINST
80806CIP CHIRL USA 08/420,003 IN VITRO METHOD FOR PREDICTING THE
PENDING 04/10/95 EVOLUTIONARY RESPONSE OF HIV PROTEASE TO A DRUG
TARGETED THEREAGAINST
C8792-75 CHIRL USA 07/879,538 5,322,791 PROCESS FOR PREPARING (S)-ALPHA-
ISSUED 05/04/92 06/21/94 METHYALARYLACETIC ACIDS
CRP-044 CHIRL USA 07/479,935 5,167,824 SEPARATION BY CARRIER MEDIATED TRANSPORT
ISSUED 02/14/90 12/01/92
CRP-044 CHIRL PCT US91/00627 SEPARATION BY CARRIER MEDIATED TRANSPORT
PUBLISHED 01/30/91
CRP-044 CHIRL JAPAN 504476/91 SEPARATION BY CARRIER MEDIATED TRANSPORT
PENDING 01/30/91
CRP-044 CHIRL AUSAL 72491/91 637884 SEPARATION BY CARRIER MEDIATED TRANSPORT
ISSUED 01/30/91
</TABLE>
<PAGE> 24
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 9
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
CRP-044 CHIRL EPO 91904736.5 SEPARATION BY CARRIER MEDIATED TRANSPORT
PENDING 01/30/91
CRP-044 CHIRL CANAD 2,076,041-9 SEPARATION BY CARRIER MEDIATED TRANSPORT
PENDING 01/20/91
MIT4253F-C CHIRL USA 07/917,499 5,332,843 OPTICALLY ACTIVE DERIVATIVES OF GLYCIDOL
ISSUED 07/21/92 07/26/94
MIT4253FWC CHIRL USA 07/563,793 5,153,338 OPTICALLY ACTIVE DERIVATIVES OF GLYCIDOL
ISSUED 08/03/90 10/06/92
MIT4310 CHIRL USA 06/913,936 4,946,974 OPTICALLY ACTIVE DERIVATIVES OF GLYCIDOL
ISSUED 10/01/86 08/07/90
MIT43100FC CHIRL USA 08/005,938 5,344,947 OPTICALLY ACTIVE DERIVATIVES OF GLYCIDOL
ISSUED 01/15/93 09/06/94
MIT43100IV CHIRL CANAD 540,572 OPTICALLY ACTIVE DERIVATIVES OF GLYCIDOL
PENDING 06/25/87
MIT4585A CHIRL USA 07/159,068 4,871,855 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
ISSUED 02/23/88 10/03/89 DIHYDROXYLATION USING DIHYDROQUINIDINE...AS
ESTERS
MIT4585A2 CHIRL USA 07/250,378 4,965,364 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
ISSUED 09/28/88 10/23/90 DIHYDROXYLATION
MIT4585A2 CHIRL PCT US89/00086 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
PUBLISHED 01/10/89 DIHYDROXYLATION
MIT4585A2 CHIRL CANAD 587,964 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
PENDING 01/11/89 DIHYDROXYLATION
MIT4585A2 CHIRL EPO 89901900.4 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
PENDING 01/10/89 DIHYDROXYLATION
MIT4585A2 CHIRL JAPAN 1-501814 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
PENDING 01/10/89 DIHYDROXYLATION
MIT4585A2I CHIRL EPO 95 20 04588 LIGAND-ACCELERATED CATALYTIC ASYMMETRIC
PENDING 02/23/95 DIHYDROXYLATION
MIT4585A3 CHIRL USA 07/512,934 5,126,494 METHODS FOR CATALYTIC ASYMMETRIC
ISSUED 04/23/90 06/30/92 DIHYDOXYLATION OF OLEFINS
</TABLE>
<PAGE> 25
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 10
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
MIT4585A4 CHIRL PCT US91/02778 METEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PUBLISHED 04/23/91 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A4 CHIRL CANAD 2,081,315 METEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 04/23/91 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A4 CHIRL EPO 91909937.2 METEROCYCLIC CHIRL LIGANDS AND METHOD FOR
PENDING 10/23/92 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A4 CHIRL JAPAN 509820/91 METEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 04/23/91 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A5 CHIRL PCT US92/03940 METEROCYCLICCHIRAL LIGANDS AND METHOD FOR
CATALYTIC
PUBLISHED 05/08/92 ASYMMETRIC DIHYDOXYLATION OF OLEFINS
MIT4585A5 CHIRL EPO 92912059.0 METEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 01/08/93 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A5 CHIRL CANAD 2,087,035 HETEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 05/08/92 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A5 CHIRL JAPAN 500136/93 HETEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 05/08/92 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A5 CHIRL USA 08/017,960 HETEROCYCLIC CHIRAL LIGANDS AND METHOD FOR
PENDING 02/12/93 CATALYTIC ASYMMETRIC DIHYDROXYLATION OF
OLEFINS
MIT4585A5B CHIRL USA 07/775,683 5,260,461 NEW LIGANDS FOR ADM: MULTIPLE CINCHONA
ISSUED 10/10/91 11/09/93 ALKALOIDS AND MODERATELY SIZED ORGANIC
SUBSTITUTES LINKED THROUGH...
