<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
--------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-22669
-------
AURORA BIOSCIENCES CORPORATION
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0669859
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11010 Torreyana Road, San Diego, CA 92121
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(619) 404-6600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 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 X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class April 30, 1999
----- --------------
<S> <C>
Common Stock, $.001 par value 17,135,453
</TABLE>
<PAGE>
AURORA BIOSCIENCES CORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets - March 31, 1999 (Unaudited) and December 31, 1998....................................3
Statements of Operations (Unaudited) - Three months ended March 31, 1999 and 1998....................4
Statements of Cash Flows (Unaudited) - Three months ended March 31, 1999 and 1998....................5
Notes to Financial Statements (Unaudited)............................................................6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................................................8
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K............................................................12
SIGNATURE.....................................................................................................13
</TABLE>
2
<PAGE>
ART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AURORA BIOSCIENCES CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,703,933 $ 9,477,916
Investment securities, available-for-sale 15,815,165 18,547,991
Accounts receivable 5,006,121 3,750,291
Notes receivable from officers and employees 250,000 210,000
Prepaid expenses 1,070,066 475,927
Other current assets 1,320,713 1,104,249
------------ ------------
Total current assets 31,165,998 33,566,374
Equipment, furniture and leaseholds, net 10,981,169 10,863,357
Notes receivable from officers and employees 170,000 210,000
Restricted cash 1,111,784 1,096,034
Other assets 5,227,738 5,218,951
------------ ------------
Total assets $ 48,656,689 $ 50,954,716
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,491,615 $ 3,216,696
Accrued compensation 654,536 550,770
Other current liabilities 519,052 391,694
Unearned revenue 4,170,000 2,440,833
Capital lease obligations, current portion 2,117,092 2,024,786
------------ ------------
Total current liabilities 10,952,295 8,624,779
Capital lease obligations, less current portion 4,212,225 4,787,667
Stockholders' equity:
Preferred stock, $.001 par value; 7,500,000 shares authorized and no
shares issued and outstanding -- --
Common stock, $.001 par value, 50,000,000 shares authorized,
17,042,549 and 17,024,919 shares issued and outstanding at March
31, 1999 and December 31, 1998, respectively 17,043 17,025
Additional paid-in capital 61,770,844 61,496,842
Unrealized gain from investments 36,377 --
Deferred compensation (2,177,351) (2,240,606)
Accumulated deficit (26,154,744) (21,730,991)
------------ ------------
Total stockholders' equity 33,492,169 37,542,270
------------ ------------
Total liabilities and stockholders' equity $ 48,656,689 $ 50,954,716
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
3
<PAGE>
AURORA BIOSCIENCES CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenue $ 6,519,064 $ 3,647,721
Operating expenses:
Cost of revenue 5,926,668 3,953,713
Research and development 2,850,945 2,741,519
Selling, general and administrative 2,374,191 1,197,817
------------ ------------
Total operating expenses 11,151,804 7,893,049
------------ ------------
Loss from operations (4,632,740) (4,245,328)
Interest income 383,566 741,358
Interest expense (174,579) (150,776)
------------ ------------
Net loss $ (4,423,753) $ (3,654,746)
------------ ------------
------------ ------------
Basic and diluted net loss per share $ (0.26) $ (0.23)
------------ ------------
------------ ------------
Shares used in computing basic and diluted net loss per share 16,736,646 16,016,063
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
4
<PAGE>
AURORA BIOSCIENCES CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (4,423,753) $ (3,654,746)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 711,087 455,477
Amortization of deferred compensation 307,952 244,408
Changes in operating assets and liabilities:
Accounts receivable (1,255,830) 2,018,483
Prepaid expenses and other current assets (810,603) (913,664)
Other assets (8,787) (59,774)
Accounts payable and accrued compensation 378,685 886,917
Other current liabilities 127,358 (78,222)
Unearned revenue 1,729,167 72,500
Other noncurrent liabilities -- 1,182
------------ ------------
Net cash used in operating activities (3,244,724) (1,027,439)
INVESTING ACTIVITIES:
Purchases of short-term investments -- (9,385,379)
Sales and maturities of short-term investments 2,769,203 7,250,000
Purchases of property and equipment (828,899) (535,117)
Restricted cash (15,750) (18,750)
Other assets -- 130,057
------------ ------------
Net cash provided by (used in) investing activities 1,924,554 (2,559,189)
FINANCING ACTIVITIES:
Issuance of common stock, net 29,323 2,424
Principal payments on capital lease obligations (483,136) (325,910)
------------ ------------
Net cash used in financing activities (453,813) (323,486)
------------ ------------
Net decrease in cash and cash equivalents (1,773,983) (3,910,114)
Cash and cash equivalents at beginning of period 9,477,916 23,168,690
------------ ------------
Cash and cash equivalents at end of period $ 7,703,933 $ 19,258,576
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 174,579 $ 150,776
------------ ------------
------------ ------------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Property and equipment acquired under capital leases $ -- $ 1,377,772
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
5
<PAGE>
AURORA BIOSCIENCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Aurora Biosciences
Corporation ("Aurora" or the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments, consisting of normal recurring
adjustments, considered necessary for a fair presentation have been
included. Interim results are not necessarily indicative of results for
a full year.
The balance sheet at December 31, 1998 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.
These financial statements should be read in conjunction with the
audited financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1998, as filed with the Securities and Exchange Commission ("SEC").
2. NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------ ------------
<S> <C> <C>
Numerator:
Net loss $ (4,423,753) $ (3,654,746)
------------ ------------
Numerator for basic and diluted loss per share - income
available to common stockholders $ (4,423,753) $ (3,654,746)
------------ ------------
------------ ------------
Denominator:
Weighted average common shares 16,736,646 16,016,063
------------ ------------
Denominator for basic and diluted loss per share - adjusted
weighted average common shares 16,736,646 16,016,063
------------ ------------
------------ ------------
Basic and diluted loss per share $ (0.26) $ (0.23)
------------ ------------
------------ ------------
</TABLE>
3. COMPREHENSIVE LOSS
Total comprehensive loss was $4,387,376 and $3,654,746 for the three
months ended March 31, 1999 and 1998, respectively. Total comprehensive
loss for March 31, 1999 includes $36,377 unrealized gain from
investments.
6
<PAGE>
AURORA BIOSCIENCES CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
4. COLLABORATIVE AGREEMENTS
In February 1999, the Company entered into an agreement with Pharmacia
& Upjohn, Inc. ("Pharmacia & Upjohn") to provide assay development and
screening services. Also in February 1999, the Company entered into an
agreement with F.Hoffmann-LaRoche Ltd. ("F.Hoffmann-LaRoche") to
provide screen development and technology transfer support. In addition
to payments for services performed, the agreements allow for research
and development milestones, as well as royalties, on compounds
identified through screens generated under the collaborations.
In March 1999, the Company entered into a license agreement with
Clontech Laboratories, Inc. ("Clontech"), whereby Clontech will be
Aurora's sole worldwide licensee to supply certain mutant green
fluorescent protein ("GFP") technology for non-commercial research. The
agreement provides for Clontech to pay for access to the technology as
well as royalties on any GFP tools sold.
7
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THIS FORM 10-Q CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE RELATING
TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE COMPANY. SUCH
STATEMENTS ARE ONLY PREDICTIONS AND ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE,
WITHOUT LIMITATION, THOSE DISCUSSED IN THIS ITEM 2 AS WELL AS THOSE DISCUSSED IN
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
OVERVIEW
Aurora Biosciences Corporation ("Aurora" or the "Company") designs, develops
and sells proprietary drug discovery systems, services and technologies to
accelerate and enhance the discovery of new medicines by the pharmaceutical
and biopharmaceutical industries. Operating activities in 1996 and 1997
focused on the development of an integrated technology platform comprised of
a portfolio of proprietary fluorescent assay technologies its highly
automated ultra-high throughput screening system (the "UHTSS(TM)" Platform)
applicable to Aurora's miniaturized NanoWellTM Assay Plate format. Through
1998 and the first quarter of 1999, while continuing development and
manufacture of other UHTSS components, the Company delivered Module 1 of its
UHTSS Platform to three of its syndicate customers, began development of its
automated master compound storage ("AMCSTM") system, continued to manufacture
and deliver certain subsystems to customers, performed screening services for
collaborators, including screen development and screening, and initiated its
functional genomics GenomeScreenTM program.
The Company had an accumulated deficit of $26.2 million as of March 31, 1999.
The Company's objective is to focus on increasing revenue in 1999, while
controlling the growth of expenses. The Company's ability to achieve
profitability will depend in part on its ability to successfully complete
development, manufacture and delivery of the UHTSS Platform and other systems
that meet contractual specifications, continue to provide screen development and
screening services to pharmaceutical and biotechnology customers and achieve the
required further growth of sales of its systems, services and technologies.
The Company currently generates revenue by developing screens, providing
screening services, providing functional genomics services, developing and
providing the UHTSS Platform and other systems and instruments and licensing
its proprietary technologies. In the future, the Company may realize royalty
and milestone payments from the development and commercialization of drug
candidates identified by its collaborators using Aurora's technologies. The
Company believes that its ability to achieve profitability is not dependent
on receipt of any such milestone payments or royalties, which are not
expected for several years, if at all.
The Company may encounter significant fluctuations in its quarterly financial
performance depending on factors such as timing of revenue recognized from
existing and future contracts and collaborations, timing of expenditures to
develop its products or delivery of technologies and systems and the completion
of contracted service commitments to Aurora's collaborators. The Company will
also continue to invest in new technologies to expand its core drug discovery
capabilities. Accordingly, the Company's results of operations for any period
may not be comparable to, or predictive of, the results of operations for any
other period.
8
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
Total revenue increased 79% from the three months ended March 31, 1998 to the
three months ended March 31, 1999. The increase in revenue resulted from new
agreements entered into since March 31, 1998. These new agreements include a
licensing agreement with Clontech, an agreement with Warner-Lambert Company
("Warner-Lambert") to develop an AMCS system, a screening services agreement
with Cytovia, Inc. and a screen development and screening services agreement
with Pharmacia & Upjohn, Inc. (collectively, the "New Agreements"). Also
contributing to the increase in revenue were screen development milestone
payments from Merck & Co. ("Merck") and Warner-Lambert in the first quarter of
1999.
Total operating expenses increased 41% from the three months ended March 31,
1998 to the three months ended March 31, 1999. The increase in operating
expenses resulted primarily from the growth of the Company, reflected by the
increase to 167 employees at March 31, 1999 from 116 at March 31, 1998. Cost of
revenue increased 50% related to the development of the UHTSS Platform, the AMCS
system and screening subsystems for the Company's collaborators, as well as
screen development and screening services performed under the New Agreements.
Research and development expenses increased 4% with the expansion of the
Company's human cell functional genomics program. Selling, general and
administrative expenses increased 98%, attributable to the growth of the
business development and strategic operations functions and headcount increases
in other administrative areas to support the overall growth of the Company. The
Company anticipates that selling, general and administrative expenses may
continue to increase as it expands its sales and marketing program.
Net interest income decreased 65% from the three months ended March 31, 1998 to
the three months ended March 31, 1999, due to decreased cash and investment
balances and an increase in interest expense incurred on capital lease
obligations.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, Aurora held cash, cash equivalents and investment securities
available-for-sale of $23.5 million and working capital of $20.2 million. The
Company has funded its operations since inception primarily through the issuance
of equity securities with aggregate net proceeds of $57.1 million, receipts from
corporate collaborations and strategic technology alliances of $49.3 million,
capital equipment lease financing of $9.1 million and interest income of $5.2
million.
The Company's facility lease agreements are secured by letters of credit, which
are secured by certificates of deposit recorded as restricted cash. At March 31,
1999, such restricted cash totaled $1.1 million. The letters of credit will be
reduced over the next two years on a predetermined schedule.
The Company has entered into certain technology and license agreements with
commitments totaling approximately $8.3 million over the next five years.
The Company expects significant cash expenditures to continue through 1999 and
into 2000 as it continues its development of screening technology and seeks
access to new technologies to expand its technology platform through
investments, licensing agreements, research and development alliances or
acquisitions.
The Company's strategy for the development of the UHTSS Platform includes the
establishment of a syndicate of collaborators to provide the Company with
funding for development, technology and
9
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
personnel resources and payments for system validation. The Company's UHTSS
Platform co-development syndicate currently includes Bristol-Myers Squibb
Pharmaceutical Research Institute, Eli Lilly and Company, Warner-Lambert and
Merck. The Company has also entered into an agreement with Warner-Lambert to
develop an AMCS system. In addition, the Company has entered into
collaborations with Cytovia, Pharmacia & Upjohn and F.Hoffmann-LaRoche to
provide screen development and/or screening services and with Warner-Lambert
and Becton Dickinson and Company for functional genomics programs. Other
collaborations include a combinatorial chemistry agreement with SIDDCO, Inc.
to synthesize large libraries of chemical compounds for Aurora.
The Company's ability to achieve profitability will be dependent upon its
ability to sell new products and services, and to increase market share of
existing discovery services and technologies by agreements with new
collaborators and expansion of agreements with existing collaborators. Although
the Company is actively seeking to enter into additional collaborations, there
can be no assurance that the Company will be able to negotiate additional
collaborative agreements on acceptable terms, if at all, that the Company's
revenue goals will be met, or that the Company will be able to achieve or
sustain profitability. Some of the Company's current collaborative agreements
provide that they may be terminated by the collaborator without cause upon short
notice, which would result in loss of anticipated revenue. Although certain of
the Company's collaborators would be required to pay certain penalties in the
event they terminate their agreements without cause, there can be no assurance
that any one or more of the Company's collaborators will not elect to terminate
their agreements with the Company. In addition, collaborators may terminate
their agreements for cause if the Company cannot deliver the technology in
accordance with such agreements. There can be no assurance that the Company will
derive any additional revenue from such agreements or that such current or
future collaborative agreements will be successful and provide the Company with
expected benefits. Termination of the Company's existing or future collaborative
agreements, or the failure to enter into a sufficient number of additional
collaborative agreements on favorable terms, or to generate sufficient revenues
from the Company's services and technologies, could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company may be required to raise additional capital over the next several
years in order to conduct or expand its operations or acquire new technology.
Such capital may be raised through additional public or private equity
financings, borrowings and other available sources. No assurance can be given
that the Company's business or operations will not change in a manner that would
consume available resources more rapidly than anticipated, or that substantial
additional funding will not be required before the Company can achieve or
sustain profitable operations. There can be no assurance that the Company will
continue to generate sales from and receive payments under its existing
collaborative agreements or that the Company's existing or potential revenue
will be adequate to fund the Company's operations. If additional funding becomes
necessary, there can be no assurance that additional funds will be available on
favorable terms, if at all. If adequate funds are not available, the Company may
be required to curtail operations significantly or to obtain funds by entering
into arrangements with others that may have a material adverse effect on the
Company's business, financial condition and results of operations.
IMPACT OF YEAR 2000
The Company recognizes the need to ensure its operations will not be adversely
impacted by the inability of computer systems to process data having dates on or
after January 1, 2000 (the "Year 2000" issue). The Company has completed an
assessment of whether it will have to modify or replace portions of its software
and certain hardware so that its systems will function properly with respect to
dates in the year
10
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
2000 and thereafter. As a result of this assessment, the Company believes that
no significant modifications or conversions of existing software and certain
hardware will be required. All required modifications and conversions of
existing software and certain hardware are expected to be completed by June 30,
1999, which is prior to any anticipated impact on the Company's systems. The
Company believes that, with relatively minor modifications and conversions of
existing software and certain hardware, the Year 2000 issue will not pose
significant operational problems for its systems. However, if such modifications
and conversions are not made, or are not completed timely, the Year 2000 issue
could have a material impact on the operations of the Company.
The Company has gathered information about its significant suppliers, financial
institutions and others with whom the Company does business to determine the
extent to which the Company's systems are vulnerable to those third parties'
failure to remediate their own Year 2000 issues. The Company continues to
monitor the Year 2000 compliance status of such third parties, and no
significant issues with third parties' systems have been identified to date.
While the Company has no material systems that interface directly with those of
third parties, there can be no assurance that any failure within systems of
third parties will not have a material impact on the operations of the Company.
The Company does not expect expenditures related to new or upgraded software and
hardware required for Year 2000 compliance to be significant. In addition, the
Company does not expect to utilize significant external resources to assess,
test, modify or replace existing software and hardware for Year 2000 issues.
Accordingly, the total Year 2000 issue cost to the Company is expected to be
less than $100,000. Year 2000 issue costs incurred through March 31, 1999
totaled approximately $20,000.
The costs of the assessment and remediation of the Year 2000 issue and the date
on which the Company believes it will complete the modifications necessary to
resolve the Year 2000 issue are based on management's best estimates, which were
derived utilizing numerous assumptions of future events, including the continued
availability of certain resources and other factors. However, there can be no
assurance that these estimates will be achieved and actual results could differ
materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct all
relevant computer codes, and similar uncertainties.
The Company currently has no contingency plans in place in the event it does not
complete all phases of its Year 2000 program. The Company plans to evaluate the
status of completion in June 1999 and will develop contingency plans by August
1999.
11
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.44* Collaborative Research and License Agreement effective as of
February 5, 1999 between the Registrant and The Pharmacia &
Upjohn Company.
10.45* Collaborative Research and License Agreement effective as of
February 16, 1999 between the Registrant, F.Hoffmann-LaRoche
Ltd. and Hoffmann-LaRoche, Inc.
10.46 Loan and Security Agreement dated February 26, 1999 between
the Registrant and General Electric Capital Business Asset
Funding Corporation.
10.47* License Agreement effective as of March 10, 1999 between the
Registrant and Clontech Laboratories, Inc.
27.1 Financial Data Schedule related to the Financial Statements
for the period ended March 31, 1999.
- ----------
* The Company has requested confidential treatment with respect
to certain portions of this exhibit. Omitted portions have
been filed separately with the Securities and Exchange
Commission.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended March 31,
1999.
12
<PAGE>
AURORA BIOSCIENCES CORPORATION
MARCH 31, 1999
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
Aurora Biosciences Corporation
Date: May 14, 1999 By: /s/ John Pashkowsky
---------------------
John Pashkowsky
Senior Director, Finance and Treasurer
(on behalf of the Registrant and as
Registrant's Principal Financial and
Accounting Officer)
13
<PAGE>
Exhibit 10.44
COLLABORATIVE RESEARCH AND LICENSE
AGREEMENT
BETWEEN
THE PHARMACIA & UPJOHN COMPANY
AND
AURORA BIOSCIENCES CORPORATION
<PAGE>
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS AGREEMENT is entered into as of the Effective Date by and between THE
PHARMACIA & UPJOHN COMPANY, a company organized and existing under the laws of
the State of Delaware and having offices at 95 Corporate Drive, Bridgewater, New
Jersey, 08807-0995 ("P&U"), and AURORA BIOSCIENCES CORPORATION, a Delaware
corporation having offices at 11010 Torreyana Road, San Diego, California 92121
("Aurora").
RECITALS
WHEREAS, Aurora has expertise in the development of screening systems and
screening biologies/chemistries used therein; and
WHEREAS, Aurora has the scientific expertise and capacity to undertake the
alliance activities described below; and
WHEREAS, P&U desires screen development and screening services and has the
capability to undertake screening and development of drug products for the
prevention and treatment of human diseases and disorders.
NOW, THEREFORE, in consideration of the foregoing premises and of the covenants,
representations and agreements set forth below, the parties agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Affiliate" means any corporation, association or other entity, which directly
or indirectly controls, is controlled by or is under common control with the
party in question. As used herein, the term control shall mean direct or
indirect beneficial ownership of more than *** of the voting or income interest
in such corporation or other business entity.
"Agreement" means this agreement, together with all appendices, exhibits and
schedules hereto, and as the same may be amended or supplemented from time to
time hereafter by a written agreement duly executed by authorized
representatives of each party hereto.
"Aurora Copyrights" means all copyrights throughout the world Controlled by
Aurora.
"Aurora Patent Rights" means the Patent Rights Controlled by Aurora described in
Exhibit 2 attached hereto.
"Aurora Reporter" means any of the reporters described in Exhibit 1.2 attached
hereto.
"Aurora Screen Development Resource" shall have the meaning set forth in Section
2.2.1.
*** Confidential Treated Requested
1
<PAGE>
"Aurora Screening Program" shall have the meaning set forth in Section 2.1.5.
"Aurora Technology" means Technology Controlled by Aurora necessary for Aurora
Reporters.
"Collaborative Period" means the period during which the parties are developing
Collaborative Screens and ending on the first anniversary of the Effective Date
unless extended by mutual agreement or concluded earlier in accordance with
Section 9.
"Collaborative Screen" means ***.
"Collaborative Screen Program or CSP" shall have the meanings set forth in
Section 2.1.
"Compound" means ***.
"Compound Supply" shall have the meaning set forth in Section 2.1.6.
"Confidential Information" means all confidential information, data, and
materials received by either party from the other party pursuant to this
Agreement, which if in writing is marked confidential, and all information,
data, and materials developed pursuant to this Agreement which if in writing is
marked confidential, including, without limitation, Technology of each party,
subject to the exceptions set forth in Section 6.1.3.
"Control" or "Controlled" means, with respect to intellectual property,
possession by a party of the ability to grant a license or sublicense in
accordance with the terms of this Agreement, and without violating the terms of
any agreement by such party with any Third Party that is in effect on the
Effective Date.
"Copyrights" means rights that protect expression in a tangible form, such as
the U.S. Copyright Laws.
"CSP Steering Committee" shall have the meaning set forth in Section 2.1.1.
"CSP Work Plan" shall have the meaning set forth in Section 2.1.3.
"Derivative" means ***.
*** Confidential Treated Requested
2
<PAGE>
"Development Compound" means ***.
"Effective Date" means the date that this Agreement is signed by the last party
to sign below.
"FDA" shall mean the United States Food and Drug Administration, or any
successor agency having regulatory jurisdiction over the manufacture,
distribution and sale of drugs in the United States or equivalent in any other
jurisdiction.
"Hit" means ***.
"IND" means the first to occur of the following: (i) the filing with and
acceptance by the FDA of an Investigational New Drug application; or (ii) any
corresponding application filed in any country other than the United States; or
(iii) the first administration of a Development Compound into a human subject.
"Internal Research" means ***.
"Invention" means any new and useful process, machine, manufacture, or
composition of matter, or improvement thereto, whether or not patentable.
"Know-How" means information and data which is not generally known to the
public, comprising: designs, concepts, algorithms, formulae, software,
techniques, practices, processes, methods, knowledge, skill, experience,
expertise and technical information.
"Licensee" means a Third Party to whom P&U or its Affiliates grants a license,
sublicense or other right to manufacture, use, sell, offer for sale, distribute
and/or import one or more Products or Development Compounds.
"Licensor" means a Third Party that grants P&U or its Affiliates a license,
sublicense or other right to manufacture, use, sell, offer for sale, distribute
and/or import one or more Products or Development Compounds.
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"Manufacturing Cost" means the cost to Aurora and its Affiliates of raw
materials, energy, labor (salary and benefits) and reasonable *** in accordance
with generally accepted accounting methods consistently applied. If an item is
manufactured in whole or in part by a Third Party, the costs to be taken into
account shall be the amount paid to such Third Party plus any costs for raw
materials, energy, labor (salary and benefits) and reasonable overhead charges
that are incurred by Aurora in completing the manufacture and delivery.
"Materials" means any ***.
"NDA" means a new drug application or product license application, as
appropriate in the United States or a foreign equivalent in a foreign country.
"Net Sales" shall mean, with respect to Product(s), the gross amount invoiced to
customers for all Product(s) sold less the following items:
i) trade, quantity and cash discounts or rebates actually
allowed;
ii) credits, rebates, charge-back rebates, reimbursements or
similar payments granted or given to wholesalers and other
distributors, buying groups, health care insurance carriers,
governmental agencies and other institutions, and payments or
rebates granted or given in connection with government
sponsored health insurance programs but only to the extent
actually allowed;
iii) credits or allowances for rejection or return of Products
previously sold;
iv) any tax, tariff, duty or other governmental charge (other than
an income tax) levied on the sale, transportation or delivery
of a Product that is borne by the seller thereof and deducted
from sales under generally accepted accounting principles;
v) ***distribution allowance; and
vi) bad debt expense.
Such amounts shall be determined from the books and records of P&U maintained in
accordance with generally accepted accounting principles ("GAAP") consistently
applied.
"Patent Rights" means all U.S. or foreign (including regional authorities such
as the European Patent Office) regular or provisional patent applications,
including any continuation, continuation-in-part, or division thereof or any
substitute application therefor or equivalent thereof, and any patent issuing
thereon, including any reissue, reexamination or extension thereof and any
confirmation patent or registration patent or patent of additions based on any
such patent, containing one or more claims to an Invention (and in the case of
an issued patent, containing one or more Valid Claims), and for which a party
hereto owns or Controls, individually or jointly, any title thereto or rights
thereunder.
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"Phase III Clinical Trial" means that portion of a clinical development program
which provides for the testing of a Development Compound designed to assess the
safety and efficacy of such a product on a sufficient number of human patients
to support an NDA.
"Product" means ***.
"P&U Copyrights" means all copyrights throughout the world Controlled by P&U.
"P&U Patent Rights" means Patent Rights Controlled by P&U.
"P&U Target" shall have the meaning set forth in Section 2.1.1.
"P&U Technology" means Technology Controlled by P&U.
"Royalty Term" means, in the case of any Product and as to any country, the
period of time commencing on the first commercial sale for use or consumption of
such Product in such country and ***: (i) the date that ***, or the Licensors or
Licensees covering the manufacture, use or sale of such ***, or (ii) the
***after the date of such first commercial sale for use or consumption of such
Product in such country.
"Screening Party" means a Third Party with a written contract with P&U to
perform screening services using test chemicals or chemical libraries owned by
such Third Party that are not otherwise accessible to P&U or Aurora.
"Selection Procedure" of ***set forth in Section ***.
"Technology" means Materials and Know-How.
"Term" means the period beginning on the Effective Date and terminating in
accordance with this Agreement, as set forth in Section 9.
"Third Party" means any entity other than Aurora or P&U.
"Tracking Record" shall have the meaning set forth in Section 4.4.2.
"Validation" shall have the meaning set forth in Section 2.1.4.
"Validation Criteria" shall mean the parameters, standards, and results
established by the CSP Steering Committee for each Collaborative Screen.
"Valid Claim" means: (a) an issued claim under an issued patent within the
Patent Rights, which has not (i) expired or been canceled, (ii) been declared
invalid by an unreversed and unappealable decision of a court or other
appropriate body of competent jurisdiction, (iii) been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, and/or (iv) been
abandoned; or (b) a claim included in a pending patent application within the
Patent Rights
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that is being actively prosecuted in accordance with this Agreement and which
has not been (v) canceled, (vi) withdrawn from consideration, (vii) finally
determined to be unallowable by the applicable governmental authority for
whatever reason (and from which no appeal is or can be taken), or (viii)
abandoned.
2. COLLABORATIVE SCREEN PROGRAM
2.1. COLLABORATIVE SCREEN PROGRAM.
For a period of ***following the Effective Date, the parties will
collaborate in the development and validation of Collaborative Screens
as part of a development program (the "Collaborative Screen Program or
CSP"). P&U and Aurora will collaborate to develop Collaborative Screens
at Aurora for high throughput screening during the Collaborative
Period.
2.1.1. CSP STEERING COMMITTEES. No later than *** after the
Effective Date, the parties shall establish a CSP
Steering Committee (the "CSP Steering Committee").
The mission of the CSP Steering Committee is to
manage the experimental science and all other matters
of the CSP including the selection of targets for
screen development at Aurora (each such target
provided by P&U is a "P&U Target") as provided for
under Section 2.1.2. The CSP Steering Committee shall
consist of ***representatives designated by P&U and
***representatives designated by Aurora. Each
representative to the CSP Steering Committee will
have ***resulting in each party having exactly ***.
The Executive Steering Committee (ESC) shall consist
of the vice president of CNS research of P&U and vice
president research Aurora. Each representative to the
ESC will have *** resulting in each party having
exactly ***.
The CSP Steering Committee will meet no later than
***after the Effective Date and at least *** per year
using mutually agreed upon meeting locations and
formats including tele- and video-conferencing. On an
alternating basis, one party shall promptly prepare
and deliver to the members of the CSP Steering
Committee minutes in respect thereof, for review and
approval of both parties. Decisions in the CSP
Steering Committee will be made by unanimous vote, at
a meeting where all ***voting representatives are
present. Issues that do not reach unanimous agreement
within the CSP Steering Committee and remain
unresolved will be forwarded to the ESC within
***working days. The ESC will meet as soon as
possible and resolve the disagreement no later than
***days from the date of receiving notice from the
CSP Steering Committee of the dispute. Decisions in
the ESC will be made by unanimous vote, at a meeting
where both voting representatives are present. The
absence of a unanimous decision by the ESC, all
scientific matters regarding a CSP Work Plan (defined
below), including those
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relating to nomination or priority of molecular
targets for screen development or screening at Aurora
but not contract matters shall be decided by the ESC
representative from P&U.
2.1.2. SCREEN SELECTION. Attached as Exhibit A is a list of
***P&U Targets for Collaborative Screen development.
Additional potential P&U Targets may be presented by
P&U to Aurora during the Collaboration Period.
The ***and those subsequently proposed in writing by
P&U ***that P&U reasonably believes to be amenable
for development for a high throughput screen using
Aurora Technology. Aurora may reasonably request
further information regarding the ***. Within ***days
of first receiving such information, Aurora shall
notify P&U in writing in the event that Aurora
reasonably believes that the development of a
Collaborative Screen ***is not consistent with
Aurora's Third Party obligations or if Aurora
believes that the development of a *** not reasonably
be scientifically ***feasible based on available
information and that information provided by P&U. If
Aurora *** proposed by P&U, Aurora will provide P&U
with reasons for declining to work on the proposed
target, to the extent that Aurora does not have to
reveal confidential information of a Third Party,
waive attorney client privilege ***. Consequently,
***Aurora may not have to provide ***.
2.1.3. SCREEN DEVELOPMENT.
2.1.3.1 CSP WORK PLAN. The CSP Steering Committee
will coordinate the preparation of a work plan (a
"CSP Work Plan"), which shall set forth the
respective responsibilities of the parties for the
development of each Collaborative Screen, and which
must be approved by the CSP Steering Committee. Each
such CSP Work Plan will also contain a description of
the specific deliverables and documentation to be
produced, the Aurora Technology to be used, the dates
by which such activities are expected to be
accomplished by the parties, and *** for each
Collaborative Screen.
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2.1.3.2 ***. The CSP Steering Committee will *** CSP
Work Plan, and the design and approval of ***) for
each Collaborative Screen within a time frame set by
the CSP Steering Committee that can satisfy the
objectives of the CSP Steering Committee and the
parties. Promptly following the approval of each CSP
Work Plan, the parties will use reasonable efforts to
commence their respective duties under the CSP Work
Plan for the development of the applicable
Collaborative Screen. All work under a CSP Work Plan
shall be performed in accordance with the provisions
of this Agreement, and each party will *** to
complete its obligations under the CSP Work Plan as
expeditiously as practicable.
2.1.4. ***COLLABORATIVE SCREENS. When Aurora ***the ***, a
written report describing the Collaborative Screen
and the data demonstrating compliance with the CSP
Work Plan including the Validation Criteria shall be
provided by Aurora to the CSP Steering Committee. The
CSP Steering Committee will *** according ***
("Validation") or ***the additional work, if any,
***. Within ***of such ***a Collaborative Screen
developed by Aurora and subject to the availability
of equipment, Aurora will ***accordance with Section
***, and ***of initiating such ***, and when so
directed in writing by P&U and consistent with
Aurora's Third Party obligations, ***.
2.1.5 ***AURORA. During the Collaborative Period,
P&U***Collaborative Screens ***pursuant to Section
***. The Collaborative Screens *** Aurora shall be
indicated in the corresponding CSP Work Plans. For
each Collaborative Screen developed pursuant to a CSP
Work Plan of Section 2.1.3, ***, Aurora will use
reasonable efforts ***pursuant to Section ***. Aurora
shall, with regard to each Collaborative Screen, ***
determined by the CSP Steering Committee and *** CSP
Steering Committee (such ***in each Collaborative
Screen ***an "Aurora ***"), ***the ***, will be
subject to the availability of appropriate equipment
and the feasibility of performing such Collaborative
Screen on that equipment. During the Collaborative
Period, Aurora will use reasonable efforts to provide
P&U with ***. P&U may request that ***Aurora using a
***Collaborative Screen and Aurora will use
reasonable efforts provide *** to P&U which is
dependent on the ***to be used to generate any
***additional ***as provided for in Section *** The
***for any given ***Screen will be ***.
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2.1.6 ***. P&U shall, at its expense, supply Aurora with
***by P&U ***. In the event that P&U desires to have
*** a *** (including a ***) owned, accessed or
Controlled by Aurora, the parties agree to negotiate
in good faith the terms and conditions under which
***. Any ***an Aurora ***will be provided in ***in a
standard ***with ***. The *** for each ***in writing
in the CSP Work Plan. Aurora agrees not *** to any
Third Party or to use it for any purpose other than
developing ***. Aurora will ***upon written notice by
P&U.
2.2 AURORA SCREEN DEVELOPMENT RESOURCE, TECHNOLOGY ACCESS AND
PAYMENTS.
Aurora will provide access to Aurora Technology, Aurora
Reporters, Aurora Patent Rights, and the Aurora Screen
Development Resource at Aurora to P&U as follows:
2.2.1 AURORA SCREEN DEVELOPMENT RESOURCE.
During the Collaborative Period, upon payment by P&U
of ***provided for in Section ***, Aurora will commit
the ***full-time Aurora personnel each of whom shall
spend *** (the "Aurora Screen Development Resource")
and who will use reasonable efforts to develop ***.
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2.2.2. PAYMENTS FOR TECHNOLOGY ACCESS AND SUPPORT OF THE
SCREEN DEVELOPMENT RESOURCE.
As ***for use of the Aurora Screen Development
Resource under Section 2.2.1 and access and ***Aurora
Technology to use Collaborative Screens ***Section
***, P&U shall pay ***. Such amount shall be payable
within ***of the ***.
2.2.3. PAYMENTS ***AURORA.
As ***for the ***during the Collaborative Period
pursuant ***, P&U will pay Aurora a non-refundable
payment *** *** *** the *** paid within ***and the
***of the Effective Date. For *** in ***, P&U will
pay Aurora, in advance, ***, ***, P&U will pay Aurora
in advance*** and, for ***, P&U will pay Aurora, in
advance, ***. Such payments will be *** related to
***.
2.3 MILESTONES AND ROYALTIES.
In addition to such payments as are made by P&U to Aurora
pursuant to Section 2.2.2 and 2.2.3 hereof, the following
payments shall be made to Aurora for each Collaborative
Screen:
2.3.1 MILESTONES. When ***following milestones, P&U will
*** and within ***of such ***, P&U will pay Aurora
the amount corresponding to such milestone. For each
Collaborative Screen, P&U *** milestone *** of
***that ***the following milestones***of milestones
will be paid ***.
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<TABLE>
<CAPTION>
Milestone Amount ($US)
--------- ------------
<S> <C>
***
</TABLE>
2.3.2. ROYALTIES. With respect to each Product, P&U shall
pay a royalty on *** of such Product during the
Royalty Term for such Product. The royalty applicable
is the product of the worldwide ***summed from each
applicable country multiplied by the royalty rate of
***for each applicable quarter.
2.4 SUPPLY ***.
So long as P&U has made payments in accordance with Section
2.2. and 2.3 as applicable, at P&U's written request, Aurora
will use reasonable efforts to supply within *** after receipt
of a written purchase order therefor, ***use of ***Aurora as
provided for in Section ***. P&U will be charged for all
supplies so delivered at Aurora's Manufacturing Cost ***. P&U
will pay for ***.
***.
2.6. DEVELOPMENT OF PRODUCTS.
P&U will be responsible for all pre-clinical and clinical development,
including all regulatory filings, of Hits and Development Compounds
arising out of this Agreement at no expense to Aurora. P&U shall use
reasonable efforts, consistent with commercial business practices, to
conduct the activities associated with the development of any
Development Compound, all regulatory activities relating to the
manufacture, use or sale of any Development Compound or Product, and
the commercialization and marketing of any Product in any ***.
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3. INTELLECTUAL PROPERTY RIGHTS
3.1 GRANT OF RIGHTS FROM AURORA TO P&U.
3.1.1. LICENSE TO COLLABORATIVE SCREENS DEVELOPED BY AURORA.
Aurora, upon payment under Section 2.2, grants to P&U
***.
3.1.2 Except as expressly licensed in Section 3.1.1 P&U
covenants not to use the Aurora Patent Rights, Aurora
Reporters and Aurora Technology.
3.1.3 ***
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***.
3.2. GRANT OF RIGHTS FROM P&U TO AURORA.
P&U grants to Aurora a ***.
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3.3. OWNERSHIP OF INTELLECTUAL PROPERTY AND PROPERTY.
3.3.1. TRANSFER OF RIGHTS. All rights not expressly licensed
or assigned by P&U are retained by P&U. All rights
not expressly licensed or assigned by Aurora are
retained by Aurora. Except as otherwise expressly
provided in this Agreement, nothing in this Agreement
is intended to convey or transfer ownership by one
party to the other of any rights, title or interest
in any Confidential Information, Technology,
copyrights or Patent Rights owned or Controlled by a
party. Except as expressly provided for in this
Agreement, nothing in this Agreement shall be
construed as a license or sublicense by one party to
the other of any rights in any Technology,
copyrights, or Patent Rights owned or Controlled by a
party.
3.3.2. P&U INVENTIONS. P&U shall own all Inventions and
other Technology made solely by its employees and
agents, and all patent applications and patents
claiming such Inventions and other Technology. If P&U
has a license pursuant to Sections 3.1.1 or 3.1.2,
Aurora shall own such Inventions and other Technology
that consists of improvements relating to an Aurora
Reporter or Aurora Technology and P&U will assign the
same to Aurora.
3.3.3 AURORA INVENTIONS. Aurora shall own all Inventions
and other Technology made solely by its employees and
agents, and all patent applications and patents
claiming such Inventions and other Technology,
provided, however, that P&U will own all Inventions
and other Technology for P&U's Compounds (including
Hits, Derivatives, and Development Compounds from the
Compound Supply) and uses thereof conceived by Aurora
in performance of this Agreement and Aurora will
assign the same to P&U.
3.3.4. JOINT INVENTIONS. During the period from the
Effective Date to three (3) years thereafter, all
Inventions and other Technology conceived jointly by
employees or agents of P&U and employees or agents of
Aurora shall be owned by Aurora and P&U; provided,
however, that if a) P&U has a license pursuant to
Sections 3.1.1 or 3.1.2, Aurora will solely own such
Inventions and other Technology that consist of
improvements relating to an Aurora Reporter or Aurora
Technology and P&U will assign the same to Aurora and
b) P&U will solely own all Inventions and other
Technology relating to P&U's Compounds and
therapeutic uses thereof conceived by Aurora in
performance of this Agreement and Aurora will assign
the same to P&U.
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3.3.5 OTHER INVENTIONS. Any Inventions not included in
Sections ***be owned by their inventors.
3.3.6. INVENTORSHIP AND ASSIGNMENT. Inventorship of
patentable inventions shall be determined by U.S.
patent law. P&U and Aurora agree to execute all
documentation necessary to perfect all assignments of
Inventions, Technology and Patent Rights.
4. PAYMENTS OF ROYALTIES, ACCOUNTING FOR ROYALTIES AND RECORDS.
4.1. PAYMENT AND REPORTING.
The royalties due under Article 2 and as follows in this Article 4,
shall be paid within ***after the end of each calendar quarter period
in which such royalties are earned during the Royalty Term for each
Product. With each such quarterly payment, P&U shall furnish Aurora a
royalty statement setting forth on a country-by-country basis the
relevant sales information, including the total number of units of each
such Product sold and other information employed to calculate ***for
such Product.
4.2. CURRENCY OF PAYMENT.
All payments to be made under this Agreement, including the royalties
payable to Aurora by P&U, shall be paid in U.S. dollars by wire
transfer or other mutually acceptable means to a bank account
designated by Aurora. Translation of sales recorded in local currencies
to U.S. dollars will be performed in a manner consistent with P&U's
normal practices used to prepare its audited financial statements for
internal and external reporting purposes, which uses a widely accepted
source of published exchange rate.
4.3. TAXES WITHHELD.
Any income or other tax that P&U or any of its Affiliates, Licensees or
Licensors is required by a government agency to withhold and pay on
behalf of Aurora with respect to the royalties payable under this
Agreement shall be deducted from and offset against said royalties
prior to remittance to Aurora; provided, however, that in regard to any
tax so deducted, P&U shall give or cause to be given to Aurora such
assistance as may reasonably be necessary to enable Aurora to claim
exemption therefrom or credit therefor, and in each case shall furnish
Aurora proper evidence of the taxes paid on Aurora's behalf.
4.4. RECORDS.
4.4.1. ***ROYALTY CALCULATIONS. During the Royalty Term and
for ***from the date of each payment of royalties,
P&U shall keep complete and accurate records of sales
and all other information necessary to calculate
***of each Product in sufficient detail to allow the
accrued royalties to be determined accurately in
accordance with GAAP. Aurora, with reasonable written
notice to P&U, shall have the right to cause Aurora's
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nationally recognized independent, certified public
accountant to audit such records at the place or
places of business where such records are customarily
kept in order to verify the accuracy of the reports
of Net Sales and royalty payments. Such accountant
shall execute a confidentiality agreement prior to
entering P&U's premises, obligating such accountant
to keep all information disclosed to it confidential
and shall only be permitted to disclose to Aurora the
extent of any discrepancy between royalty payments
made by P&U hereunder and the actual royalty required
to be so paid. Aurora shall bear the full cost of
such audit unless such audit discloses a variance of
more than *** from the amount of the royalties due
under this Agreement, in which event, P&U shall bear
the full cost of such audit. Aurora agrees not to
disclose Confidential Information concerning royalty
payments and reports, and all information learned in
the course of any audit or inspection, except to the
extent necessary for Aurora to reveal such
information in order to enforce its rights under this
Agreement or if disclosure is required by law.
***
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4.4.2.2.Upon ***.
4.5. TRADE SECRET MILESTONES AND ROYALTY.
The parties acknowledge ***, either or both of which the parties
reasonably believe will lessen the time required to bring
pharmaceutical products to market and increase the efficiency of drug
discovery and development processes and technologies. Additionally, the
parties acknowledge that Aurora may not own or Control patent
applications or patents covering the manufacture, sale, use or
importation of a particular Development Compound or Product. ***.
5. INTELLECTUAL PROPERTY ENFORCEMENT AND DEFENSE OF CLAIMS
5.1. INTELLECTUAL PROPERTY ENFORCEMENT.
P&U and Aurora shall have the right, but not the obligation, to bring
proceedings against any Third Party for the inappropriate use,
including patent infringement, of Technology or Patent Rights solely
owned or Controlled by it, and at its own risk and expense. If one
party brings such action such party shall be entitled to control such
action, hire and retain counsel, make decisions, settle on any terms,
and retain any and all awards or damages obtained in any such
proceeding. At the request and expense of either party, the other party
shall give the requesting party all reasonable assistance required to
file and conduct any such proceeding.
5.2. DEFENSE OF INFRINGEMENT CLAIMS FOR P&U HITS, DEVELOPMENT
COMPOUNDS AND PRODUCTS.
Aurora will cooperate with P&U, at P&U's expense, in the defense of any
suit, action or proceeding against P&U and P&U's Affiliates or Aurora
alleging the infringement of the intellectual property rights of a
Third Party by reason of the manufacture, use or sale of a Hit,
Derivative, Compound, Development Compound, Product from a Compound
screened in a Collaborative Screen by P&U or Aurora. Each party shall
give the other party prompt written notice of the commencement of any
such suit, action, proceeding or claim of infringement. Aurora shall
give P&U full and sole authority, information and assistance necessary
to defend, hire counsel, make decisions or settle on any terms any such
suit, action or proceeding and Aurora shall execute all documents,
provide pertinent records, and take all other actions, including
requiring persons within its control to give testimony, which may be
reasonably required in connection with the defense or settlement of
such litigation.
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5.3. DEFENSE OF INFRINGEMENT CLAIMS FOR AURORA TECHNOLOGY AND
AURORA PATENT RIGHTS.
P&U will cooperate with Aurora, at Aurora's expense, in the defense of
any suit, action or proceeding against Aurora or P&U alleging the
infringement of the intellectual property rights of a Third Party by
reason of Aurora's or P&U's use of any Aurora Patent Rights and Aurora
Technology licensed to P&U under this Agreement. The parties shall
notify each other promptly in writing of the commencement of any such
suit, action, proceeding or claim of infringement. P&U shall give to
Aurora full and sole authority, information and assistance necessary to
defend, hire counsel, make decisions or settle on any terms any such
suit, action or proceeding and P&U shall execute all documents, provide
pertinent records, and take all other actions, including requiring
persons within its control to give testimony, which may be reasonably
required in connection with the defense or settlement of such
litigation.
6. TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY
6.1. CONFIDENTIALITY.
6.1.1. Subject to the terms and conditions of this
Agreement, P&U and Aurora each agree that, during the
term of this Agreement and for five (5) years
thereafter, it will keep confidential, and will cause
its Affiliates to keep confidential, all Confidential
Information that is disclosed to it or to any of its
Affiliates by the other party in connection with the
performance of this Agreement. Neither P&U nor Aurora
nor any of their respective Affiliates shall use the
other party's Confidential Information except as
expressly permitted in this Agreement.
6.1.2. P&U and Aurora each agree that any disclosure of the
other's Confidential Information to any officer,
employee, contractor, consultant, sublicensee or
agent of the other party or of any of its Affiliates
shall be made only if and to the extent necessary to
carry out its responsibilities under this Agreement
and to exercise the rights granted to it hereunder,
shall be limited to the extent consistent with such
responsibilities and rights, and shall be provided
only to such persons or entities who are bound to
maintain same in confidence in a like manner as the
party receiving same hereunder is so required. Each
party shall use reasonable efforts to take such
action, and to cause its Affiliates to take such
action, to preserve the confidentiality of each
other's Confidential Information, which shall be the
same efforts as it would customarily take to preserve
the confidentiality of its own Confidential
Information.
Either party may be required to disclose some
Confidential Information of the other party in a
patent application filed related to Compounds,
Technology or uses thereof. The disclosing party
shall limit this type of
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information to the minimum necessary and the
disclosing party shall inform the non-disclosing
party of exactly what Confidential Information will
be disclosed in the patent application at least two
(2) weeks before such application is filed.
Upon termination of this Agreement, each party, upon
the other's request, will return all the Confidential
Information received from the other party pursuant to
this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request of
the other party. 6.1.3.
Confidential Information shall not include any
information, which the receiving party can prove by
competent evidence:
i) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party,
generally known or available;
ii) is known by the receiving party at the time of
receiving such information, as evidenced by its
records;
iii) is hereafter furnished to the receiving party
without restriction as to disclosure or use by a
Third Party lawfully entitled to so furnish same;
iv) is independently developed by the employees,
agents or contractors of the receiving party without
the aid, application or use of the disclosing party's
Confidential Information; or
v) is the subject of a written permission to disclose
provided by the disclosing party; or
vi) is provided by the disclosing party to a Third
Party without restriction as to confidentiality.
A party may also disclose Confidential Information of
the other where required to do so by law or legal
process, provided that, in such event, the party
required to so disclose shall give maximum practical
advance written notice of same to the other party and
will cooperate with the other party's efforts to
seek, at the request and expense of the other party,
all confidential treatment and protection for such
disclosure as is permitted by applicable law.
The parties agree that the material financial terms
of this Agreement will be considered Confidential
Information of both parties. Notwithstanding the
foregoing, either party may disclose such terms in
legal proceedings or as are required to be disclosed
in its financial statements, by law, or under
strictures of confidentiality to bona fide potential
sublicensees.
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Either party shall have the further right to disclose
the material financial terms of this Agreement under
strictures of confidentiality to any potential
acquirer, merger partner, bank, venture capital firm,
or other financial institution to obtain financing.
The parties agree that information developed pursuant
to the methods and use of a Collaborative Screen will
be considered Confidential Information of both
parties and shall be subject to the confidentiality
requirements of this Section 6.1. Notwithstanding the
foregoing, either party may disclose and use
information developed pursuant to the methods and use
of a Collaborative Screen that is not specific to a
target proposed by P&U for screen development and
screening under strictures of confidentiality to bona
fide sublicensees.
6.2. PUBLICATION OF RESULTS.
Subject to Section 6.1 hereof, results and data obtained by either
party in the course of a Collaborative Screen Program through use of an
Aurora Reporter may be submitted for publication by P&U in accordance
with P&U's customary practices, provided, however, that P&U shall
credit Aurora in such publication as the developer and/or provider of
the technology that produced, in part, the published results or data.
P&U shall send a copy of the proposed publication and shall allow
Aurora ***from the date of receipt in which to determine whether such
publication contains subject matter for which patent protection should
be sought prior to disclosure, or otherwise contains Aurora
Confidential Information. If no answer is received from Aurora within
***of receipt of the proposed publication, P&U shall be free to submit
such proposed publication.
6.3. PUBLICITY.
Except as required by law and as provided in this Article 6, neither
party may make any public announcement or otherwise disclose the terms
of this Agreement without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
*** Confidential Treated Requested
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7. PATENT PROSECUTION AND COPYRIGHTS
7.1. PATENTS.
The control and expense of the filing, prosecution (including an
opposition or interference) and maintenance of patents and patent
applications claiming Inventions will be the sole responsibility of the
party filing the patent application and the party not filing the patent
application will cooperate in such filing, prosecution and maintenance
of the validity of such patent position. P&U and Aurora will cooperate
in the filing, prosecution and maintenance of jointly owned patents and
patent applications claiming inventions conceived or made pursuant to
activities under Article 2, and share equally in the expenses incurred
thereto.
7.2. COPYRIGHTS.
The parties agree to treat and handle, to the maximum practical extent,
any copyrights owned or Controlled by a party in the same manner as
Patent Rights owned or Controlled by such party.
8. WARRANTIES AND INDEMNIFICATION
8.1. MUTUAL REPRESENTATIONS AND WARRANTIES.
The parties make the following representations and warranties to each
other:
8.1.1. CORPORATE POWER. Each party hereby represents and
warrants that such party (a) is duly organized and
validly existing under the laws of the state of its
incorporation and has full corporate power and
authority to enter into this Agreement and to carry
out the provisions hereof; (b) has the requisite
power and authority and the legal right to own and
operate its property and assets, to lease the
property and assets it operates under lease, and to
carry on its business as it is now being conducted;
and (c) is in compliance with all requirements of
applicable law, except to the extent that any
noncompliance would not have a material adverse
effect on the properties, business, financial or
other condition of it and would not materially
adversely affect its ability to perform its
obligations under the Agreement.
8.1.2. DUE AUTHORIZATION. Each party hereby represents and
warrants that such party (a) has the requisite power
and authority and the legal right to enter into the
Agreement and to perform its obligations hereunder;
and (b) has taken all necessary action on its part to
authorize the execution and delivery of the Agreement
and to authorize the performance of its obligations
hereunder and the grant of rights extended by it
hereunder.
*** Confidential Treated Requested
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<PAGE>
8.1.3. BINDING AGREEMENT. Each party hereby represents and
warrants to the other that (a) this Agreement has
been duly executed and delivered on its behalf and is
a legal and valid obligation binding upon it and is
enforceable in accordance with its terms; (b) the
execution, delivery and performance of this Agreement
by such party does not conflict with any agreement,
instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor
violate any law or regulation of any court,
governmental body or administrative or other agency
having authority over it; and (c) all necessary
consents, approvals and authorizations of all
governmental authorities and other persons required
to be obtained by it in connection with the Agreement
have been obtained.
8.1.4. ***.
8.2. WARRANTIES AND AURORA TECHNOLOGY.
Aurora represents and warrants to P&U as of the Effective Date the
following:
8.2.1. To the best knowledge of Aurora: (a) Aurora has the
lawful right to license (or sublicense as the case
maybe) to P&U in accordance with this Agreement
Aurora Patent Rights, Aurora Technology and Aurora
Copyrights; (b) the licensed Patent Rights were
properly filed and prosecuted; and (c) no Third Party
suits exist, to which licensed Patent Rights and
Copyrights are subject.
8.2.2. Except as set forth in Section 8.2.1 above, Aurora
(including its officers, employees and agents)
expressly disclaims any representations and
warranties, whether express or implied, relating to
Aurora Patent Rights, Aurora Copyrights and Aurora
Technology. Aurora further disclaims i) any express
or implied warranty of merchantability or fitness
for a particular purpose of Aurora Technology,
Aurora Copyrights and Aurora Patent Rights, ii) any
express or implied warranty that the practice of
Aurora Copyrights, Aurora Technology or Aurora
Patent Rights will not infringe a patent, copyright,
trademark or other right of a Third Party, and iii)
any express or implied warranty regarding the
patentability of any Aurora Technology, including
Aurora Technology claimed in patent applications as
part of Aurora Patent Rights.
*** Confidential Treated Requested
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<PAGE>
8.3. AURORA INDEMNIFICATION.
Aurora hereby agrees to indemnify, defend ***.
8.4. WARRANTIES AND P&U TECHNOLOGY.
P&U warrants to Aurora as of the Effective Date the following:
8.4.1. To the best knowledge of P&U as of the Effective
Date: (a) P&U has the lawful right to license to
Aurora in accordance with this Agreement P&U Patent
Rights and P&U Technology; (b) the P&U Patent Rights
were properly filed and prosecuted; and (c) no Third
Party suit exists relating to P&U Patent Rights, and
P&U Copyrights.
8.4.2. Except as set forth in Section 8.4.1 above, P&U
(including its officers, employees and agents)
expressly disclaim any representations and
warranties, whether express or implied, relating to
P&U Patent Rights, P&U Copyrights and P&U Technology.
P&U further disclaims: i) any express or implied
warranty of merchantability or fitness for a
particular purpose of P&U Technology or P&U Patent
Rights; ii) practice of P&U Copyrights, P&U
Technology or P&U Patent Rights will not infringe a
patent, copyright, trademark or other right of a
Third Party; and iii) the patentability of any P&U
Technology, including P&U Technology claimed in
patent applications as part of P&U Patent Rights.