MIT4585A5B CHIRL PCT US92/08544 NEW LIGANDS FOR ADM: MULTIPLE CINCHOMA
PUBLISHED 10/06/92 ALKALOIDS AND MODERATELY SIZED ORGANIC
SUBSTITUTENTS LINKED THROUGH...
MIT4585A5B CHIRL EPO 92921493.0 NEW LIGANDS FOR ADM: MULTIPLE CINCHOMA
PENDING 10/06/92 ALKALOIDS AND MODERATELY SIZED ORGANIC
SUBSTITUTENTS LINKED THROUGH...
</TABLE>
<PAGE> 26
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 11
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
MIT4585A5B CHIRL JAPAN 507170/93 NEW LIGANDS FOR ADM: MULTIPLE CINCHOMA
PENDING 10/06/92 ALKALOIDS AND MODERATELY SIZED ORGANIC
SUBSTITUTENTS LINKED THROUGH...
MIT4585A5B CHIRL CANAD 2,120,919 NEW LIGANDS FOR ADM: MULTIPLE CINCHOMA
PENDING 10/06/92 ALKALOIDS AND MODERATELY SIZED ORGANIC
SUBSTITUTENTS LINKED THROUGH...
MIT4585A6 CHIRL USA 07/777,755 5,227,543 FACILITATION OF TURNOVER IN THE ADH BY
ISSUED 10/10/91 07/13/93 ADDITIVES WHICH CATALYZE THE HYDROLYSIS OF THE
OS(VI) GLYCOLATE ESTERS
MIT4619 CHIRL USA 07/199,157 5,023,342 CYCLIC SULFATE COMPOUNDS
ISSUED 05/26/88 06/11/91
MIT4619A CHIRL USA 07/369,189 5,112,990 RUTHENIUM-CATALYZED PRODUCTION OF CYCLIC
ISSUED 06/21/89 05/12/92 SULFATES
MIT4619A CHIRL PCT US89/02292 RUTHENIUM-CATALYZED PRODUCTION OF CYCLIC
PUBLISHED 05/25/89 SULFATES
MIT4619A CHIRL EPO 89906903.3 RUTHENIUM-CATALYZED PRODUCTION OF CYCLIC
PENDING 05/25/89 SULFATES
MIT4619A CHIRL JAPAN 1-506576 RUTHENIUM-CATALYZED PRODUCTION OF CYCLIC
PENDING 05/25/89 SULFATES
MIT4619AA CHIRL USA 07/712,199 5,321,143 RUTHENIUM-CATALYZED PRODUCTION OF CYCLIC
ISSUED 06/07/91 06/14/94 SULFATES
RCT366A CHIRL USA 07/528,007 5,080,795 SUPPORTED CHIRAL LIQUID MEMBRANE FOR THE
ISSUED 05/23/90 01/14/92 SEPARATION OF ENANTIOMERS
RCT366A CHIRL PCT US91/03636 SUPPORTED CHIRAL LIQUID MEMBRANE FOR THE
PUBLISHED 05/23/91 SEPARATION OF ENANTIOMERS
RCT366A CHIRL CANAD 2,083,388 SUPPORTED CHIRAL LIQUID MEMBRANE FOR THE
PENDING 05/23/91 SEPARATION OF ENANTIOMERS
W80117 CHIRL PCT US91/01897 CHIRAL CATALYSTS AND EPOXIDATION REACTIONS
PUBLISHED 03/21/91 CATALYZED THEREBY
W80117 CHIRL EPO 91907292.6 CHIRAL CATALYSTS AND EPOXIDATION REACTIONS
PENDING 10/06/92 CATALYZED THEREBY
WB0117 CHIRL CANAD 2,077,541.6 CHIRAL CATALYSTS AND EPOXIDATION REACTIONS
PENDING 03/21/91 CATALYZED THEREBY
</TABLE>
<PAGE> 27
PENDING PATENT APPLICATIONS/MASTER LIST (BY ATT DOCKET NO.)