*** Confidential Treated Requested
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<PAGE>
8.5. P&U INDEMNIFICATION.
P&U hereby agrees to indemnify, ***.
***.
9. TERM AND TERMINATION
9.1. TERM.
The term of this Agreement will begin on the Effective Date and shall
continue until there is no longer a royalty obligation owed by P&U to
Aurora unless terminated earlier in accordance with the provisions of
Sections 9.2, 9.3 or 9.4 hereof.
9.2. TERMINATION BY MUTUAL AGREEMENT.
The parties may at any time terminate this Agreement, in whole or in
part, by written agreement executed by both Aurora and P&U. In such
event, the document effecting such termination shall specify the
continuation or termination of any license rights granted hereunder, as
well as any other terms agreed to by both parties.
*** Confidential Treated Requested
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<PAGE>
9.3. TERMINATION FOR CAUSE.
Either party shall have the right to terminate this Agreement at any
time for a material breach of this Agreement by the other party,
provided that the non-breaching party shall have given the breaching
party ***written notice of the breach and intention to terminate this
Agreement in the absence of a cure within ***of receipt of such notice
by the breaching party. Upon termination of this Agreement for cause,
all licenses and sublicenses granted in accordance with this Agreement
shall be terminated and all Materials transferred in accordance with
this Agreement shall be returned to the supplying party or destroyed at
the discretion of such party. The non-breaching party, upon termination
of this Agreement may seek actual or general damages and remedies
available to it at law or in equity. NO PUNITIVE OR CONSEQUENTIAL
DAMAGES MAY BE SOUGHT BY EITHER PARTY.
9.4. EFFECT OF EXPIRATION OR TERMINATION.
The obligations and rights of the parties under Sections 2.3, 2.5 and
3.3 Articles 4, 6, 9 and 10, thereof, as well as any provisions, which,
by their intent or meaning are intended to so survive, shall survive
termination or expiration of this Agreement. Except as otherwise
expressly provided in this Agreement, the rights and obligations of the
parties under Article 2 hereof shall terminate and be of no further
force or effect whatsoever upon any termination of this Agreement. Upon
expiration or other termination of the Agreement all licenses granted
will terminate and Materials and Collaborative Screens will be
destroyed or returned, at the sole discretion of the providing party,
to the party providing such Materials and Collaborative Screens within
sixty (60) days.
10. MISCELLANEOUS
10.1. ASSIGNMENT.
Either party may assign its rights or obligations under this Agreement
in connection with the sale of all or substantially all of its assets,
or may otherwise assign its rights or obligations under this Agreement
with the prior written consent of the other party; provided, however,
if such assignment is to an Affiliate that is wholly owned by Pharmacia
& UpJohn, Inc. such consent shall not be necessary. This Agreement
shall survive any merger or consolidation of either party with or into
another party and no consent for any such merger, consolidation or
similar reorganization shall be required hereunder. In the event of
such merger, consolidation or similar reorganization or in the event of
a sale of all assets, no intellectual property rights of the acquiring
or acquired company shall be included in the technology licensed
hereunder.
10.2. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.
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<PAGE>
10.3. FORCE MAJEURE.
Neither party shall lose any rights hereunder or be liable to the other
party for damages or losses on account of failure of performance by the
defaulting party if the failure is occasioned by war, fire, explosion,
flood (e.g. El Nino), earthquake, strike, lockout, embargo, act of God,
or any other similar cause beyond the control of the defaulting party,
provided that the party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure and thereafter
takes all reasonable steps to mitigate any such delay in performance
hereunder and any damages that may be incurred by the other party
thereby.
10.4. NOTICES.
Any notices or communications provided for in this Agreement to be made
by either of the parties to the other shall be in writing, in English,
and shall be made by prepaid air mail or overnight carrier with return
receipt addressed to the other at its address set forth below. Any such
notice or communication may also be given by hand, or facsimile to the
appropriate designation. Notices shall be sent:
If to P&U, to: Pharmacia & Upjohn
95 Corporate Drive
Bridgewater, NJ 08807-1265
Facsimile number: (908) 306-4498
Attention: Douglas R. Morton, Ph.D., Group Vice President
Technology Acquisition and Skillbase Development
If to Aurora, to: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
Facsimile number: (619) 452-5723
Attention: Paul Grayson
Senior Vice President, Corporate Development
provided that if such notice or communication relates to an amendment
to this Agreement or to any notice pursuant to Article 9 hereof, a copy
shall also be sent to:
If to P&U, to: General Counsel
If to Aurora, to: John D. Mendlein, Ph.D., J.D.
General Counsel, Vice President, Intellectual
Property
*** Confidential Treated Requested
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<PAGE>
Either party may by like notice specify or change an address to which
notices and communications shall thereafter be sent. Notices sent by
mail, facsimile or cable shall be effective upon receipt and notices
given by hand shall be effective when delivered.
10.5. GOVERNING LAW AND JURISDICTION.
This Agreement shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and to
be performed within such state.
10.6. WAIVER.
Except as specifically provided for herein, the waiver from time to
time by either of the parties of any of their rights or their failure
to exercise any remedy shall not operate or be construed as a
continuing waiver of same or any of the other of such party's rights or
remedies provided in this Agreement.
10.7. SEVERABILITY.
If any term, covenant or condition of this Agreement or the application
thereof to any party or circumstance shall, to any extent, be held to
be invalid or unenforceable, then the remainder of this Agreement, or
the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the
fullest extent permitted by law; and the parties hereto covenant and
agree to renegotiate any such term, covenant or application thereof in
good faith in order to provide a reasonably acceptable alternative to
the term, covenant or condition of this Agreement or the application
thereof that is invalid or unenforceable, it being the intent of the
parties that the basic purposes of this Agreement are to be
effectuated.
10.8. INDEPENDENT CONTRACTORS.
It is expressly agreed that Aurora and P&U shall be independent
contractors and that the relationship between the parties shall not
constitute a partnership or agency of any kind. Neither Aurora nor P&U
shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding
on the other, without the prior written authorization of the other
party to do so.
10.9. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.10. ENTIRE AGREEMENT.
This Agreement between the parties of even date herewith sets forth all
of the covenants, promises, agreements, warranties, representations,
conditions and understandings between the parties hereto, and
supersedes and terminates all prior agreements and understanding
between the parties, with respect to the subject matter hereof. There
are no covenants, promises, agreements, warranties, representations
conditions or
*** Confidential Treated Requested
27
<PAGE>
understandings, either oral or written, between the parties other than
as set forth herein and therein. No subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the parties
hereto unless reduced to writing and signed by the respective
authorized officers of the parties. This Agreement shall not be
strictly construed against either party hereto. Any conflict between
the terms set forth in the text of this Agreement and the terms of any
Exhibit hereto shall be resolved in favor of the text of this
Agreement.
10.11. NO THIRD PARTY BENEFICIARIES.
No third party, including any employee of any party to this Agreement,
shall have or acquire any rights by reason of this Agreement. Nothing
contained in this Agreement shall be deemed to constitute the parties
partners with each other or any third party.
10.12. CONSTRUCTION.
The term "Article" or "Section" can refer to any single paragraph level
found herein or any collection of multiple paragraphs thereunder.
10.13. DISPUTE RESOLUTION.
The parties recognize that disputes as to certain matters may from time
to time arise during the term of this Agreement which relate to either
party's rights and/or obligations hereunder. It is the objective of the
parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to arbitration. The parties agree that
prior to any arbitration concerning this Agreement, a member of P&U's
senior management and Aurora's president will meet in person or by
video-conferencing in a good faith effort to resolve any disputes
concerning this Agreement. Within ***of a formal request by either
party to the other, any party may, by written notice to the other, have
such dispute referred to their respective officers designated or their
successors, for attempted resolution by good faith negotiations, such
good faith negotiations to begin within thirty (30) days after such
notice is received. Any dispute arising out of or relating to this
Agreement which is not resolved between the parties or the designated
officers of the parties pursuant to Section 10.13 shall be resolved by
final and binding arbitration conducted in *** (unless the parties
mutually agree to another location) under the then current Licensing
Agreement Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall be conducted by ***arbitrators who are
knowledgeable in the subject matter which is at issue in the dispute.
One arbitrator is selected by P&U and one arbitrator is selected Aurora
and the third arbitrator is appointed by the AAA. In conducting the
arbitration, the arbitrators shall determine what discovery will be
permitted, consistent with the goal of limiting the cost and time which
the parties must expend for discovery (and provided that the
arbitrators shall permit such discovery they deem necessary to permit
an equitable resolution of the dispute), ensure that the total time of
the arbitration from filing to a final decision or executed settlement
agreement is less than ***, and be able to decree any and all relief of
an equitable nature, including but not limited to such relief as a
temporary restraining order, a preliminary injunction, a permanent
injunction, specific performance or repletion of property. The
arbitrators
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28
<PAGE>
shall also be able to award actual or general damages, but shall not
award any other form of damage (e.g., consequential, punitive or
exemplary damages). The parties shall share equally the arbitrator's
fees and expenses pending the resolution of the arbitration unless the
arbitrator, pursuant to its right but not its obligations, requires the
non-prevailing party to bear all or any portion of the costs of the
prevailing party. The decision of the arbitrator shall be final and may
be sued on or enforced by the party in whose favor it runs in any court
of competent jurisdiction at the option of such party. Notwithstanding
anything to the contrary in this Section 10.13, either party may seek
immediate injunctive or other interim relief from any court of
competent jurisdiction with respect to any breach of Articles 3 or 6
hereof, or otherwise to enforce and protect the patent rights,
copyrights, trademarks, or other intellectual property rights owned or
Controlled by such party. In addition, arbitration shall not be used to
resolve disputes about patent rights. Patent right disputes including
but not limited to disputes concerning patent ownership, claim
language, claim scope and issues of validity shall be settled in a
court of law. Any arbitration ruling that relies on an interpretation
of patent rights shall have no binding effect in a court of law on any
patent rights related to this Agreement, unless such patent rights have
been adjudicated in a court of law. In no event shall a demand for
arbitration be made after the date when the institution of a legal or
equitable proceeding based on such claim, dispute or other matter in
question would be barred by the applicable statute.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
The Pharmacia & Upjohn Company Aurora Biosciences Corporation
By: By:
------------------------------- ----------------------------------
Name: Douglas R. Morton, Ph.D. Name: Paul A. Grayson
Title: Group Vice President Title: Senior Vice President
Technology Acquisition Corporate Development
and Skillbase Development
Date: Date:
------------------------------ --------------------------------
*** Confidential Treated Requested
29
<PAGE>
LIST OF EXHIBITS
***
*** Confidential Treated Requested
30
<PAGE>
EXHIBIT 1.2
***
*** Confidential Treated Requested
31
<PAGE>
EXHIBIT 2
***
*** Confidential Treated Requested
32
<PAGE>
EXHIBIT A
***
*** Confidential Treated Requested
33
<PAGE>
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
AMONG
F. HOFFMANN-LA ROCHE LTD,
HOFFMANN-LA ROCHE INC.
AND
AURORA BIOSCIENCES CORPORATION
1
<PAGE>
This Agreement is entered into as of *** ("Effective Date") by and among
F.Hoffmann-La Roche Ltd, a company organized and existing under the laws of
Switzerland and having offices at CH-4070, Basel, Switzerland ("Roche
Basel"), Hoffmann-La Roche Inc., a company organized and existing under the
laws of New Jersey ("Roche Nutley" collectively, Roche Basel and Roche Nutley
are referred to as "Roche"), and Aurora Biosciences Corporation, a Delaware
corporation having offices at 11010 Torreyana Road, San Diego, California
92121 ("Aurora").
RECITALS
WHEREAS, Aurora has expertise in the development of screening systems and
screening biologies/chemistries used therein; and
WHEREAS, Aurora has the scientific expertise and capacity to undertake the
alliance activities described below; and
WHEREAS, Roche desires screen development and services and has the capability to
undertake screening and development of drug products for the prevention and
treatment of human diseases and disorders.
NOW, THEREFORE, in consideration of the foregoing premises and of the covenants,
representations and agreements set forth below, the parties agree as follows:
***Confidential Treatment Requested 2
<PAGE>
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Accounting Period" means a calendar half commencing respectively on January
1 and July 1, each being the first day of an Accounting Period, and finishing
respectively on June 30 and December 31, each being the last day of an
Accounting Period.
"Adjusted Gross Sales" shall mean, with respect to Product(s), the gross
amount invoiced to non-affiliated Third Parties for arm's length sale of the
Product(s) by Roche, its Affiliates, its Licensors, its Licensees or Third
Parties otherwise obtaining rights to Products from Roche less deductions of
returns (including withdrawals and recalls), rebates (price reductions,
including Medicaid and similar types of rebates e.g. chargebacks), volume
(quantity) discounts, discounts granted at the time of invoicing actually
allowed, sales taxes and other taxes directly linked to and included in such
invoice.
"Affiliate" means any corporation, association or other entity, which
directly or indirectly controls, is controlled by or is under common control
with the party in question. As used herein, the term control shall mean
direct or indirect beneficial ownership of more than 50% of the voting or
income interest in such corporation or other business entity***.
***Confidential Treatment Requested 3
<PAGE>
"Agreement" means this agreement, together with all appendices, exhibits and
schedules hereto, and as the same may be amended or supplemented from time to
time hereafter by a written agreement duly executed by authorized
representatives of each party hereto.
"Aurora Copyrights" means all copyrights throughout the world Controlled by
Aurora.
"Aurora Patent Rights" means the Patent Rights Controlled by Aurora described
in Exhibit D attached hereto.
"Aurora Reporter" means any of the reporters described in Exhibit B attached
hereto.
"Aurora Target" means ***.
"Aurora Technology" means Technology Controlled by Aurora necessary for
Aurora Reporters.
"Collaborative Screen" means ***.
"Collaboration Term" means the period commencing on the Effective Date and
ending on the ***Agreement under Section *** or (ii) the later of ***of the
Effective Date, (2) ***First ***, if ***, or (3) the ***Year, if ***.
***Confidential Treatment Requested 4
<PAGE>
"Combination Product" means a Product containing a Development Compound and
one or more ingredients that are therapeutically active alone or in
combination.
"Compound" means ***.
"Confidential Information" means all Information, excluding Information that
the receiving party can prove by competent evidence:
i) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
ii) is known by the receiving party at the time of receiving
such information, as evidenced by its records;
iii) is hereafter furnished to the receiving party without
restriction as to disclosure or use by a Third Party lawfully entitled
to so furnish same;
iv) is independently developed by the employees, agents or
contractors of the receiving party without the aid, application or use
of the disclosing party's Information; or
v) is the subject of a written permission to disclose provided
by the disclosing party; or
***Confidential Treatment Requested 5
<PAGE>
vi) is provided by the disclosing party to a Third Party without
restriction as to confidentiality.
"Control" or "Controlled" means, with respect to intellectual property,
possession by a party of the ability to grant a license or sublicense in
accordance with the terms of this Agreement, and without violating the terms
of any agreement by such party with any Third Party on the Effective Date.
"Copyrights" means rights that protect expression in a tangible form, such as
the U.S. Copyright Laws.
"CPI" Consumer Price Index for Urban Consumers for the United States, using
1999 as the base year.
"CSP" means a program for developing Collaborative Screens.
"CSP Steering Committee" means the committee that is to manage the screen
development and validation work required by the CSP.
"CSP Work Plan" means the plan generated by the CSP Steering Committee to
guide the actions of the parties in developing a Collaborative Screen.
"Derivative" means ***.
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<PAGE>
"Development Compound" means ***.
"Effective Date" means the date defined in the first paragraph of page 1 of
this Agreement.
"Exclusivity" means ***.
"FDA" means the United States Food and Drug Administration, or any successor
agency having regulatory jurisdiction over the manufacture, distribution and
sale of drugs in the United States or its equivalent in any other
jurisdiction.
"***Year" means the ***.
***Confidential Treatment Requested 7
<PAGE>
"Hit" means ***.
"IND" means the first to occur of the following: (i) the filing with the FDA
of an Investigational New Drug application; or (ii) any corresponding
application filed in any Major Country; or (iii) the first administration of
a Development Compound into a human subject.
"Information" means all information, data, and materials received by one
party from the other party pursuant to this Agreement, and all information,
data, and materials developed pursuant to this Agreement, including, without
limitation, Technology of each party.
"Initial Period" means ***.
"Internal Research" means ***.
"Invention" means any new and useful process, machine, manufacture, or
composition of matter, or improvement thereto, whether or not patentable.
***Confidential Treatment Requested 8
<PAGE>
"Know-How" means information and data which is not generally known to the
public, including designs, concepts, algorithms, formulae, software,
techniques, practices, processes, methods, knowledge, skill, experience,
expertise and technical information.
"Licensee" means a Third Party to whom Roche or its Affiliates grants a
license, sublicense or other right to manufacture, use, sell, offer for sale,
distribute and/or import one or more Products or Development Compounds.
"Licensor" means a Third Party that grants Roche or its Affiliates a license,
sublicense or other right to manufacture, use, sell, offer for sale,
distribute and/or import one or more Products or Development Compounds, and
has or has obtained the right to sell such Product(s).
"Major Country" means the U.S., Japan, Canada, United Kingdom, France,
Germany, Italy, or Spain.
"Manufacturing Cost" means the cost to Aurora and its Affiliates of raw
materials, energy, labor (salary and benefits) and reasonable ***in
accordance with generally accepted accounting methods consistently applied.
If an item is manufactured in whole or in part by a Third Party, the costs to
be taken into account shall be the amount paid to such Third Party plus any
costs for raw materials, energy, labor (salary and benefits) and reasonable
manufacturing overhead charges that are incurred by Aurora in completing the
manufacture and delivery.
***Confidential Treatment Requested 9
<PAGE>
"Materials" means any ***.
"NDA" means a new drug application or product license application, as
appropriate in a Major Country.
"Net Sales" means, with respect to Product(s), the amount of Adjusted Gross
Sales of the Product ***of such Adjusted Gross Sales for those sales related
deductions which are not accounted for on a product by product basis (e.g.
outward freights, postage charges, transportation insurance, packaging
materials for dispatch of goods, custom duties, bad debt, discounts granted
later than at the time of invoicing, cash discounts and other direct sales
expenses). Such amounts shall be determined from the books and records of
Roche maintained in accordance with generally accepted accounting principles
("GAAP") consistently applied.
"Patent Rights" means all U.S. and foreign (including regional authorities
such as the European Patent Office) regular or provisional patent
applications, including any continuation, continuation-in-part, or division
thereof or any substitute application therefor or equivalent thereof, and any
patent issuing thereon, including any reissue, reexamination or extension
thereof and any confirmation patent or registration patent or patent of
additions based on any such patent, and which a party hereto owns or
Controls, individually or jointly, any title thereto or rights thereunder.
***Confidential Treatment Requested 10
<PAGE>
"Phase 1" means the first phase of human clinical trials of a drug or
biological as required by FDA designed to determine the metabolism and
pharmacologic actions of the drug in humans, the side effects associated with
increasing doses, and, if possible, to gain early evidence on effectiveness.
"Phase 2" means the second phase of human clinical trials of a drug or
biological as required by FDA designed to evaluated the effectiveness of the
drug for a particular indication or indications in patients with the disease
or condition under study and to determine the common short-term side effects
and risks associated with the drug.
"Phase 3" means the third phase of human clinical trials of a drug or
biological as required by FDA designed to gather information about the
effectiveness and safety that is needed to evaluate the overall benefit-risk
relationship of the drug and to provide an adequate basis for physician
labeling.
"Product" ***.
"Pre-market Royalty One" ***.
***Confidential Treatment Requested 11
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"Pre-market Royalty Two" means ***.
"Pre-market Royalty Three" ***.
"Pre-market Royalty Four" ***.
"Reuters System" means the average of the last bid and last ask rate of
foreign currency exchange for a given day as quoted by Reuters Limited or an
equivalent to be mutually agreed to in writing by the parties.
"Roche Copyrights" means all copyrights throughout the world Controlled by
Roche.
"Roche Patent Rights" means Patent Rights Controlled by Roche.
"Roche Target" means ***.
"Roche Technology" means Technology Controlled by Roche.
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"Royalty Term" means, in the case of any Product and as to any country, the
period of time commencing on the first commercial sale for use or consumption
of such Product in such country ***: (i) the date that there ***or (ii)
***after the date of such first commercial sale for use or consumption of
such Product in such country.
"Screen Number" means a sequential number given to each Collaborative Screen.
"Second Extended Year" means ***immediately ***Year.
"***.
"***.
"Technology" means Materials and Know-How.
"Term" means the period beginning on the Effective Date and terminating in
accordance with this Agreement, as set forth in Section 9.
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"Third Party" means any entity other than Aurora or its Affilates, or Roche
or its Affiliates.
"Validation" means CSP Steering Committee approval of a Collaborative Screen
as meeting the Validation Criteria.
"Validation Criteria" means the parameters, standards, and results
established by the CSP Steering Committee for each Collaboration Screen,
which must be met in order for that Collaboration Screen to be validated.
2. COLLABORATIVE SCREEN PROGRAM
2.1. Collaborative Screen Program.
The parties will collaborate in the development and validation of
Collaborative Screens as part of a CSP during the Collaborative Term. For
the Initial Period, Roche and Aurora will collaborate with the intention to
develop ***as listed in Exhibit A***, the *** under the terms described in
further detail in Section 2.6. The Parties will mutually agree in writing to
the nature *** therefore during the ***as outlined in Section 2.1.2 and
Section 2.2.3, respectively.
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2.1.1. CSP Steering Committees.
No later than ***after the Effective Date, the parties shall establish a CSP
Steering Committee. The mission of the CSP Steering Committee is to manage
the screen development and validation work required by the CSP including the
selection of Aurora Targets and Roche Targets as provided for under Section
2.1.2. The CSP Steering Committee shall decide on the principle aspects of
the CSP, including (a) planning and monitoring of the collaboration, and (b)
assigning tasks and responsibilities under the CSP Workplans. The CSP
Steering Committee shall consist of ***representatives designated by Roche
and ***representatives designated by Aurora. Each representative to the CSP
Steering Committee will have one vote resulting in each party having exactly
***.
The CSP Steering Committee will meet no later than ***after the Effective
Date and at *** per year at Aurora's facilities in San Diego, or using
mutually agreed upon meeting formats including tele- and video-conferencing.
On an alternating basis, one party shall promptly prepare and deliver to the
members of the CSP Steering Committee minutes in respect thereof, for review
and approval of both parties. Decisions in the CSP Steering Committee will
be made by ***, at a meeting where all ***representatives are present. Any
disagreement that cannot be resolved by ***vote of the CSP Steering Committee
shall be referred to the appropriate officers of Aurora and Roche for
resolution. If the officers of Aurora and Roche cannot reach resolution on
planning and monitoring of the collaboration, and assigning tasks and
responsibilities under the CSP Workplans, ***. For all ***outlined in
Section ***.
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2.1.2. ***.
Attached as Exhibit A is a list of ***by Roche for collaborative screen
development during the Initial Period. ***potential ***shall be presented by
Roche thereafter on a time frame established by the CSP Steering Committee;
provided, however, Roche shall provide Aurora with such additional lists, if
applicable, *** before the first anniversary of the Effective Date and, if
applicable, ***before the second anniversary of the Effective Date.
The ***in Exhibit A and ***thereafter ***to be amenable for ***. At the time
Roche provides the ***to Aurora, Roche shall also provide a written proposal
describing each ***. No more than ***in Exhibit A or otherwise provided for
in this Section 2.1.2 for the ***unless Roche agrees in writing that any such
***. Aurora may reasonably request further information regarding ***. Within
***of first receiving such information, Aurora shall notify Roche in writing
that it ***for ***, or ***because Aurora reasonably believes that the ***
based on the ***with Aurora's Third Party obligations or if Aurora believes
that the development ***information and that provided by Roche, ***. If
Aurora ***Roche, Aurora will provide ***work on the ***, to the extent that
Aurora does not have to reveal confidential information of a Third Party,
waive attorney client privilege or contravene an obligation to a Third Party.
If Aurora informs Roche *** obligation of Aurora, Roche ***and conditions,
if any, that would satisfy ***and if ***negotiations results in a written
agreement ***obligations then Aurora ***. The parties agree that ***may not
have to provide ***. The CSP Steering Committee will evaluate and ***within
***of Aurora's notification to Roche using a procedure decided in writing by
the CSP Steering Committee.
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2.1.3. ***.
2.1.3.1 CSP Work Plan. The CSP Steering Committee will coordinate the
preparation of a CSP Work Plan, which shall set forth the respective
responsibilities of the parties for the development of each Collaborative
Screen, and which must be approved by the CSP Steering Committee. Each such
CSP Work Plan will also contain a description of the specific deliverables
and documentation to be produced, the Aurora Technology to be used, the party
responsible ***shall be accomplished by the parties, and ***for each
Collaborative Screen and whether a screen is a ***.
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2.1.3.2 ***. The CSP Steering Committee will coordinate screen development
(including the preparation and management of a CSP Work Plan, and the design
and approval of ***) for each Collaborative Screen within a time frame set by
the CSP Steering Committee that can satisfy the objectives of the CSP
Steering Committee and the partners. Promptly following the approval of each
CSP Work Plan, the parties ***under the CSP Work Plan for the development of
the applicable Collaborative Screen. All work under a CSP Work Plan shall be
performed in accordance with the provisions of this Agreement, and each party
will use its reasonable efforts to complete its obligations under the CSP
Work Plan as expeditiously as practicable.
2.1.3.3 Post-Collaboration Term Screen Development. After the
Collaboration Term, Roche and Aurora agree to negotiate in good faith for
access to Aurora Technology and Patent Rights.
2.1.4. Deployment of Collaborative Screens by Roche.
When Aurora or Roche completes the development of a Collaborative Screen, a
written report describing the Collaborative Screen and the data demonstrating
compliance with the CSP Work Plan including the Validation Criteria shall be
provided by Aurora and Roche to the CSP Steering Committee. The CSP Steering
Committee will approve the report and accept each Collaborative Screen
according to the Validation Criteria ("Validation") or decide on the
additional work, if any, necessary for Validation. ***. Within ***of such
Validation for a Collaborative Screen developed by Aurora, Aurora will ship
the Collaborative Screen to Roche or a designated Roche Affiliate by means
mutually agreed in writing by the parties and will advise the Roche personnel
in the use of the Collaborative Screen on its in-house screening operation
using the personnel provided for in Section 2.2.2. After the Validation of a
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Collaborative Screen, Roch may request to Aurora in writing, and the parties
may agree, that such Collaborative Screen be used to sereen ***.
2.2 Screen Development Resource, Training and Support, Technology
Access and Payments. During the Collaborative Term Aurora will provide access
to Aurora Technology, Aurora Reporters, Aurora Patent Rights, and Screen
Development at Aurora as follows:
2.2.1 Screen Development Resource.
For each year, upon payment by Roche of the funding provided for in Section
2.2.3, Aurora will use reasonable effort and a screen development resource of
***Aurora personnel each of which shall spend at least ***per year to develop
the Collaborative Screens ***as provided for in Section 2.1.3.
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2.2.2 ***.
2.2.3. Payments for Technology Access and Support of the Screen
Development Resource.