<TABLE>
CHIRAL DIVISION
Page 12
<CAPTION>
====================================================================================================================================
Docket Div. Country Appln. No./ Patent No./ Title
Number/ Filing Date Issue Date
Status
....................................................................................................................................
<S> <C> <C> <C> <C> <C>
WB0117 CHIRL AUSAL 75553/91 648301 CHIRAL CATALYSTS AND EPOXIDATION REACTIONS
ISSUED 03/21/91 09/06/94 CATALYZED THEREBY
WB0117 CHIRL JAPAN 3-506638 CHIRAL CATALYSTS AND EPOXIDATION REACTIONS
PENDING 03/21/91 CATALYZED THEREBY
WB0117/22 CHIRL PCT US92/07261 CHIRAL CATALYSTS, EPOXIDATION AND SULFIDE
PUBLISHED 08/26/92 OXIDATION REACTIONS, METHODS OF PRODUCING
EPOXYCHROMANS AND TAXOL...
WB0117/32 CHIRL USA 07/938,245 CHIRAL CATALYSTS, EPOXIDATION REACTIONS,
PENDING 10/15/92 METHOD OF PRODUCING EPOXYCHROMANS AND
METHOD OF PRODUCING TAXOL
WB0117/40 CHIRL EPO 92919443.9 CHIRAL CATALYSTS, EPOXIDATION AND SULFIDE
PENDING 08/26/92 OXIDATION REACTIONS, METHODS OF PRODUCING
EPOXYCHROMANS AND TAXOL...
WB0117/41 CHIRL CANAD 2,116,335 CHIRAL CATALYSTS, EPOXIDATION AND SULFIDE
PENDING 08/26/92 OXIDATION REACTIONS, METHODS OF PRODUCING
EPOXYCHROMANS AND TAXOL...
WB0117/42 CHIRL JAPAN 5-504670 CHIRAL CATALYSTS, EPOXIDATION AND SULFIDE
PENDING 08/26/92 OXIDATION REACTIONS, METHODS OF PRODUCING
EPOXYCHROMANS AND TAXOL...
WB0117/43 CHIRL AUSAL 25580/92 CHIRAL CATALYSTS, EPOXIDATION AND SULFIDE
PENDING 02/26/94 OXIDATION REACTIONS, METHODS OF PRODUCING
EPOXYCHROMANS AND TAXOL...
====================================================================================================================================
</TABLE>
<PAGE> 28
EXHIBIT C
COMPOUNDS EXCLUDED FROM SCI FIELD
This Exhibit consists of Exhibit C-1 and Exhibit C-2.
Exhibit C-1
- - -----------
Terfenadine carboxylate (racemate and single isomers)
R-Ketoprofen
S-Ketoprofen (for use in dentifrice or mouthwash formulations)
R-Albuterol
R,R,-Formoterol
R-Fluoxetine
S-Fluoxetine
S-Oxybutynin
R-Oxybutynin
S-Doxazosin
Norastemizole
Norcisapride (racemate and single isomers)
R-Ondansetron
S-Ondansetron
(-)-Amlodipine
Pantoprazole single isomers
Ketoconazole single isomers
Itraconazole single isomers
Descarboethoxyloratadine
Lomefloxacin single isomers
Ketorolac single isomers
Etodolac single isomers
Metoprolol single isomers
Exhibit C-2
- - -----------
Other active metabolite or single-isomer pharmaceutical compounds and other
chiral compounds which are identified as being from a Combinatorial Chemistry
Library, where such compounds are being developed by SI or its licensees;
PROVIDED, HOWEVER, that, with respect to each such compound under this Exhibit
C-2,
(i) SCI shall have a non-exclusive, royalty-free right and license to use
and practice the Licensed Technology on a world-wide basis in order to
develop, manufacture, use and sell such compound pursuant to all of
the terms and conditions of thisAgreement and such compound shall be
included in the SCI Field (but only on a non-exclusive basis) until
such time as SCI might lose such non-exclusive rights in accordance
with (iii) below.
(ii) SI shall have the right to notify SCI in writing at any time after SI
or one of its licensees or sublicensees begins clinical trials on such
compound that SI desires to add such compound to Exhibit C-1;
<PAGE> 29
(iii) If SCI had prior to receipt of such notice under (ii) above not
produced at least one (1) kilogram of such compound for sale to a
third party, then such compound shall be added to Exhibit C-1 and
shall be excluded from the SCI Field;
(iv) If SCI had prior to receipt of such notice under (ii) above
produced at least one (1) kilogram of such compound for sale to
a third party, then:
(A) SCI shall have a non-exclusive, royalty-free perpetual right and
license to use and practice the Licensed Technology on a
world-wide basis in order to develop, manufacture, use and sell
such compound pursuant to all of the terms and conditions of this
Agreement and such compound shall be included in the SCI Field
(but only on a non-exclusive basis); and
(B) SI shall also have the right to use and practice the Licensed
Technology (with the right to sublicense) on a world-wide basis
in order to develop, manufacture, use and sell such compound.
<PAGE> 30
EXHIBIT D
---------
LICENSES AGREEMENTS GRANTED BY SI TO THIRD PARTIES
--------------------------------------------------
1. License Agreement between SI and Alza dated April 13, 1994.
2. License Agreement between SI and Sterling Winthrop Inc. dated November 30,
1992.
3. License Agreement between SI and Marion Merrell Dow Agreement dated June 1,
1993.
<PAGE> 31
AMENDMENT NO. 1
TO
TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
The undersigned refer to a certain Technology Transfer and License
Agreement effective as of January 1, 1995 by and between Sepracor Inc. and
SepraChem Inc. (the "Agreement").
Capitalized terms not defined herein shall have the meanings ascribed to
them in the Agreement.
1. SEMI-SYNTHETIC PACLITAXEL. The parties hereto agree to amend Section 1.5
of the Agreement so as to include all patents and technology relating to
semi-synthetic Paclitaxel, which was initially discovered on July 11, 1995.
2. CLARIFICATION OF RIGHTS RETAINED BY LICENSOR. For the sake of
clarification, the parties hereto confirm that, notwithstanding anything
contained in the Agreement to the contrary, Licensor has retained the right to
grant to a third party a perpetual and exclusive right and license, including
the right to grant sublicenses, to the Licensed Technology and to Improvements
for use by such third party in a field limited to the development, production
and sale or other transfer of Combinatorial Chemistry Libraries (and related
technologies) of chiral and achiral compounds for testing against chemical or
biological targets.
3. ASSIGNMENT OF NAGASE AGREEMENTS. To the extent that Nagase agrees to the
assignment by SI to SCI of SI's rights and obligations under any or all of the
agreements listed on Attachment 1 hereto, or of any part thereof, then SI shall
assign such rights and obligations to SCI forthwith.
4. NO OTHER CHANGES. Except as is expressly stated in this Amendment No. 1,
the terms of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment No. 1
under seal as of July 12, 1995.