As ***for the screen development resources at Aurora under Sections 2.2.1 and
2.2.2, and access to Aurora Technology to develop Collaborative Screens at
Roche, Roche shall *** of which ***shall be payable ***of the Effective Date
***shall be payable ***after the Effective Date, ***. If Roche ***under
Section ***, then Roche shall ***to Aurora for each ***the sum of ***adjusted
to reflect adjustments to the CPI using 1999 as the base year, paid in two
equal installments, at the ***of each ***, for the resources equivalent to
those described in Sections 2.2.1 and 2.2.2.; ***Aurora for each ***the ***
adjusted to reflect adjustments to the CPI using 1999 as the base year,
payable at the beginning date of each ***, for ***personnel each of which
shall spend at least ***per year as described in section 2.2.1 and 2.2.2 and
an additional amount to be negotiated in good faith by Aurora and Roche for
each Collaborative Screen ***, transfer and ***. Such ***upon Validation of
any Collaborative Screen as provided for in Section 2.1.4 ***. The parties
may agree to increase in the quantity of additional resources and payments
required, subject to Aurora's resource availability. For any ***in the
resource under Section 2.2.1 and Section 2.2.2 there will be a proportionate
increase in payment, adjusted to also reflect adjustments to CPI using 1999
as the base year.
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2.3 Pre-market Royalties and Royalties.
In addition to such payments as are made by Roche to Aurora pursuant to
Section 2.2.3 hereof, the following payments shall be made to Aurora for each
Collaborative Screen:
2.3.1 For each Development Compound that reaches the following Pre-market
Royalties, Roche will promptly notify Aurora of the same: Pre-market Royalty
One, Pre-market Royalty Two, Pre-market Royalty Three, and Pre-market Royalty
Four***, Roche will pay Aurora the amount in Exhibit C corresponding to such
Pre-market Royalty and the particular Screen Number; ***Development Compound
was identified based on the use of ***the amount that Roche will pay for any
given Pre-market Royalty for such Development Compound will ***Exhibit C
corresponding to such Pre-market Royalty; provided, further, that such
Development Compound was not identified based on the use of a Collaborative
Screen that was not ***. For example, when a Development Compound for Screen
Number ***reaches Pre-market Royalty One, ***; provided, however, if Screen
Number ***was a ***, as provided for above, Roche will pay ***. It is
understood that for any given ***. It is further understood that for any
given Development Compound taken into clinical development, ***. For
example, ***.
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2.3.2 Royalties. With respect to each Product, Roche shall pay a royalty on
***of such Product to a Third Party during the Royalty Term for such Product.
The royalty applicable for each Product, is obtained by multiplying the
worldwide ***by the royalty rate from Exhibit C corresponding to the highest
Screen Number issued during the Collaboration Term; provided, however, if a
Product incorporates a Development Compound identified based on the use of a
***the Royalty applicable for such Product will be obtained using ***of the
amount in Exhibit C corresponding to such Screen Number. For example, if
during Collaboration Term the highest Screen Number issued was ***then the
royalty rate would be ***provided, however, if Screen Number ***was a ***, as
provided for above, ***the royalty rate ***. The parties agree that for both
Pre-Market Royalties and royalties on Products such payments will be owed to
Aurora even if Roche or its Affiliates licenses, assigns or otherwise
transfers rights to such Hits, Derivatives, Development Compounds or Products
to Third Parties.
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2.3.3. Combination Product. In case of Combination Product, the parties
shall meet approximately ***prior to commercial launch of such Combination
Product to negotiate in good faith and agree to an appropriate adjustment to
***to reflect the relative significance of the Development Compound and the
other pharmaceutically active agent(s) contained in the Combination Product.
If, after good faith negotiations (not to exceed ***), the Parties can not
agree to an appropriate adjustment, ***shall be equal to ***of the
Combination Product multiplied by a fraction, the numerator of which is the
reasonable fair market value of the Development Compound and the denominator
of which is the reasonable fair market value of all pharmaceutically active
agents contained in the Combination Product. In the event the fair market
value of the Development Compound or the other pharmaceutically active agents
contained in the Combination Product cannot be determined, then the
manufacturing cost of the respective Development Compound and active agents
shall be used in such calculation.
2.3.4. Loss of Exclusivity and Third Party Patents. If a Product being sold
in a given country fails to achieve or maintain Exclusivity in that country,
then the royalties payable by Roche to Aurora for sales of Product in that
country shall be reduced by ***until such a time that Exclusivity is restored
and in addition, if Roche makes payments to a Third Party for Patent Rights
that cover the Product in order to sell Product, then Roche may reduce the
amount payable to Aurora by the amount of any such payments***; provided,
however such reductions shall not total more ***under Section 2.3.2
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2.4 Supply of Aurora Reporters.
If Roche has made payments in accordance with Section 2.2.3, then at Roche's
written request, Aurora will use reasonable efforts to supply within ***after
receipt of such request, Materials pertaining to the Aurora Reporters as
Roche may require solely for the development and use also after the
Collaborative Term of Collaborative Screens by Roche or its Affiliates for
Roche Targets and the use of Collaborative Screens developed by ***as
provided for in Section 2.1.2. Roche will be charged for all supplies so
delivered on the terms listed in Exhibit Ewhich are based on Aurora's
Manufacturing Cost plus ***. Roche will pay for all Materials so ordered
within ***after delivery to Roche ***.
2.5. Development of Products.
Roche will be responsible for all pre-clinical and clinical development,
including all regulatory filings, of Hits, Derivatives and Development
Compounds arising out of this Agreement at no expense to Aurora. Roche shall
use reasonable efforts, consistent with commercial business practices, to
conduct the activities associated with the development of any Development
Compound, all regulatory activities relating to the manufacture, use or sale
of any Development Compound or Product, and the commercialization and
marketing of any Product in any country. All regulatory filings made or filed
by Roche for any Development Compound or Product shall be owned solely by
Roche. At Roche's request and expense, Aurora shall cooperate to the extent
reasonably necessary to permit Roche to perform the foregoing activities.
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2.6 ***.
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3. INTELLECTUAL PROPERTY RIGHTS
3.1 Grant of Rights from Aurora to Roche.
3.1.1. License to Collaborative Screens developed by Aurora.
Aurora, upon payment under Sections 2.2.3, grants to Roche ***.
3.1.2. ***. Aurora, upon payment under Section 2.2.3 and CSP Steering
Committee approval of a CSP Work Plan for a Collaborative Screen to be developed
by Roche, grants to Roche and its Affiliates, ***.
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3.1.3 Except as expressly licensed in Section 3.1.1 and 3.1.2 Roche
covenants not to use the Aurora Patent Rights, Aurora Reporters, and Aurora
Technology.
3.2. ***.
3.3. Ownership of Intellectual Property and Property
3.3.1. Transfer of Rights. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement is intended to convey or transfer
ownership by one party to the other of any rights, title or interest in any
Confidential Information, Technology, copyrights or Patent Rights owned or
Controlled by a party. Except as expressly provided for in this Agreement,
nothing in this Agreement shall be construed as a license or sublicense by
one party to the other of any rights in any Technology, copyrights, or Patent
Rights owned or Controlled by a party. All rights not expressly licensed or
assigned by Aurora are retained by Aurora. All rights not expressly licensed
or assigned by Roche are retained by Roche.
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3.3.2. Roche Inventions. Roche shall own all Inventions and other
Technology made solely by its employees and agents, and all patent
applications and patents claiming such Inventions and other Technology. If
Roche has a license pursuant to Sections 3.1.1 or 3.1.2, Aurora shall own
such Inventions and other Technology that consists of improvements relating
to an Aurora Reporter and Roche will assign the same to Aurora.
3.3.3 Aurora Inventions. Aurora shall own all Inventions and other
Technology made solely by its employees and agents, and all patent
applications and patents claiming such Inventions and other Technology,
except those Inventions and other Technology relating to Roche's Compounds
(including Hits, Derivatives, Development Compounds, and Products) and uses
thereof conceived by Aurora during the Collaboration Term in the performance
of this Agreement.
3.3.4. Joint Inventions. During the period from the Effective Date to the
end of the Collaboration Term, all Inventions and other Technology conceived
jointly by employees or agents of Roche and employees or agents of Aurora
shall be owned by Aurora and Roche; provided, however, that if a) Roche has a
license pursuant to Sections 3.1.1 or 3.1.2, Aurora will solely own such
Inventions and other Technology that consists of improvements relating to an
Aurora Reporter and Roche will assign the same to Aurora and b) Roche will
solely own all Inventions and other Technology relating to Roche's Compounds
(including Hits, Derivatives, Development Compounds, and Products) and
therapeutic uses thereof conceived by Aurora during the Collaboration Term in
the performance of this Agreement and Aurora ***.
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3.3.5 Roche shall own all Inventions and other Technology relating to
Roche's Compounds (including Hits, Derivatives, Development Compounds, and
Products), including uses thereof conceived by Aurora during the
Collaboration Term in the performance of this Agreement. Any such Inventions
or Technology shall be assigned by Aurora to Roche.
3.3.6 Other Inventions. Any Inventions not included in Section 3.3.4 (a)
or 3.3.4 (b) above shall be owned by their inventors.
3.3.7. Inventorship and Assignment. Inventorship of patentable inventions
shall be determined by the applicable patent law. Roche and Aurora agree to
execute all documentation necessary to perfect all assignments of Technology
and Patent Rights.
4. PAYMENTS OF ROYALTIES, ACCOUNTING FOR ROYALTIES AND RECORDS.
4.1. Payment and Reporting.
The royalties due under Section 2 and as follows in this Section 4, shall be
calculated semi-annually as of June 30and December 31, each being the end
date of an Accounting Period, and shall be paid within ***after the end of
each Accounting Period in which such royalties are earned during the Royalty
Term for each Product. With each such semi-annual payment, Roche shall
furnish Aurora a royalty statement setting forth on a country-by-country
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basis the relevant sales information, including at least the following
information:
(a) Total Adjusted Gross Sales for each Product subject to
royalty sold by Roche and its Affiliates, and
(b) Total royalty payable to Aurora.
4.2. Currency of Payment.
All payments to be made under this Agreement, including the royalties payable
to Aurora by Roche, shall be paid in U.S. dollars by wire transfer or other
mutually acceptable means to a bank account designated by Aurora. Whenever
for the purpose of calculating royalties conversion from any foreign currency
shall be required, such conversion shall be made as follows: (i) for Roche
and its Affiliates when calculating the Adjusted Gross Sales, the amount of
such sales in foreign currencies shall be converted into Swiss Francs as
computed using Roche's Swiss Francs Sales Statistics for the countries
concerned, using the average monthly rate of exchange at the time for such
currencies as retrieved from the Reuters System; and (ii) for a Licensee or
Licensor when calculating the Adjusted Gross Sales, the amount of such sales
shall be reported by the Licensee or Licensor to Roche within ***from the end
of an Accounting Period, after having converted each applicable monthly sales
in foreign currency into the Swiss Franc using the average rate of exchange
published in the Wall Street Journal or some other source agreed upon in
writing by Roche and such Licensee or Licensor and approved by Aurora, which
approval shall not be unreasonably witheld, for any particular country for
each respective month of the applicable Accounting Period. For both 4.2 (I)
and 4.2 (ii), when calculating the royalties on ***, such conversion shall be
at the average rate of the Swiss Franc to the United States currency as
retrieved from the Reuters System for the applicable Accounting Period.
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4.3. Taxes Withheld.
All amounts owed under this Agreement shall be paid net of all applicable
taces, fees, and other charges excluding only taxes on a party's income. Any
income or other tax that Roche or any of its Affiliates, Licensees or
Licensors is required by a government agency to withhold and pay on behalf of
Aurora with respect to the royalties payable under this Agreement shall be
deducted from and offset against said royalties prior to remittance to
Aurora; provided, however, that in regard to any tax so deducted, Roche shall
give or cause to be given to Aurora such assistance as may reasonably be
necessary to enable Aurora to claim exemption therefrom or credit therefor,
and in each case shall furnish Aurora proper evidence of the taxes paid on
Aurora's behalf.
4.4. Records.
4.4.1. ***and Royalty Calculations. Roche shall keep, and shall require
its Affiliates to keep, full, true and accurate books of account containing
all particulars that may be necessary for the purpose of calculating all
royalties payable to Aurora. Such books of accounts shall be kept at their
principal place of business.
At Aurora's expense, Aurora or its authorized independent public accountant
has the right to engage Roche's independent public accountant to perform, on
behalf of Aurora or its independent public accountant, an audit, conducted in
accordance with generally accepted auditing standards in the United States of
America, of such books and records of Roche that are deemed necessary by
Roche's independent public accountants to report on Net Sales of the Product
for the period or periods requested by Aurora.
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Such audit shall not be performed more frequently than once per calendar year
nor more frequently than once with respect to records covering any specific
period of time, upon at least ***prior written notice, and shall be
conducted during regular business hours in such a manner as to not
unnecessarily interfere with Roche's normal business activities.
All information, data, documents and abstracts herein referred to shall be
used only for the purpose of verifying royalty statements or compliance with
this Agreement, shall be treated as Roche Confidential Information subject to
the obligations of this Agreement and need neither be retained more than
***after completion of an audit hereof, if an audit has been requested; nor
more than ***from the end of the calendar year to which each shall pertain;
nor more ***the date of termination of this Agreement.
The failure of Aurora to request verification of any royalty calculation
during the period when records have to be retained shall be considered
acceptance of the accuracy of such reporting.
In the event that such audit shall indicate that in any calendar year the
royalties which should have been paid by Roche are at least ***greater than
those which were actually paid by Roche, then Roche shall promptly pay the
underpaid amount to Aurora and shall also reimburse Aurora for the reasonable
cost of such audit.
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In the event that such audit shall indicate that in any calendar year the
royalties which were actually paid by Roche are greater than those which
should have been paid, then Aurora shall promptly reimburse Roche with such
overpaid amount.
4.4.2. Tracking Records for Collaborative Screens.
4.4.2.1. The compounds, screens and targets tested using a Collaborative
Screen will be recorded and stored by Roche using its customary means and in
a computer searchable database on a storage device. The information stored
will include the target, screen type, the concentration, structure, Roche
number or alternative originator index number and activity of the compound
tested, and date of testing. Such records and records of any Hits,
Derivativers, Development Compound, or any compound subject to additional
screening, in vivo testing, computer modeling, medicinal chamistry or an IND
application or foreign equivalent to date will able be stored by Roche in a
computer searchable file or data base that may be separate from other Roche
data not related to Collaborative Screens, collectively referred to as the
tracking file (the "Tracking File"). Upon written request by Aurora, Roche
will create an annual written report of the Tracking File and provide such
report to Aurora within ***of such written request; provided, however, such
report will only refer to such chemicals by the associated Roche number or
alternative originator index number. Aurora may also request and Roche will
create a similar annual report which shall refer to chemicals by structure
and Roche number or alternative originator index number; provided however,
such report is to be accesible only by an independent consultant appointed by
Aurora and agreed to by Roche, and subject to a confidential relationship
with Roche, to inspect the Tracking File for the sole purpose of
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determining the attainment of a pre-market royalty or royalty under Section
2.3.1 and 2.3.2, respectively. The Tracking File shall be securely retained
for no less than ***from the last use of a Collaborative Screen. In
additional to the annual report when a Hit or Derivative is selected to
become a Development Compound, Roche will disclose the existence of this
compound to Aurora under an obligation of non-disclosure to Third Parties
within ***.
4.4.2.2. Upon reasonable request by Aurora and at a minimum once per year,
Roche will provide Aurora with a summary of the status of Development Compounds
and Products that may be used to calculate royalties or Pre-market Royalties.
4.5. Trade Secret Pre-market Royalties and Royalty.
The parties acknowledge that the principal value contributed by Aurora under
this Agreement is the enhanced probability of identifying leads for Products,
such as human pharmaceutical products (or other products having commercial
value), and the potential to generate multiple leads, either or both of which
the parties reasonably believe will lessen the time required to bring
pharmaceutical products to market and increase the efficiency of drug
discovery and development processes and technologies. Additionally, the
parties acknowledge that Aurora may not own or Control patent applications or
patents covering the manufacture, sale, use or importation of a particular
Development Compound or Product. Roche acknowledges and agrees that the
value it receives hereunder is in the access and use of a Collaborative
Screen or Aurora Technology. Accordingly, Roche agrees to pay those
Pre-market Royalties, royalties and other amounts during the Royalty Term as
provided for in this Agreement.
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5. INTELLECTUAL PROPERTY ENFORCEMENT AND DEFENSE OF CLAIMS
5.1. Intellectual Property Enforcement.
Roche and Aurora shall have the right, but not the obligation, to bring
proceedings against any Third Party for the inappropriate use, including
patent infringement, of Technology or Patent Rights solely owned or
Controlled by it, and at its own risk and expense. If one party brings such
action such party shall be entitled to control such action, hire and retain
counsel, make decisions, settle on any terms, and retain any and all awards
or damages obtained in any such proceeding. At the request and expense of
either party, the other party shall give the requesting party all reasonable
assistance required to file and conduct any such proceeding.
5.2. Defense of Infringement Claims for Roche Hits, Derivatives,
Development Compounds and Products.
Aurora will cooperate with Roche, at Roche's expense, in the defense of any
suit, action or proceeding against Roche and Roche's Affiliates alleging the
infringement of the intellectual property rights of a Third Party by reason
of the manufacture, use or sale of a Hit, Derivative, Compound, Development
Compound, Product or a derivative of any Roche chemical screened by a
Collaborative Screen. Each party shall give the other party prompt written
notice of the commencement of any such suit, action, proceeding or claim of
infringement. Aurora shall give Roche full and sole authority, information
and assistance necessary to defend, hire counsel, make decisions or settle on
any terms any such suit, action or proceeding and Aurora shall execute all
documents, provide pertinent records, and take all other actions, including
requiring persons
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within its control to give testimony, which may be reasonably required in
connection with the defense or settlement of such litigation.
5.3. Defense of Infringement Claims for Aurora Technology and Aurora
Patent Rights.
Roche will cooperate with Aurora, at Aurora's expense, in the defense of any
suit, action or proceeding against Aurora alleging the infringement of the
intellectual property rights of a Third Party by reason of Aurora's or
Roche's use of any Aurora Patent Rights and Aurora Technology licensed to
Roche under this Agreement. The parties shall notify each other promptly in
writing of the commencement of any such suit, action, proceeding or claim of
infringement. Roche shall give to Aurora full and sole authority, information
and assistance necessary to defend, hire counsel, make decisions or settle on
any terms any such suit, action or proceeding and Roche shall execute all
documents, provide pertinent records, and take all other actions, including
requiring persons within its control to give testimony, which may be
reasonably required in connection with the defense or settlement of such
litigation.
6. TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY
6.1. Confidentiality.
6.1.1. Subject to the terms and conditions of this Agreement, Roche and
Aurora each agree that, during the term of this Agreement and for
***thereafter, it will not disclose to any Third Party, and will cause its
Affiliates to not disclose to any Third Party, all Confidential Information
that is disclosed to it or to any of its Affiliates by the other party in
connection with the performance of this Agreement. Neither Roche nor Aurora
nor any of their respective Affiliates shall use the other party's
Confidential Information except as expressly permitted in this Agreement.
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6.1.2. Roche and Aurora each agree that any disclosure of the other's
Confidential Information to any officer, employee, contractor, consultant,
sublicensee or agent of the other party or of any of its Affiliates shall be
made only if and to the extent necessary to carry out its responsibilities
under this Agreement and to exercise the rights granted to it hereunder,
shall be limited to the extent consistent with such responsibilities and
rights, and shall be provided only to such persons or entities who are bound
to maintain same in confidence in a like manner as the party receiving same
hereunder is so required. Each party shall use reasonable efforts to take
such action, and to cause its Affiliates to take such action, to preserve the
confidentiality of each other's Confidential Information, which shall be the
same efforts as it would customarily take to preserve the confidentiality of
its own Confidential Information.
Either party may be required to disclose some Confidential
Information in a patent application filed related to Compounds or uses
thereof or other Technology. The disclosing party shall limit this type of
information to the minimum necessary and the disclosing party shall inform
the non-disclosing party of exactly what Confidential Information will be
disclosed in the patent application at least two weeks before such
application is filed.
Each party, upon the other's request, will return all the
Confidential Information received from the other party pursuant to this
Agreement, including all copies and extracts of documents, within ***of the
request of the other party following any termination of this Agreement,
except for one (1) copy which may be kept for the purpose of ascertaining and
complying with continuing confidentiality obligations under this Agreement.
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A party may also disclose Confidential Information of the other where
required to do so by law or legal process, provided that, in such event, the
party required to so disclose shall give maximum practical advance written
notice of same to the other party and will cooperate with the other party's
efforts to seek, at the request and expense of the other party, all
confidential treatment and protection for such disclosure as is permitted by
applicable law.
The parties agree that the material financial terms of this Agreement will be
considered Confidential Information of both parties. Notwithstanding the
foregoing, either party may disclose such terms in legal proceedings or as
are required to be disclosed in its financial statements, by law, or under
strictures of confidentiality to bona fide potential sublicensees. Either
party shall have the further right to disclose the material financial terms
of this Agreement under strictures of confidentiality to any potential
acquirer, merger partner, bank, venture capital firm, or other financial
institution to obtain financing.
The parties agree that information developed pursuant to the development and
use of a Collaborative Screen will be considered Confidential Information of
both parties and shall be subject to the confidentiality requirements of this
Section 6.1. Notwithstanding the foregoing, either party may disclose and
use information developed pursuant to the development and use of a
Collaborative Screen that is not specific to a target selected by Roche for
screen development and screening under strictures of confidentiality to bona
fide sublicensees; provided, however such party must receive written approval
from the other party for such disclosure and such approval will not be
unreasonably withheld.
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6.2. Publication of Results.
Subject to Section 6.1 hereof, results and data obtained by either party in
the course of a Collaborative Screen Program through use of an Aurora
Reporter may be submitted for publication by Roche in accordance with Roche's
customary practices, provided, however, that Roche shall credit Aurora in
such publication as the developer and/or provider of the technology that
produced, in part, the published results or data. Roche shall send a copy of
the proposed publication and shall allow Aurora ***from the date of receipt
to determine whether such publication contains subject matter for which
patent protection should be sought prior to disclosure, or otherwise contains
Aurora Confidential Information.
6.3. Publicity.
Except as required by law and as provided in this Section 6, neither party
may make any public announcement or otherwise disclose the terms of this
Agreement without the prior written consent of the other party, which consent
shall not be unreasonably withheld.
7. PATENT PROSECUTION
The control and expense of the filing, prosecution (including an opposition
or interference) and maintenance of patents and patent applications claiming
Inventions will be the sole responsibility of the party filing the patent
application and the party not filing the patent application will cooperate in
such filing, prosecution and maintenance of the validity of such patent
position. Roche and Aurora will cooperate in the filing, prosecution and
maintenance of jointly owned
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patents and patent applications claiming inventions conceived or made
pursuant to activities under Section 2.
8. WARRANTIES AND INDEMNIFICATION
8.1. Mutual Representations and Warranties.
The parties make the following representations and warranties to each other:
8.1.1. Corporate Power. Each party hereby represents and warrants that such
party (a) is duly organized and validly existing under the laws of the state of
its incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof; (b) has the requisite power
and authority and the legal right to own and operate its property and assets, to
lease the property and assets it operates under lease, and to carry on its
business as it is now being conducted; and (c) is in compliance with all
requirements of applicable law, except to the extent that any noncompliance
would not have a material adverse effect on the properties, business, financial
or other condition of it and would not materially adversely affect its ability
to perform its obligations under the Agreement.
8.1.2. Due Authorization. Each party hereby represents and warrants that
such party (a) has the requisite power and authority and the legal right to
enter into the Agreement and to perform its obligations hereunder; and (b) has
taken all necessary action on its part to authorize the execution and delivery
of the Agreement and to authorize the performance of its obligations hereunder
and the grant of rights extended by it hereunder.
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8.1.3. Binding Agreement. Each party hereby represents and warrants to
the other that: (a) this Agreement has been duly executed and delivered on
its behalf and is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms; (b) the execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority
over it; and (c) all necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by it in
connection with the Agreement have been obtained.
8.2. Warranties and Aurora Technology.
Aurora represents and warrants to Roche as of the Effective Date the
following:
8.2.1. ***.
8.2.2. EXCEPT AS SET FORTH IN SECTION 8.2.1 ABOVE, AURORA (INCLUDING ITS
OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO AURORA PATENT RIGHTS,
AURORA COPYRIGHTS AND AURORA TECHNOLOGY. AURORA FURTHER DISCLAIMS I) ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF AURORA TECHNOLOGY AND AURORA PATENT RIGHTS, II) ANY EXPRESS OR
IMPLIED WARRANTY THAT THE PRACTICE OF AURORA COPYRIGHTS, AURORA
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TECHNOLOGY OR AURORA PATENT RIGHTS WILL NOT INFRINGE A PATENT, COPYRIGHT,
TRADEMARK OR OTHER RIGHT OF A THIRD PARTY, AND III) ANY EXPRESS OR IMPLIED
WARRANTY REGARDING THE PATENTABILITY OF ANY AURORA TECHNOLOGY, INCLUDING
AURORA TECHNOLOGY CLAIMED IN PATENT APPLICATIONS AS PART OF AURORA PATENT
RIGHTS.
8.3. ***.
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8.4. Warranties and Roche Technology.
Roche warrants to Aurora as of the Effective Date the following:
8.4.1. ***.
8.4.2. EXCEPT AS SET FORTH IN SECTION 8.4.1 ABOVE, ROCHE (INCLUDING ITS
OFFICERS, EMPLOYEES AND AGENTS) EXPRESSLY DISCLAIM ANY REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESS OR IMPLIED, RELATING TO ROCHE PATENT RIGHTS,
ROCHE COPYRIGHTS AND ROCHE TECHNOLOGY. ROCHE FURTHER DISCLAIMS: I) ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF ROCHE TECHNOLOGY OR ROCHE PATENT RIGHTS; II) PRACTICE OF ROCHE
COPYRIGHTS, ROCHE TECHNOLOGY OR ROCHE PATENT RIGHTS WILL NOT INFRINGE A
PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHT OF A THIRD PARTY; AND III) THE
PATENTABILITY OF ANY ROCHE TECHNOLOGY, INCLUDING ROCHE TECHNOLOGY CLAIMED IN
PATENT APPLICATIONS AS PART OF ROCHE PATENT RIGHTS.
8.5. ***.
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9. TERM, PARTIAL PERFORMANCE AND TERMINATION
9.1. Term.
The term of this Agreement will begin on the Effective Date and shall
continue for the later of (i) ***or (ii) until there is no longer a royalty
obligation owed or payable by Roche to Aurora unless terminated earlier in
accordance with the provisions of Sections 9.2-9.4 hereof; .
9.2. Termination By Mutual Agreement.
The parties may at any time terminate this Agreement, in whole or in part, by
written agreement executed by both Aurora and Roche. In such event, the
document effecting such termination shall specify the continuation or
termination of any license rights granted hereunder, as well as any other
terms agreed to by both parties.
9.3 Termination by Roche for No Cause.
Roche may terminate this Agreement at any time and for any reason. If Roche
terminates this Agreement other than by expiration of the term under Section
9.1, mutual agreement under Section 9.2, or for cause under Section 9.4, then
all licenses granted will terminate, and Collaborative Screens will be
destroyed or returned, at Aurora's sole discretion to Aurora within ***, and
Aurora shall be entitled to retain any moneys paid and retain the rights to
receive Pre-market Royalties and royalties accrued by Aurora under this
Agreement. In addition, all Materials will be destroyed or returned, at the
providing party's sole discretion, to the providing party within ***of such
termination.