SEPRACOR INC., as Licensor
By /s/ Timothy J. Barberich
-----------------------------------
Timothy J. Barberich, President
SEPRACHEM INC., as Licensee
By /s/ Robert L. Bratzler
-----------------------------------
Robert L. Bratzler, President
<PAGE> 32
ATTACHMENT 1
(1) CONFIDENTIALITY AGREEMENT dated as of August 24, 1989
(2) DEVELOPMENT AGREEMENT dated as of July 24, 1990
(3) MEMORANDUM to the DEVELOPMENT AGREEMENT dated as of July 17, 1992
(4) SECOND MEMORANDUM TO THE DEVELOPMENT AGREEMENT dated as of May 10, 1993
(5) LICENSE AGREEMENT (S-IBUPROFEN) dated as of July 24, 1990
(6) SECOND AMENDMENT TO THE S-IBUPROFEN LICENSE AGREEMENT dated as of May 10,
1993
(7) THIRD AMENDMENT TO THE S-IBUPROFEN LICENSE AGREEMENT dated as
of ____________
(8) DISTRIBUTORSHIP AND AGENCY AGREEMENT as of July 24, 1990
(9) LICENSE AGREEMENT (S-ATENOLOL) dated as of January 24, 1992
(10) AMENDMENT TO S-ATENOLOL LICENSE AGREEMENT dated as of May 10, 1993
(11) LICENSE AGREEMENT (S-FLURBIPROFEN) dated as of July 24, 1992
(12) AMENDMENT TO S-FLURBIPROFEN LICENSE AGREEMENT dated as of May 10, 1993
(13) LICENSE AGREEMENT (GLYCIDOL AND ITS DERIVATIVES) dated as of July 24, 1992
(14) AMENDMENT TO GLYCIDOL AND ITS DERIVATIVES LICENSE AGREEMENT dated as of May
10, 1993
(15) LICENSE AGREEMENT (CAPTOPRIL) dated as of July 24, 1992
(16) LICENSE AGREEMENT (S-KETOPROFEN) dated as of July 24, 1992
(17) AMENDMENT TO THE S-KETOPROFEN LICENSE AGREEMENT dated as of July 24, 1993
(18) LICENSE AGREEMENT (6-APA) dated as of July 24, 1992
(19) AMENDMENT TO 6-APA LICENSE AGREEMENT dated as of May 10, 1993
(20) LICENSE AGREEMENT (EPOXYCHROMANS AND ITS DERIVATIVES) dated as of ________,
1995
-1-
<PAGE> 33
(21) SUMMARY OF SEPRACOR/NAGASE MEETING, Marlborough, MA, USA dated as of July
28, 1994
(22) PROFIT SHARING OF S-IBUPROFEN, S-KETOPROFEN, AND R-KETOPROFEN dated as of
September 9, 1994
(23) CONFIDENTIALITY AGREEMENT (KHANDELWAL/6-APA) dated as of February 1, 1991
(24) CONFIDENTIALITY AGREEMENT (ALEMBIC/6-APA) dated as of July 1, 1991
(25) CONFIDENTIALITY AGREEMENT (DWC/CAPTOPRIL) dated as of July 25, 1991
(26) CONFIDENTIALITY AGREEMENT (WOCKHARDT/CAPTOPRIL) dated as of October 31,
1991
(27) CONFIDENTIALITY AGREEMENT (SYNPAC/6-APA) dated as of March 6, 1992
(28) CONFIDENTIALITY AGREEMENT (BOOTS/S-IBUPROFEN) dated as of March 6, 1992
(29) CONFIDENTIALITY AGREEMENT (ETHYL/S-IBUPROFEN) dated as of August 16, 1993
(30) CONFIDENTIALITY AGREEMENT (CHEMINOR/S-IBUPROFEN) dated as of October 1,
1993
(31) CONFIDENTIALITY AGREEMENT (SHASUN/S-IBUPROFEN) dated as of April 6, 1994
-2-
<PAGE> 34
AMENDMENT No. 2
TO
TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
This Amendment No. 2, dated as of the 7th day of February, 1996 ("Amendment
No. 2"), is to the Technology Transfer and License Agreement effective as of
January 1, 1995, as amended by Amendment No. 1 to Technology License and
Transfer Agreement ("Amendment No. 1"), dated as of July 12, 1995 (as so amended
by Amendment No. 1, the "Technology Transfer Agreement"), by and between
SEPRACOR INC., a Delaware corporation which has offices at 33 Locke Drive,
Marlborough, Massachusetts ("SI"), and SEPRACHEM INC., a Delaware corporation
which has offices at 33 Locke Drive, Marlborough, Massachusetts ("SCI").