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9.4. Termination for Cause.
Either party shall have the right to terminate this Agreement at any time for
a material breach of this Agreement by the other party, provided that the
non-breaching party shall have given the breaching party ***written notice of
the breach and intention to terminate this Agreement in the absence of a cure
within ***of receipt of such notice by the beaching party. Upon termination
of this Agreement for cause, all licenses and sublicenses granted in
accordance with this Agreement shall continue and rights shall also continue
to accrue to Aurora and Roche; unless decided otherwise by arbitration
pursuant to Section 10.13. Such arbitration will also determine how all
Materials and Collaborative Screens will be destroyed, returned or otherwise
treated. The non-breaching party, upon termination of this Agreement may
seek actual or general damages and remedies available to it at law or in
equity. NO PUNITIVE OR CONSEQUENTIAL DAMAGES MAY BE SOUGHT BY EITHER PARTY.
9.5 Effect of Expiration or Termination.
The obligations and rights of the parties under Sections 2.3, 2.5, 3.3, 4, 6,
9 and 10, thereof, as well as any provisions, which, by their intent or
meaning are intended to so survive, shall survive termination or expiration
of this Agreement. Except as otherwise expressly provided in this Agreement,
the rights and obligations of the parties under Section 2 hereof shall
terminate and be of no further force or effect whatsoever upon any
termination of this Agreement. Upon expiration or other termination of the
Agreement all licenses granted will terminate and upon written request all
Materials and Collaborative Screens will be destroyed or returned, at the
sole discretion of the requesting party, to the party providing screens
within ***except as provided under Section 9.2, 9.3 and 9.4.
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10. MISCELLANEOUS
10.1. Assignment.
Either party may assign its rights or obligations under this Agreement in
connection with the sale of all or substantially all of its assets, or may
otherwise assign its rights or obligations under this Agreement with the
prior written consent of the other party. This Agreement shall survive any
merger or consolidation of either party with or into another party and no
consent for any such merger, consolidation or similar reorganization shall be
required hereunder. In the event of such merger, consolidation or similar
reorganization or in the event of a sale of all assets, no intellectual
property rights of the acquiring or acquired company shall be included in the
technology licensed hereunder. Roche may assign this Agreement to an
Affiliate upon written notice to Aurora.
10.2. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.
10.3. Force Majeure.
Neither party shall lose any rights hereunder or be liable to the other party
for damages or losses on account of failure of performance by the defaulting
party if the failure is occasioned by war, fire, explosion, flood,
earthquake, strike, lockout, embargo, act of God, or any other similar cause
beyond the control of the defaulting party, provided that the party claiming
force majeure has exerted all reasonable efforts to avoid or remedy such
force majeure and thereafter takes all
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reasonable steps to mitigate any such delay in performance hereunder and any
damages that may be incurred by the other party thereby.
10.4. Notices.
Any notices or communications provided for in this Agreement to be made by
either of the parties to the other shall be in writing, in English, and shall
be made by prepaid air mail or overnight carrier with return receipt
addressed to the other at its address set forth below. Any such notice or
communication may also be given by hand, or facsimile to the appropriate
designation. Notices shall be sent:
If to Roche, to: F.Hoffman-La Roche Ltd
Grenzacherstrasse 124
CH - 4070 Basel
Switzerland
Attn. Corporate Law
and, Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attn: Corporate Secretary
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If to Aurora, to: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
Attention: Paul Grayson
Senior Vice President
Corporate Development
provided that if such notice or communication relates to an amendment to this
Agreement or to any notice pursuant to Section 9 hereof, a copy shall also be
sent to:
Attention: John D. Mendlein, Ph.D., J.D.
Vice President
Intellectual Property & General Counsel
Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by mail, facsimile
or cable shall be effective upon receipt and notices given by hand shall be
effective when delivered.
10.5. Waiver.
Except as specifically provided for herein, the waiver from time to time by
either of the parties of any of their rights or their failure to exercise any
remedy shall not operate or be construed as a
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continuing waiver of same or any of the other of such party's rights or
remedies provided in this Agreement.
10.6. Severability.
If any term, covenant or condition of this Agreement or the application
thereof to any party or circumstance shall, to any extent, be held to be
invalid or unenforceable, then the remainder of this Agreement, or the
application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term, covenant or condition of this Agreement
shall be valid and be enforced to the fullest extent permitted by law; and
the parties hereto covenant and agree to renegotiate any such term, covenant
or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement
or the application thereof that is invalid or unenforceable, it being the
intent of the parties that the basic purposes of this Agreement are to be
effectuated.
10.7. Independent Contractors.
It is expressly agreed that Aurora and Roche shall be independent contractors
and that the relationship between the two parties shall not constitute a
partnership or agency of any kind. Neither Aurora nor Roche shall have the
authority to make any statements, representations or commitments of any kind,
or to take any action, which shall be binding on the other, without the prior
written authorization of the other party to do so.
10.8. Counterparts.
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This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
10.9. Entire Agreement.
This Agreement between the parties of even date herewith sets forth all of
the covenants, promises, agreements, warranties, representations, conditions
and understandings between the parties hereto, and supersedes and terminates
all prior agreements and understanding between the parties, with respect to
the subject matter hereof. There are no covenants, promises, agreements,
warranties, representations conditions or understandings, either oral or
written, between the parties other than as set forth herein and therein. No
subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the parties hereto unless reduced to writing and signed by
the respective authorized officers of the parties. This Agreement shall not
be strictly construed against either party hereto. Any conflict between the
terms set forth in the text of this Agreement and the terms of any Exhibit
hereto shall be resolved in favor of the text of this Agreement.
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10.10. No Third Party Beneficiaries.
No third party, including any employee of any party to this Agreement, shall
have or acquire any rights by reason of this Agreement. Nothing contained in
this Agreement shall be deemed to constitute the parties partners with each
other or any third party.
10.12. Dispute Resolution.
The parties recognize that disputes as to certain matters may from time to
time arise during the term of this Agreement which relate to either party's
rights and/or obligations hereunder. It is the objective of the parties to
establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without
resort to arbitration. The parties agree that prior to any arbitration
concerning this Agreement, a member of Roche's senior management and Aurora's
president will meet in person or by video-conferencing in a good faith effort
to resolve any disputes concerning this Agreement. Within ***of a formal
request by either party to the other, any party may, by written notice to the
other, have such dispute referred to their respective officers designated or
their successors, for attempted resolution by good faith negotiations, such
good faith negotiations to begin within ***after such notice is received.
Any dispute arising out of or relating to this Agreement which is not
resolved between the parties or the designated officers of the parties
pursuant to this Section 10.12 shall be resolved by final and binding
arbitration conducted in San Diego, California (unless the parties mutually
agree to another location) under the then current Licensing Agreement
Arbitration Rules of the American Arbitration Association ("AAA"). The
arbitration shall be conducted by three (3) arbitrators who are knowledgeable
in the subject matter which is at issue in the dispute. One arbitrator is
selected by Roche and one arbitrator is selected Aurora
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and the third arbitrator is appointed by the AAA. In conducting the
arbitration, the arbitrators shall determine what discovery will be
permitted, consistent with the goal of limiting the cost and time which the
parties must expend for discovery (and provided that the arbitrators shall
permit such discovery they deem necessary to permit an equitable resolution
of the dispute), ensure that the total time of the arbitration from filing to
a final decision or executed settlement agreement is ***, and be able to
decree any and all relief of an equitable nature, including but not limited
to such relief as a temporary restraining order, a preliminary injunction, a
permanent injunction, specific performance or repletion of property. The
arbitrators shall also be able to award actual or general damages but shall
not award any other form of damage (e.g., consequential, punitive or
exemplary damages). The parties shall share equally the arbitrator's fees
and expenses pending the resolutin of the arbitration unless the arbitrator,
pursuant to its right but not its obligations, requires the non-prevailing
party to bear all or any portion of the costs of the prevailing party. The
decision of the arbitrator shall be final and may be sued on or enforced by
the party in whose favor it runs in any court of competent jurisdiction at
the option of such party. Notwithstanding anything to the contrary in this
Section 10.13, either party may seek immediate injunctive or other interim
relief from any court of competent jurisdiction with respect to any breach of
Sections 3, or 6 hereof, or otherwise to enforce and protect the patent
rights, copyrights, trademarks, or other intellectual property rights owned
or Controlled by such party. In no event shall a demand for arbitration be
made after the date when the institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question would be barred by
the applicable statute.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
F.Hoffmann-La Roche Ltd. Aurora Biosciences Corporation
By: By:___________________________
Name: Name: Paul A. Grayson
Title: Title: Senior Vice President
Corporate Development
Date: Date:
Hoffmann-La Roche Inc.
By:
Name:
Title:
Date:
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LIST OF EXHIBITS
***
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EXHIBIT A
***
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Exhibit B
***
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EXHIBIT C
***
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EXHIBIT D
***
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EXHIBIT E
***
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Exhibit 10.46
LOAN & SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT entered into as of the 26th day of February,
1999, by and between General Electric Capital Business Asset Funding
Corporation, a Delaware corporation, whose address is 10900 NE 4th Street, Suite
500, Bellevue, WA 98004 ("Lender") and Aurora Biosciences Corporation, a
Delaware corporation, whose address is 11010 Torreyana Road, San Diego, CA 92121
("Borrower").
WHEREAS, Lender has agreed to make a commercial loan or loans to
Borrower; and
WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower and Lender agree as follows:
1. CREATION OF SECURITY INTEREST. As security for the due and punctual
payment of any and all of the present and future obligations of the borrower to
Lender hereunder, whether direct or contingent or joint or several, Borrower
hereby conveys, assigns and grants to Lender a continuing security interest in
all of Borrower's rights, title and interests in and to the equipment described
in the Supplemental Security Agreement(s) entered into pursuant to this Loan and
Security Agreement from time to time ("Equipment") including all present and
future additions, attachments and accessories thereto, all substitutions
therefor and replacements thereof and all proceeds thereof, including all
proceeds of insurance (such Equipment and property hereinafter called
"Collateral"); provided, however, that there shall be excluded from Collateral
all general intangibles (including, without limitation, contract rights) which
by their terms, or as a matter of law, are nonassignable without the consent of
the licensor or other third person where and to the extent that the assignment
effected by the foregoing creation of a security interest (and the perfection
thereof) would result in a default under such general intangible for which the
available remedies include the right to terminate such general intangible.
2. THE LOANS.
(a) Subject to the terms and conditions of this Loan and Security
Agreement, lender agrees to make a loan or loans to Borrower. The maximum
principal amount of any loan or loans to be made by Lender to Borrower shall be
within Lender's discretion, subject to the exercise of Lender's reasonable
business judgment, and shall be as stated in the loan commitment letter issued
by lender to Borrower, or in the event a commitment letter is not issued by
Lender, in Lender's internal credit approval (each such loan or loans shall be
referred to as "the Loan Amount").
(b) The Loan Amounts shall be repaid by Borrower as a term loan or term
loans ("Term Loan"). The Term Loan shall be evidenced by a promissory note or
notes in the form attached hereto as Exhibit "A" ("Term Note"). The payment
provisions of each Term Note shall be stated therein.
(c) If requested by Borrower, and in accordance with the terms and
conditions of Section 3 hereof, Lender shall make interim fundings to Borrower
of a Term Loan as partial advances of the Loan Amount ("Interim Loans"). The
Interim Loans shall either be for the payment of the acquisition cost of any
items of Equipment delivered and accepted by Borrower prior to the expiration
date of Lender's loan commitment to Borrower ("Commitment Expiration date") or
to fund progress payments to the vendor or manufacturer of the Equipment, if the
making of progress payments was agreed to by Lender in its commitment or
approval to make the loan or loans to Borrower. The Interim Loans shall be
evidenced by promissory notes in the form attached hereto as Exhibit "B"
("Interim Note"). Interest on all Interim Loans shall be payable as provided
therein. The principal amount due under the Interim Loans shall be due as
provided in the Interim Notes, at which time, provided no Event of Default
hereunder has occurred and is continuing. Lender shall consolidate all Interim
Loans and convert them to a Term Loan evidenced by a Term Note or Notes. Whether
or not a Term Loan is evidenced by one or more Term Notes shall be agreed
between Lender and Borrower, or in the absence of such an agreement, as decided
by Lender, in the exercise of its reasonable business judgment.
(d) In the event that the amount loan pursuant to the Interim Loans is less
than the Loan Amount, subject to Borrower's compliance with the terms and
conditions of this Loan and Security Agreement (including the satisfaction of
the conditions of borrowing set forth in Section 7 of this Loan and Security
Agreement including but not limited to providing Lender with a description of
the items of Equipment), Lender shall disburse to Borrower the balance of the
Loan Amount on the same date that the Interim Loans are converted into a term
loan.
3. METHOD FOR BORROWING ON INTERIM LOAN. Borrower shall give Lender at
least five (5) business days written notice of a request for the disbursement of
an Interim Loan ("Request"), specifying the date on which the Interim Loan is to
be disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default and (ii) in the event items of Equipment have been delivered to
Borrower, Borrower has unconditionally accepted the Equipment from the vendor
thereof. Subject to the conditions of this Loan and Security Agreement, Lender
shall disburse the Interim Loan to the invoicing party, or if Borrower shall
have paid the amount of such invoice, Lender shall reimburse Borrower, upon
receipt of proof of payment from Borrower.
4. CROSS COLLATERAL/CROSS DEFAULT. All Collateral shall secure the payment
and performance of all of Borrower's liabilities and obligations to Lender
hereunder and under any of the loan documents relating hereto including, but not
limited to all Interim Notes and all Term Notes (the Loan and Security
Agreement, the Interim Notes, the Term Notes, the Supplemental Security
Agreement(s) and all other loan documents may be referred to herein collectively
as the "Loan Documents"). Lender's security interest in the Collateral shall not
be terminated until and unless all of Borrower's obligations to Lender under any
of the Loan Documents are fully paid and performed. The occurrence of an event
of default under any other of the Loan Documents shall be deemed to be an Event
of Default hereunder and an Event of Default hereunder shall be deemed to be an
event of default under any other of the Loan Documents.
5 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
as follows:
Page 1 of 6
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(a) Power and Authorization. Borrower has the full power and (corporate)
authority to execute deliver and perform Borrower's obligations under the Loan
Documents. The execution and delivery of the Loan Documents have been authorized
by all requisite corporate action on the part of Borrower. The execution,
delivery and performance of the Loan Documents have not constituted and will not
constitute a breach, default or violation of or under Borrower's articles of
incorporation, by-laws (partnership agreement), or any other agreement,
indenture, contract, lease, law, order, decree, judgment, or injunction to which
Borrower is a party or may be bound and have not resulted and will not result in
the creation of any lien upon the Equipment pursuant to any agreement,
indenture, lease, contract or other instrument to which Borrower is a party,
except the lien created by this Loan and Security Agreement.
(b) Existence. If Borrower is a corporation, Borrower (I) is duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, (ii) has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry out its business as now
conducted, except where the failure to possess the same would not have a
material and adverse effect on the financial condition or operation of Borrower
or its ability to meet its obligations under this Agreement, and (iii) is duly
qualified to transact business as now conducted, and (iii) is duly qualified to
transact business as a foreign corporation in each jurisdiction where the
Equipment will be located and in the jurisdiction where its principal place of
business is located.
(c) Binding Effect. This Loan and Security Agreement constitutes the valid
and binding agreement of the Borrower; the Interim Notes and the Term Note, when
executed and delivered, will constitute the valid and binding obligations of the
Borrower; and the Loan Documents are enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by the bankruptcy laws,
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(d) Litigation. There is no action, suit or proceeding pending against, or
to the knowledge of the Borrower, threatened against or affecting the Borrower,
before any court or arbitrator or any governmental body, agency or official
which has not been previously disclosed to the Lender in writing and in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial condition or results of operations of
the Borrower or which would in any manner draw into question the validity of any
of the Loan Documents.
(e) Filing of Tax Returns. The Borrower has filed all tax returns required
to have been filed and has paid all taxes shown to be due and payable on such
returns, including interest and penalties, and all other taxes which are payable
by it, to the extent the same have become due and payable. The Borrower knows of
no proposed tax assessment against it and all tax liabilities of the Borrower
are adequately provided for.
(f) Title. The Borrower has or shall have at the time it executes the Term
Note good and indefeasible title to the Collateral free and clear of all liens
other than the Lender's lien.
(g) Compliance with Law. The business and operations of the Borrower have
been and are being conducted in accordance with all applicable laws, rules and
regulations, other than violations which are not reasonably likely to (either
individually or collectively) have a material adverse effect on the financial
condition or operations of the Borrower.
(h) Full Disclosure. All documents, records, instruments, certificates,
statements (including, but not by way of limitation, financial statements of
Borrower) and information provided to Lender by Borrower in connection with this
Loan and Security Agreement are true and accurate in all material respects and
do not contain any untrue statement, or fail to contain any statement of a
material fact necessary to make the statements contained herein or therein not
materially misleading. There is no fact known to the Borrower that Borrower has
not disclosed in writing which could materially and adversely affect the
financial condition or operations of Borrower.
(i) Security Interest. The security interest granted to Lender hereunder is
a valid, first priority security interest in the Collateral and has been, or
promptly after the execution of the Supplemental Security Agreement describing
the Collateral and, to the extent necessary, the filing of UCC financing
statements in all appropriate jurisdictions, will be, perfected in accordance
with the requirements of all states in which any item of the Collateral is
located.
(j) Personal Property. Under the laws of the state(s) in which the
Collateral is to be located, the Collateral is deemed to consist solely of
personal property.
(k) Pollution and Environmental Control. Borrower has obtained all permits,
licenses and other authorizations which are required under, and is in material
compliance with, all federal, state, and local laws and regulations relating to
pollution, reclamation, or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes into air,
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or hazardous or toxic materials or wastes, except as
set forth on Schedule 5(k) hereto and except with respect to violations which
could not have a material adverse effect on the financial condition or
operations of Borrower. Borrower shall maintain all such permits, licenses, and
authorizations current.
6. COVENANTS. Borrower hereby agrees and covenants as follows:
(a) Payment. Borrower shall pay the indebtedness secured hereby as provided
herein and in the Interim Notes and Term Notes.
(b) Location of Collateral. Borrower will keep the Collateral located at
the location or locations stated on the Supplemental Security Agreements,
provided, however, that Borrower may change the location of the Collateral with
Lender's prior written consent, which consent shall not be unreasonably
withheld.
(c) No Liens. Except for the security interest granted hereby or under any
other agreement under which Lender is the secured party, whether as mortgagee,
beneficiary or otherwise, Borrower shall keep the Collateral free and clear of
any security interest, lien or encumbrance of any kind and Borrower shall not
sell, assign (by operation of law or otherwise) exchange or otherwise dispose of
any of the Collateral.
(d) Insurance. Borrower shall procure and continuously maintain and pay for
(a) all risk physical damage and property insurance covering loss or damage to
the equipment for not less than the full replacement value thereof naming Lender
as loss payee and (b) bodily injury and property damage combined single limit
liability insurance, all in such amounts and against such risks and hazards as
are reasonably
Page 2 of 6
<PAGE>
required by Lender, with insurance companies and pursuant to contracts or
policies and with deductibles satisfactory to Lender. All contracts and policies
shall include provisions for the protection of Lender notwithstanding any act or
neglect of or breach or default by Borrower, shall provide for payment of
insurance proceeds to Lender, shall provide that they may not be modified,
terminated or canceled unless Lender is given at least thirty (30) days' advance
written notice thereof, and shall provide that the coverage is "primary
coverage" for the protection of Borrower or Lender notwithstanding any other
coverage carried by Lender protecting against similar risks. Borrower shall
promptly notify any appropriate insurer and Lender of each and every occurrence,
which may become the basis of a claim or cause of action against the insured and
provide Lender with all data pertinent to such occurrence. Borrower shall
furnish Lender with certificates of such insurance or copies of policies upon
request and shall furnish Lender with renewal certificates not less than thirty
(30) days prior to the renewal date. Proceeds of all insurance are payable first
to Lender to the extent of its interest.
(e) Financing Statements. At the request of Lender, Borrower will join
Lender in executing one or more financing statements pursuant to the Uniform
Commercial Code and other documents deemed commercially reasonably necessary by
Lender under applicable law to record or perfect its security interest in the
Collateral, including continuation statements, in form commercially reasonably
satisfactory to Lender and will pay the cost of filing the same in all public
offices wherever filing is deemed by Lender to be commercially reasonably
necessary or desirable. Borrower hereby authorizes Lender, in such jurisdictions
where such action is authorized by law, to effect any such recordation or filing
of financing statements or other documents without Borrower's signature thereto.
(f) Change of Name or Address. Borrower will promptly notify Lender in
writing of any change in its place of business or the adoption or change of any
tradename or fictitious business name, and will upon the commercially reasonable
request of Lender, execute any additional financing statements or other similar
documents necessary to perfect or maintain its security interest.
(g) Use of Equipment, Maintenance. Borrower will cause the Equipment to be
used in a careful and proper manner, will comply with and conform to all
governmental laws, rules and regulations relating thereto, and will cause the
Equipment to be operated in accordance with the manufacturer's or supplier's
instructions or manuals and only by competent and duly qualified personnel.
Borrower will cause the Equipment to be kept and maintained in good repair,
condition and working order and will furnish all parts, replacements,
mechanisms, devices and servicing required therefor so that the value, condition
and operating efficiency thereof will at all times be maintained and preserved,
normal wear and tear excepted. All such repairs, parts, mechanisms, devices and
replacements shall immediately, without further act, become part of the
Equipment and subject to the security interest created by this Loan and Security
Agreement. Borrower will not make any improvement, change, addition or
alteration to the Equipment if such improvement, change, addition or alteration
will impair the originally intended function or use of the Equipment or impair
the value of the Equipment as it existed immediately prior to such improvement,
change, addition or alteration. Any part added to the Equipment in connection
with any improvement, change, addition or alteration shall immediately, without
further act, become part of the Equipment and subject to the security interest
created by this Loan and Security Agreement.
(h) Inspection. Lender may inspect the Equipment and may, upon reasonable
prior notice and at any reasonable time or times inspect the books and records
of Borrower with respect to the Equipment and this Agreement, but not more often
than once during each quarter.
(i) Taxes. Borrower shall promptly pay, when due, all charges, fees,
assessments and taxes (excluding all taxes measured by Lender's income) which
may now or hereafter be imposed upon the ownership, leasing, possession, sale or
use of the Collateral.
(j) Performance by Lender. If Borrower fails to perform any agreement or
obligation contained herein, and such failure is not cured within the lesser of
twenty (20) days or any cure period specified for such failure, Lender may
itself perform, or cause the performance of such agreement or obligation and
shall give Borrower written notice of such action. Borrower will pay, or
reimburse Lender, on demand, for any and all fees, including attorneys' fees,
costs and expenses of whatever kind or nature incurred by Lender in connection
with (i) the creation, preservation and protection of Lender's security interest
in the Collateral, including, without limitation, all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, (ii) payments or discharge of any taxes or liens upon or in respect of
the Collateral, (iii) premiums for insurance with respect to the Equipment and
(iv) this Loan and Security Agreement and with protecting, maintaining or
preserving the Collateral and Lender's interests therein, whether through
judicial proceedings or otherwise, or in connection with defending or
prosecuting any actions, suits or proceedings arising out of or related to the
Loan and Security Agreement and the Loan Documents or in connection with any
debt restructuring, loan workout negotiations or bankruptcy or insolvency case
or proceedings. All such amounts shall constitute obligations of Borrower
secured by the Collateral. In the event that Borrower fails to perform any of
its agreements contained herein, Borrower will, on demand, reimburse Lender for
all such expenditures, together with interest thereon from the date of such
expenditure until fully reimbursed at the rate of two percent (2%) per month on
the outstanding balance of such expenditures or the highest rate permitted by
law, whichever is less.
(k) Power of Attorney. Upon the occurrence and during the continuance of an
Event of Default or any event subject to subsection (j) above, Borrower hereby
irrevocably appoints Lender Borrower's attorney-in-fact, with full authority in
the place and stead of Borrower and in the name of Borrower or otherwise, from
time to time in the Lender's discretion, to take any action and to execute any
instrument which Lender may deem commercially reasonably necessary or advisable
to accomplish the purposes of this Loan and Security Agreement, including,
without limitation: (i) to obtain, compromise and adjust insurance required to
be paid to Lender; (ii) to ask, demand, collect, sue for, recover, receive, and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral; (iii) to receive, endorse, and collect any
drafts or other instruments, documents, and chattel paper in connection with
clause (i) or (ii) above; and (iv) to file any claims or take any action or
institute any proceedings which Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of Lender
with respect to any of the Collateral.
(l) No Duties. The powers conferred on Lender hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Lender shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
(m) Financial Data. Borrower will furnish to Lender and will cause any
guarantor of Borrower's obligations to furnish to Lender on request (i) annual
balance sheet and profit and loss statements prepared in accordance with
generally accepted accounting principles and practices consistently applied and,
if Lender so requires, accompanied by the annual audit report of an independent
certified public accountant reasonably acceptable to Lender, and (ii) all other
financial information and reports that Lender may from time to time reasonably
request, including, if Lender so requires, income tax returns of Borrower and
any guarantor of Borrower's obligations hereunder.
Page 3 of 6
<PAGE>
7. Conditions of Borrowing. Lender shall not be obligated to make any loan
hereunder unless:
(a) The Interim Notes or Term Notes evidencing such loan shall have been
duly executed and delivered to Lender;
(b) Borrower shall have executed and delivered to Lender the Supplemental
Security Agreement describing the Collateral and stating, except with respect to
progress payment fundings, the location thereof;
(c) Except with respect to progress payment fundings, Lender shall have
received evidence (as described in Section 6d hereof) that insurance has been
obtained in accordance with the provisions of this Loan and Security Agreement;
(d) Lender shall have received any and all third party consents, waivers or
releases deemed necessary or desirable by it in connection with the loan and the
Collateral being financed, including, without limitation, Uniform Commercial
Code lien releases and the consent and waiver, in form and substance
satisfactory to Lender, of each and every realty owner, landlord and mortgagee
holding an interest in or encumbrance on the real property where any of the
Collateral is to be located;
(e) All filings, recordings and other actions deemed necessary or desirable
by Lender in order to establish, protect, preserve and perfect its security
interest in the Collateral being financed by such loan as a valid perfected
first priority security interest shall have been duly effected, including,
without limitation, the filing of financing statements and the recordation of
landlord (owners) and/or mortgagee waivers or disclaimers, all in form and
substance satisfactory to Lender, and all fees, taxes and other charges relating
to such filings and recordings shall have been paid by Borrower;
(f) The representations and warranties contained in this Loan and Security
Agreement shall be true and correct in all respects on and as of the date of the
making of any loan hereunder with the same effect as if made on and as of such
date;
(g) In the sole judgment of Lender, there shall have been no material
adverse change in the financial condition, business or operations of Borrower
from the earliest date of any financial statement, credit report, business
report or similar document submitted to Lender for its review;
(h) All Loan Documents shall be satisfactory to Lender's attorneys; and
(i) Lender shall have received, in form and substance satisfactory to
Lender, such other documents as Lender shall require including, but not limited
to, a Request, proof of payment, vendor invoices and certificates of authority
and incumbency.
8. DEFAULT. The occurrence of any of the following events, following the
giving of any required notice and/or the expiration of any applicable period of
grace, shall constitute an event of default ("Event of Default") hereunder:
(a) Borrower's default in payment of any installment of the principal of or
interest on any Interim Note or Term Note when and after the same shall become
due and payable, whether at the due date thereof or by acceleration or
otherwise, which default shall continue unremedied for ten (10) days; or
(b) The failure by Borrower to make payment of any other amount payable
hereunder or under any Interim Note or Term Note, and the continuance of such
failure for more than ten (10) days after written notice thereof by Lender to
Borrower; or
(c) The failure by Borrower to perform or observe any covenant, condition,
obligation or agreement to be performed or observed by it hereunder, which
failure shall continue unremedied for thirty (30) days after written notice
thereof by Lender to Borrower; or
(d) The occurrence of a default described in Section 4 hereof; or
(e) Any warranty, representation or statement made or furnished with
respect to the Borrower or the Collateral to Lender by or on behalf of Borrower,
in connection with this Loan and Security Agreement, or the indebtedness secured
hereby, shall prove to have been false in any adverse, material respect when
made or furnished; or
(f) Borrower shall become insolvent or bankrupt or make an assignment for
the benefit of creditors or consent to the appointment of a trustee or receiver;
or a trustee or a receiver shall be appointed for Borrower or for a substantial
part of its property without its consent and shall not be dismissed for a period
of ninety (90) days; or bankruptcy, reorganization, liquidation, insolvency or
dissolution proceedings shall be instituted by or against Borrower and, if
instituted against Borrower, shall be consented to or be pending and not
dismissed for a period of ninety (90) days; or any execution or writ of process
shall be issued under any action or proceeding against Borrower in such capacity
whereby any of the Collateral may be taken or restrained; Borrower shall cease
doing business as a going concern; or, without the prior written consent of
Lender, Borrower shall sell, transfer or dispose of all or substantially all of
its assets or property; or
(g) The liquidation, merger, consolidation, reorganization, conversion to
an "S" status or dissolution, if Borrower is a corporation or partnership, of
Borrower, if it is reasonably likely that such act shall materially and
adversely affect Borrower's ability to perform under any of the Loan Documents;
or
(h) Any item of Collateral is seized or levied on under legal or
governmental process or for any reason Lender deems itself insecure. Lender
shall be entitled to deem itself insecure when some event occurs or fails to
occur or some objective condition exists which significantly impairs the
prospects that any of Borrower's obligations to Lender will be paid when due,
which significantly impairs the value of the Collateral to Lender or which
materially and adversely affects the financial or business condition of
Borrower.
The occurrence of an Event of Default shall terminate any commitment or
obligation by Lender to make any of the loans contemplated by this Loan and
Security Agreement.
Page 4 of 6
<PAGE>
9. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default
hereunder, Lender may, at its option, do any one or more of the following:
(a) Declare all obligations of Borrower to Lender to be immediately due and
payable, whereupon all unpaid principal of and interest on said indebtedness and
other amounts declared due and payable shall be and become immediately due and
payable;
(b) Take possession of all or any of the Collateral and exclude therefrom
Borrower and all others claiming under Borrower, and thereafter hold, store,
use, operate, manage, maintain and control, make repairs, replacements,
alterations, additions and improvements to and exercise all rights and powers of
Borrower in respect to the Collateral or any part thereof. In the event Lender
demands, or attempts to take possession of the Collateral in the exercise of any
rights under this Loan and Security Agreement, Borrower promises and agrees to
promptly turn over and deliver complete possession thereof to Lender;
(c) Require Borrower to assemble the Collateral, or any portion thereof, at
a place designated by Lender and reasonably convenient to both parties, and
promptly to deliver such Collateral to Lender, or an agent or representative
designated by it;
(d) Sell, lease or otherwise dispose of the Collateral at public or private
sale, without having the Collateral at the place of sale, and upon terms and in
such manner as Lender may determine (and Lender may be a purchaser at any sale);
and
(e) Exercise any remedies of a secured party under the Uniform Commercial
Code as adopted in the state where the Collateral is located or any other
applicable law.
Except as to portions of the Collateral which are perishable or
threaten to decline speedily in value or are of a type customarily sold on a
recognized market, Lender shall give Borrower at least fifteen (15) days' prior
written notice of the time and place of any public or private sale of the
Collateral or other intended disposition thereof to be made. Such notice may be
mailed to Borrower at the address set forth in the first paragraph of this Loan
and Security Agreement. Borrower hereby specifically agrees (to the extent that
applicable law and public policy allows it to effectively do so) that any public
or private sale held in accordance with the terms of this Loan and Security
Agreement shall, for the purpose of the Uniform Commercial Code as adopted in
the state where the Collateral is located and for all other purposes, be deemed
to have been conducted in a commercially reasonable manner and in good faith.
The proceeds of any sale under Section 9(d) shall be applied as
follows:
(i) To the repayment of the costs and expenses of retaking, holding and
preparing for the sale and the selling of the Collateral (including legal
expenses and attorneys' fees) and the discharge of all assessments,
encumbrances, charges or liens, if any, on the Collateral prior to the lien
hereof (except any taxes, assessments, encumbrances, charges or liens subject to
which such sale shall have been made);
(ii) To the payment of the whole amount then due and unpaid of the
indebtedness of Borrower to Lender; and
(iii) The surplus, if any, shall be paid to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
Lender shall have the right to enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to stop or
prevent Lender from pursuing any further remedy which it may have, and any
repossession or retaking or sale of the Collateral pursuant to the terms hereof
shall not operate to release Borrower until full payment of any deficiency has
been made in cash.
10. LIMITATION ON INTEREST. It is the intent of the parties to this Loan
and Security Agreement to contract in strict compliance with applicable usury
laws from time to time in effect. In furtherance thereof, the parties stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.
11. PERSONAL PROPERTY/TAGS. No item of Equipment will be attached or
affixed to realty or any building without Lender's prior knowledge and written
consent and waiver of the landlord and the mortgagee, if any, of the real
property. If so requested by Lender, Borrower will affix tags supplied by
Lender, reflecting Lender's security interest in the Equipment.
12. LOSS AND DAMAGE. Borrower shall bear the risk of damage, loss, theft,
or destruction, partial or complete of the Equipment, whether or not such loss
or damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the pro rata portion of the
outstanding principal balance due under the Interim Note or Term Note, as the
case may be, and all other amounts relating to that item of Equipment then due
and owing hereunder, and upon payment of that amount, Lender's lien shall be
terminated with respect to that item of Equipment only, and Lender will release
its interest in that item of Equipment.
13. ASSIGNMENT. Borrower may not assign or transfer any rights under this
Loan and Security Agreement or to the Collateral without Lender's prior written
consent, which consent shall not be unreasonably withheld.
14. INDEMNIFICATION. Borrower shall indemnify and hold harmless Lender from
and against any and all claims, losses, liabilities, causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan
Documents or the Collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.
15. NOTICES. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, request or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective
Page 5 of 6
<PAGE>
only if the same is physically delivered or is by certified mail, postage
prepaid, return receipt requested, or by overnight courier, postage prepaid,
mailed to the parties at the addresses set forth in the first paragraph of this
Loan and Security Agreement, with a copy to Lender's Vice President of Credit.
Any party hereto may change its address for such notices by delivering or
mailing to the other parties hereto, as aforesaid, a notice of such change.
16. NO WAIVER BY LENDER. By exercising or failing to exercise any of its
rights, options or elections hereunder, Lender shall not be deemed to have
waived any breach or default on the part of Borrower or to have released
Borrower from any of the obligations secured hereby, unless such waiver or
release is in writing and is signed by Lender. In addition, the waiver by Lender
of any breach hereof for default in payment of an indebtedness secured hereby
shall not be deemed to constitute a waiver of any succeeding breach or default.
17. FURTHER AGREEMENTS. From time to time, Borrower will execute such
further instruments as Lender may reasonably require, in order to protect,
preserve, and maintain the security interest granted hereby.
18. BINDING UPON SUCCESSORS. All agreements, covenants, conditions and
provisions of this Loan and Security Agreement shall apply to and bind the
successors and assigns of all parties hereto.
19. GOVERNING LAWS. This Loan and Security Agreement shall be governed by
the laws of the State of California.
20. AMENDMENT. This Loan and Security Agreement can be modified or
rescinded only by a writing expressly referring to this Loan and Security
Agreement, signed by both of the parties hereto.
21. INVALIDITY OF PROVISIONS. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.
Lender: General Electric Capital Business Asset
Funding Corporation
-----------------------------------------
By: /s/ Mitchell J. Stevens
-----------------------------------------
(Print Name): Mitchell J. Stevens
-----------------------------------------
Title: Vice President
-----------------------------------------
Borrower:
Aurora Biosciences Corporation
----------------------------------------
By: /s/ John Pashkowsky
----------------------------------------
(Print Name): John Pashkowsky
----------------------------------------
Title: Director of Finance and Treasurer
----------------------------------------
Social Security
Number:
(if Borrower is ----------------------------------------
an individual)
FEIN: 33-0669859
----------------------------------------
Page 6 of 6
<PAGE>
Exhibit 10.47
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
LICENSE AGREEMENT
BETWEEN
CLONTECH LABORATORIES, INC.
AND
AURORA BIOSCIENCES CORPORATION
<PAGE>
LICENSE AGREEMENT
This Agreement is made this [*] (the "Effective Date"), by and between
CLONTECH LABORATORIES INC. ("Clontech"), a Delaware corporation with principal
offices at 1020 East Meadow Circle, Palo Alto, California 94303-4230 and AURORA
BIOSCIENCES CORPORATION ("Aurora") a Delaware corporation with principal offices
at 11010 Torreyana Road, San Diego, California 92121.
RECITALS
WHEREAS, Clontech seeks to obtain certain license rights under the Aurora
Patents and Aurora Technology according to the terms contained herein (the
"Agreement");
WHEREAS, Aurora is the exclusive licensee or owner of the Aurora Patents
and Aurora Technology, (defined herein) relating to certain fluorescent protein
technology further described herein, and desires to license the same to
Clontech; and
WHEREAS, Clontech and Aurora seek to resolve their dispute concerning
certain Clontech products and certain Aurora Patents and Aurora Technology
NOW, THEREFORE, in consideration of the foregoing and the covenants and
premises contained herein the parties agree as follows:
1. DEFINITIONS
1.1 "AURORA COLLABORATORS" means collaborators or licensees (including
sublicensees) of Aurora (e.g. UHTSS-TM- syndicate).
1.2 "AURORA PATENTS" means the Patents and patent applications listed on
Exhibit A and all worldwide counterparts and registrations, continuations,
divisions, reissues, extensions, or supplementary protection certificates with
respect thereto and all patents issuing therefrom and to which Aurora continues
to exercise Control.
1.3 "AURORA TECHNOLOGY" means (1) Know-How and (2) the clones listed in
Exhibit G; wherein (1) and (2) are Controlled by Aurora on or before the
Effective Date and necessary to make Fluorescent Products and Past Products.
1.4 "CLONTECH NON-COMMERCIAL FIELD" means [*]
1.5 "CLONTECH COMMERCIAL FIELD" means [*]
1.6 "COMPETITOR COMPANY" means the following reagents companies that are
Clontech competitors as of the Effective Date: [*]
1.7 "CONFIDENTIAL INFORMATION" means all information, data, and
documentation received by either party from the other party pursuant to this
Agreement and if in writing,
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
<PAGE>
designated as confidential at the time of disclosure, subject to the
exceptions set forth in Section 10.1.
1.8 "CONTROL" or "CONTROLLED" means, in the context of intellectual
property, possession by a party of the ability to grant a license or sublicense
in accordance with the terms of this Agreement, and without violating the terms
of any agreement by such party with any Third Party
1.9 "END USER" means a [*]
1.10 "EXCLUDED FIELD" means any one or more of the following: [*]
1.11 "FLUORESCENT PRODUCT" means the following items sold on or after the
Effective Date: [*] Clontech products that are Fluorescent Products listed on
Exhibit H do not contain [*] Exhibit H may be amended from time to time by
mutual written agreement of the parties,
1.12 "INVENTION" means any new and useful process, machine, manufacture, or
composition of matter, or improvement thereto, whether or not patentable.
1.13 "KNOW-HOW" means information and data which is not generally known to
the public, comprising: designs, concepts, algorithms, formulae, techniques,
practices, processes, methods, knowledge, skill, experience, expertise and
technical information.
1.14 "LIVING COLORS-Registered Trademark- LICENSED PRODUCT" means a
Fluorescent Product marketed under the Living Colors-Registered Trademark-
brand.
1.15 "MATERIALS" means any reagents, promoters, enhancers, vectors,
plasmids, genes, polynucleotides, cell lines, proteins and fragments thereof,
peptides, antigens, antibodies, antagonists, agonists, inhibitors and chemicals.
1.16 "NEW PRODUCT" means a product [*]
1.17 "NON-COMMERCIAL PURPOSE" means a use or activity or result thereof
that does not generate revenue or provide commercially valuable consideration.
1.18 "NON-COMMERCIAL LICENSE" means that certain license attached on
Exhibit C hereto, which may be amended from time to time upon mutual written
agreement of the parties.
1.19 "NOT-FOR-PROFIT LICENSE" means that certain license attached on
Exhibit D hereto, which may be amended from time to time upon mutual written
agreement of the parties.
1.20 "NOT-FOR-PROFIT ZIP-LOCK LICENSE" means that certain license attached
an Exhibit E hereto, which may be amended from time to time upon mutual written
agreement of the parties.
1.21 "PAST PRODUCTS" means the [*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
2
<PAGE>
1.22 "PATENT RIGHTS" means all U.S. or foreign (including regional
authorities such as the European Patent Office) regular or provisional patent
applications including any continuation, continuation-in-part, or division
thereof or any substitute application therefor or equivalent thereof, and any
patent issuing thereon, including any reissue, reexamination or extension
thereof and any confirmation patent or registration patent or patent of
additions based on any such patent, containing one or more claims to an
Invention (and in the case of an issued patent, containing one or more Valid
Claims), and for which a party hereto owns or Controls, individually or jointly,
any title thereto or rights thereunder.
1.23 "ROYALTY TERM" means, in the case of any Fluorescent Product or Past
Product and as to any country, the period of time commencing on [*] in such
country and ending upon the later of: (i) the date that there no longer exists
a Valid Claim in a patent owned or Controlled by Aurora covering the
manufacture, use or sale of such Fluorescent Product or (ii) fifteen (15) years
from [*]
1.24 "SALES" means consideration received by Clontech from a Third Party in
an arm's length transaction. For clarity, Clontech will not sell Fluorescent
Products except in an arm's length transaction.
1.25 "TARGET" means [*]
1.26 "TECHNOLOGY" means Materials and Know-How.
1.27 "THIRD PARTY" means any person or entity other than (i) Aurora and
(ii) Clontech.
1.28 "UC LICENSE" means that certain Exclusive License Agreement between
The Regents of the University of California and Aurora dated June 17, 1996.
1.29 "VALID CLAIM" means: (a) an issued claim under an issued patent within
the Patent Rights, which has not (i) expired or been canceled, (ii) been
declared invalid by an unreversed and unappealable decision of a court or other
appropriate body of competent jurisdiction, (iii) been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, and/or (iv) been
abandoned; or (b) a claim included in a pending patent application within the
Patent Rights that is being actively prosecuted in accordance with this
Agreement and which has not been (v) canceled, (vi) withdrawn from
consideration, (vii) finally determined to be unallowable by the applicable
governmental authority for whatever reason (and from which no appeal is or can
be taken), or (viii) abandoned.
2. LICENSES
2.1 GRANT UNDER THE AURORA PATENTS AND AURORA TECHNOLOGY.
2.1.1 CO-EXCLUSIVE LICENSE TO CLONTECH, NON-COMMERCIAL FIELD.
Aurora as of April 1, 1999 [*] in the Clontech Non-Commercial Field for the
Term.
2.1.2 CO-EXCLUSIVE LICENSE TO CLONTECH, COMMERCIAL FIELD. Aurora
as of April 1, 1999 [*] in the Clontech Commercial Field for the Term.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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2.1.3 NON-EXCLUSIVE LICENSE TO CLONTECH, NON-COMMERCIAL FIELD.
Aurora as of the Effective Date [*] in the Clontech Non-Commercial Field for no
longer than March 31, 1999.
2.1.4 NON-EXCLUSIVE LICENSE TO CLONTECH. Aurora hereby [*] for
the Term
2.1.5 NON-EXCLUSIVE LICENSE TO CLONTECH. Aurora, hereby [*]
2.2 RETAINED RIGHTS. The licenses granted under Section 2.1 are subject
to Aurora's retained right to sell or sole right to license Fluorescent Products
under the Aurora Patents or Aurora Technology to companies that provide
commercial products or services [*] using Fluorescent Products or that use
Aurora Technology/equipment, including, [*] provided, however 1) Clontech may
sell, pursuant to Section 2.1.2, to companies that have been granted an express
license from Aurora according to Sections 4.13 and 4.2.1.1; and 2) such
companies (e.g. [*]) may not receive a license from Aurora to sell Fluorescent
Products in the Clontech Non-Commercial Field, [*]
2.3 LIMITATIONS. Such licenses under Sections 2.1.1, 2.1.2, 2.1.3,
2.1.4. and 2.1.5 are subject to Clontech's obligations described herein
(including payments by Clontech in Section 3). For clarity, the license
rights granted to Clontech in this Section 2 specifically excludes the right
1) to sublicense (except the right to license through a Not-for-Profit
Zip-Lock License, a Not-For-Profit License or a Non-Commercial License as
provided for in Section 4.1.6); 2) [*] or 3) to make, use or sell Fluorescent
Products or Past Products under the Aurora Patents in the Excluded Field
(except Clontech may sell to Third Parties pursuant to Section 2.1.2),
2.4 AURORA'S OBLIGATION.
2.4.1 In consideration of Aurora and Clontech's agreement [*]
2.5 CLONTECH'S OBLIGATION.
2.5.1 As consideration for the rights received in Sections 2.1 and
2.4, Clontech covenants not to oppose or challenge the validity or
enforceability (including interference or re-examination) of the Aurora Patents
in the United States or encourage or support others to do the same at anytime
during the and after the Term.
2.5.2 As consideration for the rights received in Sections 2.1 and
2.4, Clontech covenants not to oppose or challenge the validity or
enforceability (including interference or re-examination) of the Aurora Patents
in any jurisdiction outside of the United States or encourage or support others
to do the same at anytime during and after the Term.
2.5.3 Except as expressly licensed herein, Clontech covenants not
to make, use, sell or sublicense under the Aurora Patents and Aurora Technology.
3. COMPENSATION
3.1 COMPENSATION TO AURORA.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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3.1.1 TECHNOLOGY ACCESS FEES. Clontech will pay to Aurora the
following:
(a) TECHNOLOGY ACCESS FEE FOR 1999. As partial
consideration for the license granted to Clontech pursuant to Section 2.1 for
1999 herein for Aurora Technology, Clontech shall pay to Aurora a total of [*]
which is non-refundable and non-creditable, according to the following schedule:
(i) [*]
(ii) [*]; and
(iii) [*]
(b) ANNUAL MINIMUM ROYALTY FEE. Clontech will pay to
Aurora [*] of the Effective Date and on [*] of the Effective Date throughout the
Term, an annual minimum royalty of [*] for Aurora Patents. Such annual minimum
royalty fee [*]
(c) REAGENT CREDIT. Clontech will provide Aurora with a
[*] credit over [*] years for Clontech products and services and not to exceed
[*] of credit in a [*] and such credit shall not to be transferred to a Third
Party; provided, however, such credit may not exceed [*] for any single [*].
3.1.2 ROYALTIES. Clontech will also pay to Aurora a royalty of
[*] of the Sales of Fluorescent Products and Past Products for the Royalty
Term. Clontech will pay to Aurora a royalty of [*] of the Sales of new
research reagents discovered or developed using the rights licensed pursuant
to Section 2.1.4. Fluorescent Products sold in the [United States] for
Non-Commercial Purposes [*] Clontech will use a royalty rate of [*] for
calculating the royalties owed to Aurora for such Fluorescent Products. [*]
4. MARKETING, MARKING AND REFERRALS
4.1 OBLIGATIONS OF CLONTECH
4.1.1 DEVELOPMENT, MARKETING AND SUPPORT. Clontech will expend at
least [*] of Sales of Fluorescent Products on a yearly basis; provided, however
no less than [*] for each calendar year of the Term will be expended on
Fluorescent Product marketing, development, research, manufacturing, service and
support.
4.1.2 PATENT MARKING. Clontech shall mark all Fluorescent
Products made, used or sold including all advertising for Fluorescent Products
(including Clontech's website) or containers therefor, in accordance with the
applicable patent marking laws, including U.S. patent numbers, 5,625,048 and
5,777,079. Clontech will also recognize Aurora in writing in a prominent manner
on all brochures and other documents relating to Fluorescent Products, as the
entity that has licensed the rights to Clontech.
4.1.3 COMMERCIAL CUSTOMER LIST AND REFERRAL SYSTEM. Aurora will
undertake sole responsibility for patent licensing, other than licensing through
Non-Commercial Licenses, Not-For-Profit Licenses or Not-For-Profit Zip-Lock
Licenses. Aurora will also refer,
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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in writing, potential customers to Clontech for Fluorescent Products pursuant
to Section 2.11, whenever possible. Clontech will refer to Aurora, in
writing, Third Parties that contact Clontech that wish to use or purchase a
Fluorescent Product for a commercial purpose or in an Excluded Field.
4.1.4 QUARTERLY REPORTS. Clontech will provide Aurora within
thirty-five (35) days of the end of each calendar quarter (i.e. March 31, June
30, September 30 and December 31), a written report that [*]. Clontech may also
send [*] a notification letter concerning Past Products and Clontech's
obligations to disclose the names of purchasing Third Parties to Aurora. Such
letter is subject to approval by Aurora in writing (such approval not to be
unreasonably withheld) prior to notifying such Third Parties.
4.1.5 PRODUCTS LIST. Clontech shall provide Aurora with an up to
date list of Fluorescent Products with each quarterly report as required under
Section 4.1.4 indicating the introduction, deletion or modification of a
Fluorescent Product offered for sale and descriptions of such Fluorescent
Products and supporting literature for Aurora's review pursuant to Section 10.4.
4.1.6 ZIP-LOCK AND NON-COMMERCIAL USE LICENSES.
4.1.6.1 In the United States Clontech will sell no
Fluorescent Product without either a Not-for-Profit Zip-Lock License or a
Non-Commercial License. A Not-for-Profit Zip-Lock License will be provided by
Clontech in a zip-lock package with each shipment to not-for profit Third
Parties in the United States.
4.1.6.2 In countries other than the United States,
Clontech will sell no Fluorescent Product to a not-for-profit entity without a
Not-for-Profit Zip-Lock License or a Not-for-Profit License. A Not-for-Profit
Zip-Lock License will be provided by Clontech in a zip-lock package with each
shipment to not-for-profit Third Parties in counties other than the United
States until January 1, 2000. After December 31, 1999 a Not-for-Profit License
must be executed before shipment. In countries other than the United States,
Clontech will sell no Fluorescent Product to a for-profit entity without a
Non-Commercial License.
4.1.6.3 In all countries, unless otherwise mutually agreed
to in writing by Aurora and Clontech, a Non-Commercial License will be executed
with each for-profit entity purchasing a Fluorescent Product for a
Non-Commercial Purpose. Such license [*] Each such Non-Commercial License
shall be executed in writing by the Third Party prior to shipment. In addition,
(1) Clontech will make no sales of Fluorescent Products to any Third Party [*]
Except for inserting the name of the party to be licensed; site name; or license
fee pursuant to this Section 4.1.6, Clontech will not otherwise modify a
Not-for-Profit Zip-Lock License, a Not-for-Profit License or a Non-Commercial
License, without the prior written consent of Aurora. Clontech will pay to
Aurora [*] of all Non-Commercial License Fees payable under each such license in
accordance with this Section 4.1.6.
4.2 AURORA.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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4.2.1 LICENSE. Aurora may, in accordance with Aurora's business
practices, grant licenses for use of Fluorescent Products under the Aurora
Patents to for-profit organizations referred by Clontech pursuant to Section
4.1.3.
4.2.1.1 In consideration for Clontech's diligence in
regard to the referral system described in Section 4.1.3 herein, Aurora will pay
to Clontech [*] of license fees received for each license granted under the
Aurora Patents when such license was granted because of the referral from
Clontech under Section 4.1.3. For clarity, Clontech shall not receive any
consideration for licenses granted by Aurora to a Third Party that is (i) an
Excluded Company; or (ii) is a Third Party that Aurora has made efforts to
license or licensed prior to such a referral from Clontech,
4.2.2 REAGENT PROVIDER. In the event Aurora grants a license to a
Third Party under the Aurora Patents after the Effective Date in accordance with
Section 4.2.1.1, Aurora will recommend to such Third Party, on a
reagent-by-reagent basis that Clontech should be considered the primary reagent
provider of Fluorescent Products to use in accordance with such license, and
such Third Party will [*] in their selection of a supplier. Aurora will inform
Clontech of the supplier of such Third Party, to the extent Aurora is aware of
the identity of such supplier and is consistent with Aurora's obligations to
such Third Party. Clontech may add the name of such supplier to the list of
Competitor Companies pursuant to Section 1.6.
4.2.3 QUALIFIED COMPANY LIST. On a quarterly basis, Aurora will
provide Clontech with an updated list of Third Parties that have been granted a
license to the Aurora Patents by Aurora for a commercial use and a list of
Fluorescent Products that Clontech may sell to such Third Parties during the
term of such license pursuant to the rights granted in Section 2.1.2. Within
[*] days of the Effective Date, Aurora, will provide the first of such list.
5. INTELLECTUAL PROPERTY RIGHTS
5.1 TRANSFER OF RIGHTS. All rights not expressly licensed or assigned by
Aurora are retained by Aurora and no implied licenses are conveyed herein or
were conveyed before the Effective Date. Except as otherwise expressly provided
in this Agreement, nothing in this Agreement is intended to convey or transfer
ownership by one party to the of any rights, title or interest in any
Confidential Information, Technology, copyrights or Patent Rights owned or
Controlled by a party. Except as expressly provided for in this Agreement,
nothing in this Agreement shall be construed as a license or sublicense by one
party to the other of any rights in any Technology, copyrights, or Patent Rights
owned or Controlled by a party.
5.2 INVENTIONS. During the period from the Effective Date and three (3)
years after the end of the Term, all Inventions and other Technology relating to
New Products conceived by employees or agents of Clontech shall be owned by
Clontech and Aurora shall receive a [*] license from Clontech to make, use or
sell inventions covered by such Inventions and Technology by Clontech (including
Patent Rights to New Products) (such rights specifically excludes the sale of
such New Products in the research reagent market). In addition, Clontech grants
to Aurora a [*] license to make, use or sell new reagents discovered or
developed by using the rights provided under Section 2.1.4 in the field of
discovery or development of useful chemicals (such rights excludes specifically
the [*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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5.3 INVENTORSHIP AND ASSIGNMENT. Inventorship of patentable inventions
shall be determined by U.S. patent law. Clontech and Aurora agree to execute
all documentation necessary to perfect all assignments of Inventions, Technology
and Patent Rights.