WHEREAS, under the Technology Transfer Agreement, SI granted SCI a license
to use certain intellectual and industrial property rights, as more fully
described therein; and
WHEREAS, both parties desire to amend certain provisions of the Technology
Transfer Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. The first sentence of Section 8.1 of the Technology Transfer Agreement
is herby deleted in its entirety and the following substituted therefor:
"The term of this Agreement shall commence on the Effective Date and shall
continue until the earlier to occur of (i) December 31, 1998; or (ii) on six
months written notice from SI to SCI or from SCI to SI on or after the date
after March 1, 1996 (a) on which the ownership by SI of SCI shall first be less
than twenty percent (20%) of the outstanding voting stock of SCI, PROVIDED that
such event does not occur in connection with a merger or consolidation of SCI
into another entity, or (b) if SCI has been merged or consolidated into another
entity and SI has exchanged its stock of SCI for stock of the parent corporation
of such other entity, then the date on which the ownership by SI of such parent
corporation shall first be less than twenty percent (20%) of the outstanding
voting stock of such parent corporation; PROVIDED, that any perpetual licenses
or sublicenses granted under this Agreement, and any licenses or sublicenses
granted under Section 2.1(b) hereof, shall survive such expiration or
termination to the extent that they relate to the Licensed Technology and any
Improvements existing on such date of termination or expiration; PROVIDED,
FURTHER, however, that any licenses or sublicenses granted under Section 2.1(b)
hereof shall continue to be
<PAGE> 35
terminable in accordance with the provisions of Exhibit C-2 hereof."
2. Exhibit D to the Technology Transfer Agreement is hereby amended to add
all of the agreements listed on Appendix 1 to Amendment No. 1; it being
understood and agreed that the provisions of Section 3 of Amendment No. 1 remain
in full force and effect.
3. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth for such terms in the Technology Transfer Agreement.
4. As so amended by this Amendment No. 2 and Amendment No. 1, the terms and
provisions of the Technology Transfer Agreement are ratified and confirmed and
shall remain in full force and effect as though set forth in full herein.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers,
have signed this Amendment under seal.
SEPRACOR INC., as Licensor
By /s/ Timothy J. Barberich
-----------------------------------
Timothy J. Barberich, President
SEPRACHEM INC., as Licensee
By /s/ Robert L. Bratzler
-----------------------------------
Robert L. Bratzler, President
-2-
<PAGE> 1
Exhibit 11
<TABLE>
CHIREX INC.
STATEMENT COMPUTATION OF LOSS PER SHARE
<CAPTION>
Historical
Weighted
Average
Shares
<S> <C>
Type of Security
Company, for the three months ended March 31, 1996
Common stock outstanding at beginning of year 3,489,301
Issuance of cheap stock 50,285
Weighted average common stock issued during the period 1,618,657
----------
Weighted average common stock oustanding 5,158,243
==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 6,248
<SECURITIES> 0
<RECEIVABLES> 11,576
<ALLOWANCES> 0
<INVENTORY> 19,030
<CURRENT-ASSETS> 903
<PP&E> 127,874
<DEPRECIATION> 69,365
<TOTAL-ASSETS> 125,110
<CURRENT-LIABILITIES> 12,773
<BONDS> 0
<COMMON> 108
0
0
<OTHER-SE> 85,098
<TOTAL-LIABILITY-AND-EQUITY> 125,110
<SALES> 7,276
<TOTAL-REVENUES> 7,599
<CGS> 6,031
<TOTAL-COSTS> 6,031
<OTHER-EXPENSES> 11,724
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> (10,199)
<INCOME-TAX> 398
<INCOME-CONTINUING> (10,597)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,597)
<EPS-PRIMARY> (2.05)
<EPS-DILUTED> 0
</TABLE>