5.4 COPYRIGHTS. The parties agree to treat and handle, to the maximum
extent practical, any copyrights owned or Controlled by a party in the same
manner as Patent Rights owned or Controlled by such party.
6. PATENT ENFORCEMENT AND RIGHT TO NEGOTIATE
6.1 RIGHTS TO ENFORCE. Aurora hereby grants to Clontech the right to sue,
at [*] of Clontech and Aurora, under the Aurora Patents any Competitor Company
that is selling or has sold Fluorescent Products that are claimed under the
Aurora Patents in the Clontech Commercial Field or the Clontech Non-Commercial
Field; provided, however, Clontech does not have the right to enforce the Aurora
Patents against [*] Aurora exclusively retains all rights to sue for
infringement of the Aurora Patents on, before or after the Effective Date or to
license to [*] under the Aurora Patents, except Clontech's rights to provide
licenses pursuant to Section 4.1.6. The rights to enforce the Aurora Patents
granted in this Section 6.1 are subject to the restriction that: any and all
actions (including any letter(s) concerning the Aurora Patents sent by Clontech
to a Competitor Company) taken by Clontech as an extension of the rights granted
in this Section 6.1 must be taken with written approval of the legal counsel of
Aurora, at Aurora's discretion, at least [*] prior to such action [*]
6.2 [*]. In the event such New Product becomes available for such
licensing, Aurora will notify Clontech in writing of such right to obtain a
license to such New Product. Such right will terminate on a notice-by-notice
basis [*] after such notice is delivered to Clontech informing Clontech of such
New Product. If Clontech fails to contact Aurora or the parties fail to reach a
definitive agreement on such New Product within such forty-five (45) day period
or a mutually agreed upon written extension thereof, then [*]
6.3 DAMAGES RECOVERED. If in accordance with the grant of rights to
enforce the claims of the Aurora Patents granted in Section 6.1 hereof, Clontech
brings a patent suit or enters into a settlement, then for each Third Party that
Clontech recovers damages from Clontech shall pay to Aurora [*] of any such
damages recovered by Clontech in such infringement suit or settlement, within
thirty (30) days after Clontech receives such damages. Such settlement or suit
requires Aurora's written consent.
7. PAYMENTS OF ROYALTIES, ACCOUNTING FOR ROYALTIES AND RECORDS
7.1 PAYMENT AND REPORTING. The royalties due under Section 3 and as
follows in this Section 7 shall be paid within [*] days after the end of each
calendar quarter period in which such royalties are earned during the Royalty
Term for each Fluorescent Product. With each such quarterly payment, Clontech
shall furnish Aurora a royalty statement setting forth on a country-by-country
basis relevant sales information, including the total number of units of each
such Fluorescent Product sold and other information necessary to (i) calculate
royalties owed to Aurora by Clontech in accordance with this Agreement for each
Fluorescent Product and [*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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Each payment made by Clontech to Aurora, in accordance with this Agreement,
shall be wired to a bank account designated by Aurora, on or before the date
such payment is due.
7.2 CURRENCY OF PAYMENT. All payments to be made under this Agreement,
including the royalties payable to Aurora by Clontech, shall be paid in U.S.
dollars by wire transfer or other mutually acceptable means to a bank account
designated by Aurora. Royalties earned shall be determined from the Sales in
the currency of the country in which they are earned and then converted into
dollars at the prevailing commercial rate of exchange for purchasing dollars
with such foreign currency as quoted by the eastern edition of the Wall Street
Journal at the close of business on the last business day of the calendar
quarter for which the relevant royalty payment was earned.
7.3 TAXES WITHHELD. Any income or other tax that Clontech is required by
a government agency to withhold and pay on behalf of Aurora with respect to the
royalties payable under this Agreement shall be deducted from and offset against
said royalties prior to remittance to Aurora; provided, however, that in regard
to any tax so deducted, Clontech shall (1) give or cause to be given to Aurora
such assistance as may reasonably be necessary to enable Aurora to claim
exemption therefrom or credit therefor; (2) shall cause, or use reasonable
efforts to minimize or mitigate any taxes on behalf of Aurora and in each case
shall furnish Aurora proper evidence of the taxes paid on Aurora's behalf.
7.4 SALES RECORDS AND ROYALTY CALCULATIONS. During the Royalty Term and
for [*] from the date of each payment of royalties, Clontech shall keep complete
and accurate records of sales and all other information necessary to calculate
Sales of each Fluorescent Product and Past Product in sufficient detail to allow
the accrued royalties to be determined accurately in accordance with GAAP.
Aurora, with reasonable written notice to Clontech, shall have the right to
cause Aurora's nationally recognized independent, certified public accountant to
audit such records at the place or places of business where such records are
customarily kept in order to verify the accuracy of the reports of Sales and
royalty payments. Such accountant shall execute a confidentiality agreement
prior to entering Clontech's premises, obligating such accountant to keep all
information disclosed to it confidential and shall only be permitted to disclose
to Aurora the extent of any discrepancy between royalty payments paid by
Clontech hereunder and the actual royalty required to be so paid. Aurora shall
bear the full cost of such audit unless such audit discloses a variance of more
than five percent (5%) from the amount of the royalties due under this
Agreement, in which event, Clontech shall bear the full cost of such audit.
Aurora agrees not to disclose Confidential Information concerning royalty
payments and reports, and all information learned in the course of any audit or
inspection, except to the extent necessary for Aurora to reveal such information
in order to enforce its rights under this Agreement or if disclosure is required
by law.
7.5 [*]
7.6 TECHNOLOGY FEE AND ROYALTY. The parties acknowledge that the
principal value contributed by Aurora under this Agreement is the Aurora
Technology (particularly Materials) offered by Aurora and the parties reasonably
believe will lessen the time required to develop new Fluorescent Products and to
increase the efficiency of drug/target discovery and development processes and
technologies. Clontech acknowledges and agrees that the value it receives
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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hereunder is in the access and use of Aurora Technology; accordingly, Clontech
agrees to pay technology access and license fees for Aurora Technology.
Additionally, the parties acknowledge that Aurora may not own or Control patent
applications or patents covering the manufacture, sale, use or importation of a
particular Fluorescent Product; provided, however, Clontech agrees to pay
royalties during the Royalty Term at the applicable rare specified under the
Agreement, regardless of whether a Fluorescent Product is [*] with the exception
of the royalty terms specified in Section 3.1.2 herein regarding rights in [*]
8. PROTECTION AND MAINTENANCE OF PATENT RIGHTS
8.1 Aurora shall use reasonable efforts to continue to prosecute the
Aurora Patents to obtain the broadest claims reasonably possible and to defend
and maintain the validity and enforceability of any issued claims. Aurora shall
have sole control of the prosecution of all Aurora Patents. Aurora, at
Clontech's request, will provide quarterly updates of such prosecution.
Clontech will pay [*] of the patent prosecution costs of the Aurora Patents
billed to Aurora by a Third Party within thirty (30) days of receipt of invoice;
[*] Aurora will provide Clontech with [*] of patent prosecution of the Aurora
Patents and related invoices for reimbursement of patent prosecution costs
(includes costs and attorney fees). [*]
9. REPRESENTATIONS AND WARRANTEES
9.1 REPRESENTATIONS AND WARRANTIES OF AURORA AND CLONTECH. Each Party
hereby represents and warrants:
CORPORATE POWER. Such party is duly organized and validly existing
and in good standing under the laws of the state of its incorporation
and his all requisite corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
DUE AUTHORIZATION. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
BINDING AGREEMENT. This Agreement is a legal and valid obligation
binding upon it and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by such party
does not conflict with any agreement, instrument or understanding,
oral or written to which it is a party or by which it may be bound,
nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
9.2 REPRESENTATIONS AND WARRANTIES OF CLONTECH.
Clontech further represents and warrants to Aurora that:
[*]
9.3 REPRESENTATIONS AND WARRANTIES OF AURORA.
Aurora further represents and warrants to Clontech that:
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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(a) It Controls under valid licenses, and will use reasonable
efforts to continue to Control under valid licenses all right, title and
interest in and to the Aurora Patents licensed, except as otherwise provided or
disclosed herein.
9.4 NEGATION OF WARRANTIES
9.4.1 Except as expressly set forth in this Agreement, Aurora
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCTS OR
SERVICES WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR
ANY OTHER EXPRESS OR IMPLIED WARRANTIES.
10. CONFIDENTIALITY
10.1 CONFIDENTIAL INFORMATION. Except as expressly provided herein, the
parties agree that, for the Term and [*] thereafter, the receiving party shall
keep completely confidential and shall not publish or otherwise disclose to
another party and shall not use for any purpose other than to perform the
purposes contemplated by this Agreement any Confidential Information furnished
to it by the disclosing party hereto pursuant to this Agreement, except that to
the extent that it can be established by the receiving party by competent proof
that such Confidential Information:
was already known to the receiving party, other than under an obligation of
confidentiality, at the time of disclosure;
was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving party;
became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of
the receiving party in breach of this Agreement; or
was lawfully disclosed to the receiving party by a person other than a
party hereto; or
was independently developed by the receiving party without the use of
Confidential Information.
10.2 PERMITTED USE AND DISCLOSURES. Each party hereto may use or disclose
Confidential Information disclosed to it by the other party to the extent such
use or disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
law, governmental regulation or court order, submitting information to tax or
other governmental authorities making a permitted sublicense or otherwise
exercising its rights hereunder, provided that if a party is required to make
any such disclosure of another party's Confidential Information, other than
pursuant to a confidentiality agreement, it will give reasonable advance notice
to the latter party of such disclosure and, save to the extent inappropriate in
the case of patent applications, will use reasonable efforts to secure
confidential
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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treatment of such information prior to its disclosure (whether through
protective orders or otherwise).
10.3 CONFIDENTIAL TERMS. Except as expressly provided herein, each party
agrees not to disclose any material or financial terms of this Agreement to
another party without the consent of the other party, not to be unreasonably
withheld; provided, however, each party reserves the right to make reasonable
disclosures including the redaction of material or financial terms) as required
by securities or other applicable laws, or to actual or prospective investors or
corporate partners (including licensees and acquirers), or to accountants,
attorneys and other professional advisors on a need-to-know basis under
circumstances that reasonably ensure the confidentiality thereof, or to the
extent required by law. If such Confidential Information is to become public
information by such disclosure the disclosing party must obtain the written
consent of the non-disclosing party in order to obtain protection of the
Confidential Information if necessary.
10.4 PRESS RELEASE. Notwithstanding the foregoing, the parties agree on
the press release to announce the execution of this Agreement and to be released
by Aurora, substantially in the same form as attached in Exhibit B and to be
mutually agreed upon. Thereafter, Clontech and Aurora may each disclose to
Third Parties the information contained in the mutually agreed upon press
release without the need for further approval by the other.
10.5 REVIEW PROCESS FOR NEW FLUORESCENT PRODUCT LITERATURE. At least [*]
prior to the public distribution of Fluorescent Product literature (including
brochures and website information) Clontech will provide to Aurora the same for
review and comment and Aurora will have [*] days to comment and approve or
decline release of such license in writing (such consent not to be unreasonably
withhold); provided, however that if Aurora does not provide any such
communication within such [*] Clontech may release such literature without
Aurora's written approval.
11. TERMINATION
11.1 TERM. This Agreement is effective as of this Effective Date and shall
continue in full force and effect until March 5, 2005 ("Term"), unless otherwise
terminated as provided herein. Prior to September 5, 2004, the parties may
mutually agree in writing to extend such Term beyond March 5, 2005. [*]
11.2 TERMINATION. Either party shall have the right to terminate this
Agreement at any time during the Term for a material breach of this Agreement by
the other party, provided that the non-breaching party shall have first given
sixty (60) days prior written notice (twenty (20) days in the event of
non-payment of any amounts due under this Agreement) to the breaching party
describing such breach and stating the non-breaching party's intention to
terminate this Agreement if such breach remains uncured, and the breaching party
thereafter fails to cure same within such sixty day (60) period (twenty (20) day
period in the event of non-payment of any amounts due under this Agreement).
11.3 [*]
11.4 EFFECT OF EXPIRATION OR TERMINATION. The obligations and rights of
the parties under Section 3.1.1 (survives only through the calendar year of
termination or expiration) and
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
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Articles 5, 7, 10 and 12, thereof shall survive termination or expiration of
this Agreement. Except as otherwise expressly provided in this Agreement,
the rights and obligations of the parties under Article 2 hereof shall
terminate and be of no further force or effect whatsoever upon any
termination of this Agreement. Upon expiration or other termination of the
Agreement all licenses granted will thereby terminate and Materials will be
destroyed or returned, at the sole discretion of Aurora within sixty (60)
days.
12. INDEMNIFICATION
12.1 INDEMNIFICATION. Clontech will defend, indemnify and hold Aurora, its
officers, directors, employees, affiliates and agents harmless against any and
all liability, loss, damage, claim or expense (including attorney's fees)
arising out of a suit by a Third Party from the performance under this Agreement
by Clontech, including the sale of Past Products or Fluorescent Products by
Clontech.
12.2 CLONTECH INDEMNIFICATION FOR PRODUCTS OR SERVICES ARISING FROM LICENSE
GRANTED HEREIN. With respect to rights licensed to Aurora by the Howard Hughes
Medical Institute ("HHMI") or by The Regents of the University of California
("UC"), Clontech agrees to indemnify, defend and hold harmless HHMI or UC, as
appropriate, and their respective officers, directors, employees, sponsors and
agents from and against all damages or other amounts payable to a Third Party
(including product liability) resulting or arising from Clontech's use of the
rights granted herein to the extent that such indemnification by Clontech is
required by HBM or UC pursuant to agreements between MIME and Aurora or between
UC and Aurora.
13. MISCELLANEOUS
13.1 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon the
parties' respective successors and permitted assigns. Clontech may not assign
this Agreement or any of its rights or obligations hereunder without the prior
written consent of Aurora (not to be unreasonably withheld), and any such
attempted assignment shall be void. Aurora may assign this Agreement.
13.2 EFFECT OF WAIVER. No waiver of any default, condition, provisions or
breach of this Agreement shall be deemed to imply or constitute a waiver of any
other like default, condition, provision or breach of this Agreement.
13.3 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING OUT OF
THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
13.4 FORCE MAJEURE. Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, act of God(s), earthquake, flood (including El
Nino and La Nina), lockout, embargo and governmental acts or orders or
restrictions.
13
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13.5 AMENDMENT. No modification, supplement to or waiver of this Agreement
or any Addendum hereto or any of their provisions shall be binding upon a party
hereto unless made in writing and duly signed by an authorized representative of
both Clontech and Aurora. In no event may the terms of this Agreement be
changed, deleted, supplemented or waived by any notice, purchase order, receipt,
acceptance, bill of lading or other similar form of document. A failure of
either party to exercise any right or remedy hereunder, in whole or in part, or
on one or more occasions, shall not be deemed either a waiver of such right or
remedy to the extent not exercised, or of any other right or remedy, on such
occasion or a waiver of any right or remedy on any succeeding occasion.
13.6 ENTIRE AGREEMENT. This Agreement, and each Exhibit attached hereto,
and each supplemental written agreement contemplated hereunder, sets forth the
entire understanding and agreement of the parties as to the subject matter
thereof, and there are no other understandings, representations or promises,
written or verbal, not set forth herein or on which either party has relied. If
any provisions of any such Addendum or supplemental written agreement conflict
with any provisions set forth in this Agreement, the provisions of this
Agreement shall take precedence, unless such Addendum or supplemental written
agreement expressly refers to the specific provision(s) of this Agreement that
it is intended to replace or modify (and which shall be limited in force and
effect to such Addendum or supplemental written agreement only).
13.7 NOTICES. All Notices under this Agreement shall be given in writing
and shall be addressed to the parties at the following addresses:
For Clontech:
Kenneth Fong, Ph.D.
CEO/President
Clontech Laboratories
1020 East Meadow Circle
Palo, Alto, California 94303
Copies to:
Sally Brashears, Esq.
Director, Intellectual Property
Clontech Laboratories
1020 East Meadow Circle
Palo Alto, California 94303
For Aurora:
Timothy J. Rink, M.D., D.Sc.
CEO, President and Chairman
Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
14
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Copies to:
John D. Mendlein
General Counsel and Vice President, Intellectual Property
Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
Notices shall be in writing and shall be deemed delivered when received if
delivered by a courier, or on the second business day following mailing, if sent
by first-class certified or registered mail, postage prepaid.
13.8 ARBITRATION. The parties recognize that disputes as to certain
matters may from time to time arise during the term of this Agreement which
relate to either party's rights and/or obligations hereunder. It is the
objective of the parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to arbitration. The parties agree that; prior to
any arbitration concerning this Agreement, Clontech's CEO and Aurora's CEO will
meet in person or by video-conferencing in a good faith effort to resolve any
disputes concerning this Agreement. Within thirty (30) days of a formal request
by either party to the other, any party may, by written notice to the other,
have such dispute referred to their respective officers designated or their
successors, for attempted resolution by good faith negotiations, such good faith
negotiations to begin within thirty (30) days after such notice is received.
Except as otherwise provided specifically herein, any controversy or claim under
this Agreement shall be solely settled by arbitration by one arbitrator pursuant
to the Commercial Arbitration Rules of the American Arbitration Association (the
"Association"); provided that the parties shall first use their best efforts to
resolve such dispute by negotiation. The arbitration shall be conducted [*]
The arbitrator shall be selected by the joint agreement of the parties, but if
they do not so agree within twenty (20) days of the date of a request for
arbitration, the selection shall be made pursuant to the rules of the
Association. The decision reached by the arbitrator shall be made within six
(6) months of the start of arbitration and shall be conclusive and binding, upon
the parties hereto and may be filed with the clerk of any court of competent
jurisdiction and a judgment confirming such decision may, if desired by any
party to the arbitration, be entered in such court. Each of the parties shall
pay its own expenses of arbitration and the expenses of the arbitrator(s) shall
be equally shared; provided, however, that if in the opinion of the
arbitrator(s) any claim hereunder or any defense or objection thereto was
unreasonable, the arbitrator(s) may assess, as part of the award, all or any
part of the Arbitration Expenses (including reasonable attorneys' fees) against
the party raising such unreasonable claim, defense or objection. Nothing herein
set forth shall prevent the parties from settling any dispute by mutual
agreement at any time. Notwithstanding anything to the contrary in this Section
13, either party may seek immediate injunctive or other interim relief from any
court of competent jurisdiction with respect to any' breach of Sections 5 or 9
hereof, or otherwise to enforce and protect the patent rights, copyrights,
trademarks, or other intellectual property rights owned or Controlled by such
party. For clarity, this arbitration provision, Section 13.8, shall not apply
to any claim of infringement or a lawsuit to determine the enforceability or
validity of intellectual property, including patents. In no event shall a
demand for arbitration be made after the date when the institution of a legal or
equitable proceeding based on the claim, dispute or other matter in question
would be barred by the applicable statute of limitations.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
15
<PAGE>
13.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard or giving
effect to its principles of conflict of laws.
13.10 THIRD PARTY BENEFICIARIES. This Agreement and the rights and
obligations are created hereunder for the sole benefit of the parties hereto and
their respective successors or assigns as may be permitted under the terms of
this Agreement. By entering into this Agreement, the parties agree that they
are not creating and do not intend to create an implied or incidental rights
inuring to the benefit of Third Parties.
13.11 SEVERABILITY. This Agreement is intended to be severable. If any
provision(s) of this Agreement are or become invalid, are ruled illegal by a
court of competent jurisdiction or are deemed unenforceable under the current
applicable law from time to time in effect during the term hereof, it is the
intention of the parties that the remainder of the Agreement shall not be
affected thereby and shall continue to be construed to the maximum extent
permitted by law at such time. It is further the intention, of the parties that
in lieu of each such provision which is invalid, illegal, or unenforceable,
there shall be substituted or added as part of this Agreement by such court of
competent jurisdiction a provision which shall be as similar as possible, in
economic and business objectives as intended by the parties to such invalid,
illegal or unenforceable provision, but shall be valid, legal and enforceable.
13.12 HEADINGS. Captions and paragraph headings are for convenience only
and shall not form an interpretative part of this Agreement. Unless otherwise
specifically provided, all references to a Section incorporate all Sections or
subsections thereunder. This Agreement shall not be strictly construed against
either party hereto and maybe executed in two or more counterparts, each of
which will be deemed an original and the same instrument. Counterparts may be
signed and delivered by facsimile, each of which shall be binding when sent, and
in each case an original shall be sent via overnight courier. This Agreement
will not be enforceable and shall have no effect if this Agreement is not
executed by Clontech and Aurora on or before March 10, 1999.
IN WITNESS WHEREOF, the parties have executed this Agreement.
By: /s/ Kenneth Fong Date: [*]
----------------------------
Kenneth Fong, Ph.D.
President and CEO
Clontech Laboratories, Inc.
By: /s/ Timothy J. Rink Date: [*]
----------------------------
Timothy J. Rink, M.D., Sc.D.
President, CEO and Chairman
For Aurora Biosciences Corporation
16
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EXHIBIT A
AURORA PATENTS
[*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1
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EXHIBIT B
PRESS RELEASE
AURORA BIOSCIENCES CORPORATION
CONTACT: ANGELA HARTLEY 11010 Torreyana Road
DIRECTOR, CORPORATE COMMUNICATIONS San Diego CA 92121
AND INVESTOR RELATIONS
E-mail: [email protected] Phone: (619) 404-6767
Website: http://www.aurorabio.com Fax: (619) 404-6714
CONFIDENTIAL
AURORA BIOSCIENCES AND CLONTECH ANNOUNCE
COMMERCIALIZATION AGREEMENT FOR GFP
TECHNOLOGY
SAN DIEGO ([*]) -- Aurora Biosciences Corporation (Nasdaq:ABSC) and Clontech
Laboratories, Inc. today announced an agreement to commercialize mutant green
fluorescent proteins ("GFP"), which are [*] tools for cell biology and
genomics. Under the license agreement, Clontech will be Aurora's sole
worldwide licensee to supply certain GFP technology to not-for-profit
customers for non-commercial research with a "zip-lock" license. Clontech may
also supply Aurora's GFP technology to for-profit customers for
non-commercial research. Use of this [*] genomics technology for commercial
purposes would require a direct license from Aurora and Clontech will [*]
The agreement provides for Clontech to pay an up-front technology access fee for
Aurora's ultrabright GFP's. In addition, Aurora will receive royalties on any
GFP tools that Clontech sells.
"Clontech is a leading life sciences research tools company that has made
important contributions to commercializing GFP technology. We are pleased to
have them offer Aurora's powerful genomic and cell biology GFP tools as part of
their expanding product line," said Timothy J. Rink, M.D., Sc.D., Aurora's
chairman, chief executive officer and president. "Starting in the second quarter
of this year, Clontech will be Aurora's only licensed supplier of these genomic
tools for research purposes."
"Aurora controls an impressive intellectual property estate concerning GFP
technology, which is a fundamental workhorse of the biotech and research
communities," said Kenneth Fong, Ph.D., Clontech's chairman, president and chief
executive officer. [*] We are preparing to expand our Living Colors-Registered
Trademark- line with Aurora enhanced GFP's, and look forward to providing
user-friendly, non-commercial use licenses for this GFP technology." Living
Colors-Registered Trademark- is the portfolio of fluorescent protein reporters
that Clontech provides for monitoring gene expression and protein localization.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1
<PAGE>
All customers desiring a license to Aurora's GFP technology for non-commercial
purposes should contact Clontech directly. Not-for-profit customers will not be
charged any license fee under the terms of the proposed "zip-lock" license for
non-commercial research. For-profit customers wishing to use Aurora's GFP
technology for noncommercial research should also contact Clontech and license
fees will vary depending on the size of the research site. Customers desiring to
use Aurora's GFP technology for commercial purposes should contact Aurora
directly.
Aurora's GFP technology is part of its large patented portfolio of fluorescent
technologies. Drug discovery-related applications for GFP technology include
functional generates, high throughput screening assays, and gene profiling to
assess the potential toxicity of compounds. GFP's are widely used as research
tools, with over 1200 publications relating to GFP to date. Aurora's issued
patents on GFP, which include over 80 claims, are directed toward nucleic acids
encoding fluorescent proteins, the fluorescent proteins themselves, and various
fusion proteins. Aurora also has applications pending on many fundamental uses
of fluorescent proteins.
Aurora designs and develops proprietary drug discovery systems, services and
technologies to accelerate and enhance the discovery of new medicines. Aurora is
developing an integrated technology platform comprised of a portfolio of
proprietary fluorescent assay technologies and an UHTSS-TM- platform designed to
allow assay miniaturization and to overcome many of the limitations associated
with the traditional drug discovery process. The Company believes that the
UHTSS-TM- platform will enable Aurora and its collaborators to take advantage of
the opportunities created by recent advances in genomics and combinatorial
chemistry that have generated many new therapeutic targets and an abundance of
new, small molecule compounds. Current collaborators include Merck & Co., Inc.,
Warner-Lambert, Bristol-Myers Squibb Co., Eli Lilly and Company,
F.Hoffmann-LaRoche, Pharmacia & Upjohn, Inc., Cytovia, Inc. and SIDDCO, Inc. For
additional corporate information, visit the Aurora website at
http://www.aurorabio.com.
CLONTECH LABORATORIES, INC. DEVELOPS, MANUFACTURES, AND MARKETS PRODUCTS FOR
LIFE SCIENCE RESEARCH. WITH OVER 1,500 PRODUCTS, THE COMPANY HAS ASSEMBLED ONE
TO THE BROADEST PORTFOLIOS OF MOLECULAR BIOLOGY RESEARCH TOOLS IN THE INDUSTRY.
THE COMPANY'S PRODUCTS FACILITATE RESEARCH ANALYSIS IN THE AREAS OF GENE
IDENTIFICATION, GENE EXPRESSION ANALYSIS, FUNCTIONAL ANALYSIS, AND TARGET
VALIDATION. FOR ADDITIONAL CORPORATE INFORMATION, VISIT CLONTECH'S WEB SITE AT
http://www.clontech.com.
Statements in this press release that are not strictly historical are
"forward-looking" statements that involve a high degree of risk and uncertainty.
Such forward-looking statements include statements regarding the potential use
of GFP technology, as well as the development of the UHTSS-TM- platform. Such
statements are only predictions and the actual events or results may differ
materially from those projected in such forwardlooking statements. Factors that
could cause or contribute to differences include risks associated with the
dependence on patents and proprietary rights, the ability to attract additional
licensees and collaborative partners, risks involved with the Company's new and
uncertain technology, dependence on existing pharmaceutical and biotechnology
collaborations, and the development or availability of competing systems. With
respect to Aurora, these factors and others are more fully described in
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<PAGE>
Aurora's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and subsequent Forms 10-Q, as filed with the Securities and Exchange
Commission. The Company assumes no obligation to update any forward-looking
statements.
UHTSS-TM- is a trademark of Aurora Biosciences Corporation. Living Colors-TM- is
a trademark of Clontech, Inc.
3
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EXHIBIT C
NON-COMMERCIAL LICENSE
NON-COMMERCIAL USE LICENSE AGREEMENT
LICENSE FOR LIVING COLORS-Registered Trademark- LICENSED PRODUCTS
IMPORTANT INSTRUCTIONS--READ CAREFULLY: This Non-Commercial Use License
Agreement (this "Agreement") is the legal agreement between you, your for-profit
organization (hereinafter Licensee), which purchased the Products and Aurora
Biosciences Corporation ("Aurora") (hereinafter Licensor), together, the
Parties, for the non-commercial use of the Living Colors-Registered Trademark-
Licensed Products (hereinafter the "Products") identified above. Clontech is
the co-exclusive licensee of Aurora for the sale of the Products for
non-commercial use.
AS A CONDITION OF THE SALE OF THE PRODUCTS AND PRIOR TO THE OPENING OF PACKAGING
ENCLOSING THE PRODUCTS, AURORA AND LICENSEE AGREE AS FOLLOWS:
1. PRODUCTS ARE FOR NON-COMMERCIAL USE, RESEARCH, BY YOU, THE LICENSEE.
LICENSEE SHALL USE THE PRODUCTS SOLELY FOR THE PURPOSE OF CONDUCTING INTERNAL,
NON-COMMERCIAL RESEARCH AT THE FOR-PROFIT ORGANIZATION ("RESEARCH"). THE
LICENSEE MAY MODIFY THE NON-CODING REGION OF THE PRODUCTS TO FACILITATE
RESEARCH. THE LICENSEE WILL NOT MODIFY THE CODING REGION OF THE FLUORESCENT
PROTEIN OF THE PRODUCTS. Licensee may allow access to the Products to employees
and students for purposes consistent with this Agreement provided that prior to
such disclosure, such individuals shall have been apprised of the proprietary
nature of the Products. Licensee will not sell, transfer, disclose or otherwise
provide access to the Products to any person or entity, except as expressly
permitted herein. Licensor and Licensee acknowledge that Licensee shall not
have the right to authorize any third party to use or sell any Products or
derivatives thereof. LICENSEE ACKNOWLEDGES THAT THE PRODUCTS SHALL NOT BE USED
FOR ANY EXPERIMENT OR ACTIVITY WHERE A FOR-PROFIT ORGANIZATION FUNDS (OTHER THAN
THE LICENSEE'S OWN FUNDING) IN WHOLE OR IN PART, SUCH ACTIVITIES OR POSSESSES
ANY PRESENT OR FUTURE INTELLECTUAL PROPERTY OR CONTRACT RIGHT IN SUCH
ACTIVITIES.
2. SORRY, THERE ARE SOME PROHIBITED USES OF THE PRODUCT. Because a second
license is required for certain uses of the Products, Products will not be used
in the following fields: (i) services to Third Parties (e.g. screening and
profiling); (ii) databases subscription/access; (iii) use in IN VIVO
multi-cellular organisms; (iv) diagnostics; (v) screening more than 1,000
chemicals in a 12 month period to identify useful chemicals; (vi) profiling
chemicals for selectivity, bioavailability, drug metabolism or toxicity; (vii)
promoterless vectors for integration into a mammalian genome using
non-homologous recombination integration methods (e.g. random integration); or
(viii) a quality control or assurance process for the manufacture of a product
for sale.
1
<PAGE>
3. YOU MUST CONDUCT RESEARCH WITHIN THE LAW AND THERE ARE SOME PRECAUTIONS.
Upon receipt of the Products, Licensee shall conduct the Research utilizing its
expertise and facilities in strict accordance with all applicable state and
federal laws, regulations and guidelines. Licensee understands that the
Products, under certain circumstances, may have biological and/or chemical
properties that are unpredictable and unknown at the time of transfer, that they
are to be used with caution and prudence, and are not to be used for testing in
or treatment of humans.
4. YOU MAINTAIN THE RIGHT TO PUBLISH RESEARCH RESULTS. Licensee shall have
the right to use all results solely for research and other non-commercial
purposes, such as publication of scientific articles and public presentation of
research results.
5. PROPRIETARY AND PROPERTY RIGHTS. Licensor hereby grants to Licensee a
non-exclusive right to use the Product after the Effective Date in accordance
with the terms of this Agreement. Title to the product shall not transfer to
the Licensee. Licensor retains all rights not expressly granted herein and
no implied licenses are granted herein. If the Licensee breaches this
contract any intellectual property rights created with the use of the
Products will be assigned to Aurora. The Products are provided under at
least one of the following: U.S. Patents 5,625,048 or 5,777,079; and
Published PCT Applications: WO96/23810, WO97/28261, WO98/63737 or WO98-02571.
Additional patent rights are pending worldwide.
6. DO NOT MISUSE THE PRODUCTS AND INDEMNIFICATION. Licensee will defend,
indemnify and hold Licensor, Clontech, The Regents of the University of
California and the Howard Hughes Medical Institute, their managers, directors,
officers, employees, sponsors and agents (collectively the "Indemnified
Parties") harmless against any and all liability, loss, damage, claim or
expense, including attorney's fees, (collectively the "Indemnified Losses")
arising out of or in connection with this Agreement, including, without
limitation Indemnified Losses resulting from any use by the Licensee, Licensee'
employees or students of the Products and any materials derived therefrom.
Licensee will indemnify and hold harmless the Indemnified Parties against any
and all Indemnified Losses resulting from, arising out of or relating to: (i)
product liability claims of any nature; (ii) claims arising from Licensee's
failure to comply with all governmental regulations relating in any to use or
storage of the Products; (iii) Licensee's breach of this Agreement; and (iv)
claims by a third party that Licensee, Licensee's employees or students use of
the Products infringes or violates any patent, copyright, trademark or property
rights of such third party.
7. LIMITED WARRANTY. Clontech warrants that, at the time of shipment, the
products sold by it are free from defects in material and workmanship and
conform to specifications, which accompany the product. Licensor and Clontech
make no other warranty, express or implied with respect to the products,
including any warranty of merchantability or fitness for any particular purpose
or that the Products do not infringe an patent. Notification of any claim for
breach of warranty must be made within sixty (60) days of receipt unless
provided in writing by Licensor and Clontech. No claim shall be honored if the
Licensee fails to notify Clontech within the period specified. The sole and
exclusive remedy available to Licensee for any liability of Clontech and
Licensor whether based upon warranty, strict liability, contract or otherwise,
is limited to the replacement of the goods or the refund of the invoice price of
the goods. Clontech and Licensor shall in
2
<PAGE>
no case be liable for special, incidental or consequential damages of any
kind.
8. TERM. This Agreement shall commence on the date indicated by the licensee
below or upon opening of the packaging (the "Effective Date"), which ever is
earlier, and terminate exactly one (1) year from the Effective Date.
9. TERMINATION. Either party may terminate this Agreement for any reason upon
thirty (30) days' written notice to the other party. The rights and obligations
under Sections 1, 3, 4, 5, 6 and 7 shall survive any termination, expiration or
completion of this Agreement with respect to information generated and
activities and events occurring prior thereto. Upon expiration or any
termination of this Agreement, Licensee shall promptly return to Aurora or
destroy, as Aurora directs, all remaining Products, and if applicable all
Products cloned, replicated or otherwise reproduced.
10. ENTIRE AGREEMENT AND ASSIGNABILITY. This Agreement, together with the
exhibits attached hereto, sets forth the complete and entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes and
terminates all prior agreements and understandings between the parties hereto.
No subsequent amendment or addition to this Agreement shall be binding upon the
parties hereto unless reduced to writing and signed by the respective authorized
officers of the parties hereto. This Agreement shall not be assigned or
otherwise transferred by Licensee.
11. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by the
laws of the State of California. Any dispute resolution or litigation
concerning this Agreement will occur in the State of California or the United
States District Court in California.
12. LICENSE FEE. Licensee will pay to Clontech a non-refundable license fee,
on the Effective Date, of [Clontech to Provide] Dollars ($ ). [site
language to be provided by Clontech]
Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
By:
- ------------------------------------------------------------------------------
Title:
- ------------------------------------------------------------------------------
Date:
- ------------------------------------------------------------------------------
[Clontech to Provide]
3
<PAGE>
EXHIBIT D
NOT-FOR-PROFIT-LICENSE
NON-COMMERCIAL USE LICENSE AGREEMENT
DOES NOT APPLY TO FOR-PROFIT ENTITIES. NOT-FOR-PROFIT ENTITIES CONDUCTING
COMMERCIAL ACTIVITIES MUST CALL CLONTECH FOR A LICENSE (1-800-662-2566).
LICENSE FOR LIVING COLORS-Registered Trademark- LICENSED PRODUCTS
IMPORTANT INSTRUCTIONS--READ CAREFULLY: This Non-Commercial Use License
Agreement (this "Agreement") is the legal agreement between you, your
not-for-profit organization (hereinafter Licensee), which purchased the Products
and Aurora Biosciences Corporation ("Aurora") (hereinafter Licensor), together,
the Parties, for the non-commercial use of the Living Colors-Registered
Trademark- Licensed Products (hereinafter the "Products") identified above.
Clontech is the co-exclusive licensee of Aurora for the sale of the Products to
not-for-profit organizations for non-commercial use.
AS A CONDITION OF THE SALE OF THE PRODUCTS AND PRIOR TO THE OPENING OF PACKAGING
ENCLOSING THE PRODUCTS, AURORA AND LICENSEE AGREE AS FOLLOWS:
1. PRODUCTS ARE FOR NON-COMMERCIAL USE, RESEARCH, BY YOU, THE LICENSEE.
LICENSEE SHALL USE THE PRODUCTS SOLELY FOR THE PURPOSE OF CONDUCTING INTERNAL,
NON-COMMERCIAL RESEARCH AT THE NOT-FOR-PROFIT ORGANIZATION ("RESEARCH"). THE
LICENSEE MAY MODIFY THE NON-CODING REGION OF THE PRODUCTS TO FACILITATE
RESEARCH. THE LICENSEE WILL NOT MODIFY THE CODING REGION OF THE FLUORESCENT
PROTEIN OF THE PRODUCTS. Licensee may allow access to the Products to employees
and students for purposes consistent with this Agreement provided that prior to
such disclosure, such individuals shall have been apprised of the proprietary
nature of the Products, Licensee will not sell, transfer, disclose or otherwise
provide access to the Products to any person or entity, except as expressly
permitted herein. Licensor and Licensee acknowledge that Licensee shall not
have the right to authorize any third party to use or sell any Products or
derivatives thereof. LICENSEE ACKNOWLEDGES THAT THE PRODUCTS SHALL NOT BE USED
FOR ANY EXPERIMENT OR ACTIVITY WHERE A FOR-PROFIT ORGANIZATION FUNDS IN WHOLE OR
IN PART, SUCH ACTIVITIES OR POSSESSES ANY PRESENT OR FUTURE INTELLECTUAL
PROPERTY OR CONTRACT RIGHT IN SUCH ACTIVITIES.
2. SORRY, THERE ARE SOME PROHIBITED USES OF THE PRODUCT. Because a second
license is required for certain uses of the Products, Products will not be used
in the following fields: (i) services to for-profit Third Parties (e.g.
screening and profiling); (ii) databases subscription/access paid for by a
for-profit entity; (iii) diagnostics; (iv) screening for more than 1,000
chemicals in a single year to identify useful chemicals; (v) profiling more than
100 chemicals in a 12 month period for: selectivity, bioavailability, drug
metabolism or toxicity; (vi) promoterless vectors for integration into a
mammalian genome using non-
1
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homologous recombination integration methods (e.g. random integration; or
(vii) a quality control or assurance process for the manufacture of a product
for sale.
3. YOU MUST CONDUCT RESEARCH WITHIN THE LAW AND THERE ARE SOME PRECAUTIONS.
Upon receipt of the Products, Licensee shall conduct the Research utilizing its
expertise and facilities in strict accordance with all applicable state and
federal laws, regulations and guidelines. Licensee understands that the
Products, under certain circumstances, may have biological and/or chemical
properties that are unpredictable and unknown at the time of transfer, that they
are to be used with caution and prudence, and are not to be used for testing in
or treatment of humans.
4. YOU MAINTAIN THE RIGHT TO PUBLISH RESEARCH RESULTS. Licensee shall have
the right to use all results solely for research and other non-commercial
purposes, such as publication of scientific articles and public presentation of
research results.
5. PROPRIETARY AND PROPERTY RIGHTS. Licensor hereby grants to Licensee a
non-exclusive right to use the Product after the Effective Date in accordance
with the terms of this Agreement. Title to the Products shall not transfer
to the Licensee. Licensor retains all rights not expressly granted herein
and there are no implied licenses granted herein. If the Licensee breaches
this contract any intellectual property rights created with the use of the
Products will be assigned to Aurora. The Products are provided under at
least one of the following: U.S. Patents 5,625,048 or 5,777,079; and
Published PCT Applications: WO96/23810, WO97/28261, WO98/63737 or WO98-02571.
Additional patent rights are pending worldwide.
6. DO NOT MISUSE THE PRODUCTS AND INDEMNIFICATION. Licensee will defend,
indemnify and hold Licensor, Clontech, The Regents of the University of
California and the Howard Hughes Medical Institute, their managers, directors,
officers, employees, sponsors and agents (collectively the "Indemnified
Parties") harmless against any and all liability, loss, damage, claim or
expense, including attorney's fees, (collectively the "Indemnified Losses")
arising out of or in connection with this Agreement, including, without
limitation Indemnified Losses resulting from any use by the Licensee, Licensee'
employees or students of the Products and any materials derived therefrom.
Licensee will indemnify and hold harmless the Indemnified Parties against any
and all Indemnified Losses resulting from, arising out of or relating to: (i)
product liability claims of any nature; (ii) claims arising from Licensee's
failure to comply with all governmental regulations relating in any to use or
storage of the Products; (iii) Licensee's breach of this Agreement; and (iv)
claims by a third party that Licensee, Licensee's employees or students use of
the Products infringes or violates any patent, copyright, trademark or property
rights of such third party.
7. LIMITED WARRANTY. Clontech warrants that, at the time of shipment, the
products sold by it are free from defects in material and workmanship and
conform to specifications, which accompany the product. Licensor and Clontech
make no other warranty, express or implied with respect to the products,
including any warranty of merchantability or fitness for any particular purpose
or that the Products do not infringe an patent. Notification of any claim for
breach of warranty must be made within sixty (60) days of receipt unless
provided in writing by Licensor and Clontech. No claim shall be honored if the
Licensee fails to notify Clontech within the
2
<PAGE>
period specified. The sole and exclusive remedy available to Licensee for
any liability of Clontech and Licensor whether based upon warranty, strict
liability, contract or otherwise, is limited to the replacement of the goods
or the refund of the invoice price of the goods. Clontech and Licensor shall
in no case be liable for special, incidental or consequential damages of any
kind.
8. TERM. This Agreement shall commence on the date indicated by the licensee
below or upon opening of the packaging (the "Effective Date"), which ever is
earlier, and continue in force as long as the Products are used in the case of
non-commercial use in a not-for-profit organization.
9. TERMINATION. Either party may terminate this Agreement for any reason upon
thirty (30) days' written notice to the other party. The rights and obligations
under Sections 1, 3, 4, 5, and 6 shall survive any termination, expiration or
completion of this Agreement with respect to information generated and
activities and events occurring prior thereto. Upon expiration or any
termination of this Agreement, Licensee shall promptly return to Aurora or
destroy, as Aurora directs, all remaining Products, and if applicable all
Products cloned, replicated or otherwise reproduced.
10. ENTIRE AGREEMENT AND ASSIGNABILITY. This Agreement, together with the
exhibits attached hereto, sets forth the complete and entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes and
terminates all prior agreements and understandings between the parties hereto.
No subsequent amendment or addition to this Agreement shall be binding upon the
parties hereto unless reduced to writing and signed by the respective authorized
officers of the parties hereto. This Agreement shall not be assigned or
otherwise transferred by Licensee.
11. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by the
laws of the State of California. Any dispute resolution or litigation
concerning this Agreement will occur in the State of California or the United
States District Court in California.
Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
By:
- ------------------------------------------------------------------------------
Title:
- ------------------------------------------------------------------------------
Date:
- ------------------------------------------------------------------------------
3
<PAGE>
EXHIBIT E
NOT-FOR-PROFIT ZIP-LOCK LICENSE
NON-COMMERCIAL USE LICENSE AGREEMENT
DOES NOT APPLY TO FOR-PROFIT ENTITIES. NOT-FOR-PROFIT ENTITIES CONDUCTING
COMMERCIAL ACTIVITIES MUST CALL CLONTECH FOR A LICENSE (1-800-662-2566).
LICENSE FOR LIVING COLORS-Registered Trademark- LICENSED PRODUCTS
IMPORTANT INSTRUCTIONS--READ CAREFULLY: This Non-Commercial Use License
Agreement ("Zip-Lock Agreement") is the legal agreement between you, your
not-for-profit organization (hereinafter Licensee), which purchased the Products
and Aurora Biosciences Corporation ("Aurora") (hereinafter Licensor), together,
the Parties, for the non-commercial use of the Living Colors-Registered
Trademark- Licensed Products (hereinafter the "Products") identified above.
Clontech is the co-exclusive licensee of Aurora for the sale of the Products for
non-commercial use.
AS A CONDITION OF THE SALE OF THE PRODUCTS AND PRIOR TO THE OPENING OF PACKAGING
ENCLOSING THE PRODUCTS, AURORA AND LICENSEE AGREE AS FOLLOWS:
1. PRODUCTS ARE FOR NON-COMMERCIAL USE, RESEARCH, BY YOU, THE LICENSEE.
LICENSEE SHALL USE THE PRODUCTS SOLELY FOR THE PURPOSE OF CONDUCTING INTERNAL,
NON-COMMERCIAL RESEARCH AT THE NOT-FOR-PROFIT ORGANIZATION ("RESEARCH"). THE
LICENSEE MAY MODIFY THE NON-CODING REGION OF THE PRODUCTS TO FACILITATE
RESEARCH. THE LICENSEE WILL NOT MODIFY THE CODING REGION OF THE FLUORESCENT
PROTEIN OF THE PRODUCTS. Licensee may allow access to the Products to employees
and students for purposes consistent with this Zip-Lock Agreement provided that
prior to such disclosure, such individuals shall have been apprised of the
proprietary nature of the Products. Licensee will not sell, transfer, disclose
or otherwise provide access to the Products to any person or entity. Licensor
and Licensee acknowledge that Licensee shall not have the right to authorize any
third party to use or sell any Products or derivatives thereof. LICENSEE
ACKNOWLEDGES THAT THE PRODUCTS SHALL NOT BE USED FOR ANY EXPERIMENT OR ACTIVITY
WHERE A FOR-PROFIT ORGANIZATION FUNDS IN WHOLE OR IN PART, SUCH ACTIVITIES OR
POSSESSES ANY PRESENT OR FUTURE INTELLECTUAL PROPERTY OR CONTRACT RIGHT IN SUCH
ACTIVITIES.
2. SORRY, THERE ARE SOME PROHIBITED USES OF THE PRODUCT. Because a second
license is required for certain uses of the Products, Products will not be used
in the following fields: (i) services to for-profit Third Parties (e.g.
screening and profiling); (ii) databases subscription/access paid for by a
for-profit entity; (iii) diagnostics; (iv) screening for more than 1,000
chemicals in a single year to identify useful chemicals; (v) profiling more than
100 chemicals in a 12 month period for: selectivity, bioavailability, drug
metabolism or toxicity; (vi) promoterless vectors for integration into
1
<PAGE>
a mammalian genome using non-homologous recombination integration methods
(e.g. random integration; or (vii) a quality control or assurance process for
the manufacture of a product for sale.
3. YOU MUST CONDUCT RESEARCH WITHIN THE LAW AND THERE ARE SOME PRECAUTIONS.
Upon receipt of the Products, Licensee shall conduct the Research utilizing its
expertise and facilities in strict accordance with all applicable state and
federal laws, regulations and guidelines. Licensee understands that the
Products, under certain circumstances, may have biological and/or chemical
properties that are unpredictable and unknown at the time of transfer, that they
are to be used with caution and prudence, and are not to be used for testing in
or treatment of humans.
4. YOU MAINTAIN THE RIGHT TO PUBLISH RESEARCH RESULTS. Licensee shall have
the right to use all results solely for research and other non-commercial
purposes, such as publication of scientific articles and public presentation of
research results.
5. PROPRIETARY AND PROPERTY RIGHTS. Licensor grants to Licensee a
non-exclusive right to use the Products, after the Effective Date, in accordance
with the terms of this Zip-Lock Agreement. Title to the Products shall not
transfer to the Licensee. Licensor retains all rights not expressly granted
herein and there are no implied licenses granted herein. If the Licensee
breaches this contract any intellectual property rights created with the use of
the Products will be assigned to Aurora. The Products are provided under at
least one of the following: U.S. Patents 5,625,048 or 5,777,079; and Published
PCT Applications: WO96/23810, WO97/28261, WO98/63737 or WO98-02571. Additional
patent rights are pending worldwide.
6. DO NOT MISUSE THE PRODUCTS AND INDEMNIFICATION. Licensee will defend,
indemnify and hold Licensor, Clontech, The Regents of the University of
California and the Howard Hughes Medical Institute, their managers, directors,
officers, employees, sponsors and agents (collectively the "Indemnified
Parties") harmless against any and all liability, loss, damage, claim or
expense, including attorney's fees, (collectively the "Indemnified Losses")
arising out of or in connection with this Agreement, including, without
limitation Indemnified Losses resulting from any use by the Licensee, Licensee's
employees or students of the Products and any materials derived therefrom.
Licensee will indemnify and hold harmless the Indemnified Parties against any
and all Indemnified Losses resulting from, arising out of or relating to: (i)
product liability claims of any nature; (ii) claims arising from Licensee's
failure to comply with all governmental regulations relating in any to use or
storage of the Products; (iii) Licensee's breach of this Zip-Lock Agreement; and
(iv) claims by a third party that Licensee, Licensee's employees or students use
of the Products infringes or violates any patent, copyright, trademark or
property rights of such third party.
7. LIMITED WARRANTY. Clontech warrants that, at the time of shipment, the
products sold by it are free from defects in material and workmanship and
conform to specifications, which accompany the product. Licensor and Clontech
make no other warranty, express or implied with respect to the products,
including any warranty of merchantability or fitness for any particular purpose
or that the Products do not infringe an patent. Notification of any claim for
breach of warranty must be made within sixty (60) days of receipt unless
provided in writing by Licensor and Clontech. No claim shall be honored if the
Licensee fails to notify Clontech within the
2
<PAGE>
period specified. The sole and exclusive remedy available to Licensee for
any liability of Clontech and Licensor whether based upon warranty, strict
liability, contract or otherwise, is limited to the replacement of the goods
or the refund of the invoice price of the goods. Clontech and Licensor shall
in no case be liable for special, incidental or consequential damages of any
kind.
8. TERM. This Agreement shall commence on the date indicated by the licensee
below or upon opening of the packaging (the "Effective Date"), which ever is
earlier, and continue in force as long as the Products are used in the case of
non-commercial use in a not-for-profit organization.
9. TERMINATION. Either party may terminate this Agreement for any reason upon
thirty (30) days' written notice to the other party. The rights and obligations
under Sections 1, 3, 4, 5 and 6 shall survive any termination, expiration or
completion of this Zip-Lock Agreement with respect to information generated and
activities and events occurring prior thereto. Upon expiration or any
termination of this Zip-Lock Agreement, Licensee shall promptly return to Aurora
or destroy, as Aurora directs, all remaining Products, and if applicable all
Products cloned, replicated or otherwise reproduced.
10. ENTIRE AGREEMENT AND ASSIGNABILITY. This Zip-Lock Agreement, together with
the exhibits attached hereto, sets forth the complete and entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes and
terminates all prior agreements and understandings between the parties hereto.
No subsequent amendment or addition to this Zip-Lock Agreement shall be binding
upon the parties hereto unless reduced to writing and signed by the respective
authorized officers of the parties hereto. This Zip-Lock Agreement shall not be
assigned or otherwise transferred by Licensee.
11. GOVERNING LAW AND JURISDICTION. This Zip-Lock Agreement shall be governed
by the laws of the State of California. Any dispute resolution or litigation
concerning this Zip-Lock Agreement will occur in the State of California or the
United States District Court in California.
WHEN LICENSEE OPENS THE PACKAGE OR USES THE PRODUCTS, THIS ZIP-LOCK AGREEMENT IS
IMMEDIATELY BINDING.
3
<PAGE>
EXHIBIT F
UC LICENSE PROVISIONS
[*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1
<PAGE>
EXHIBIT G
CLONES
FLUORESCENT PROTEINS
[*]
[*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1
<PAGE>
EXHIBIT H
LIST OF FLUORESCENT PRODUCTS
FLUORESCENT PROTEINS
[*]
<TABLE>
<S> <C> <C> <C>
6004-1 pEYFP Vector 6085-1 pEGFP-N1 Vector
6005-1 pEYFP-C1 Vector 6086-1 pEGFP-1 Vector
6006-1 pEYFP-N1 Vector 6101-1 pCMS-EGFP Vector
6007-1 pEYFP-1 Vector 6115-1 pEYFP-Mito Vector
6008-1 pd2EGFP-1 Vector 6116-1 pEGFP-Actin Vector
6009-1 pd2EGFP-N1 Vector 6117-1 pEGFP-Tub Vector
6010-1 pd2EGFP Vector 6118-1 pEYFP-Tub Vector
6011-1 pNeoEGFP Vector 6154-1 pBI-EGFP Tet Vector
6012-1 pd2EGFP-Control Vector 6900-1 pECFP-N1 Vector
6013-1 pd2EGFP-Basic Vector 6901-1 pECFP-1 Vector
6014-1 pHygEGFP Vector 6902-1 pEYFP-Actin Vector
6015-1 pd2EGFP-Enhancer Vector 6903-1 pECFP-Mito Vector
6016-1 pd2EGFP-Promoter Vector 6904-1 pECFP-Nuc Vector
6029-1 pIRES2-EGFP Vector 6905-1 pEYFP-Nuc Vector
6032-1 pIRES-EYFP Vector 6906-1 pEYFP-ER Vector
6038-1 pBFP2 Vector 6907-1 pECFP-ER Vector
6039-1 pGFPmut3.1 Vector 6908-1 pECFP-Golgi Vector
6054-1 pNF-kB-d2EGFP Vector 6909-1 pEYFP-Golgi Vector
6058-1 pLEGFP-C1 Removiral Vector 8137-1 ApoAlert Annexin V-EGFP
6059-1 pLEGFP-N1 Removiral Vector 8920-1 pHAT-GFPuv Vector
6068-1 pEBFP Vector K2018-1 ApoAlert Apo2.7/Annexin V-EGFP Kit
6069-1 pEBFP-N1 Vector K2019-1 ApoAlert Annexin V-EGFP Apoptosis Kit
6070-1 pEBFP-C1 Vector K2019-2 ApoAlert Annexin V-EGFP Apoptosis Kit
6072-1 pd4EGFP-N1 Vector K6000-1 pEGFP-C Vector Set
6073-1 pd1EGFP-N1 Vector K6001-1 pEGFP-N Vector Set
6074-1 pEGFP-F Vector K6002-1 Bacterial Destabilized GFP Vector Set
6075-1 pECFP Vector
6076-1 pECFP-C1 Vector
6077-1 pEGFP Vector
6079-1 pGFPuv Vector
6080-1 pEGFP-N3 Vector
6081-1 pEGFP-N2 Vector
6082-1 pEGFP-C3 Vector
6083-1 pEGFP-C2 Vector
6084-1 pEGFP-C1 Vector
</TABLE>
[*]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at March 31, 1999 (Unaudited) and the Statement of Operations for the
three months ended March 31, 1999 (Unaudited), and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 7,703,933
<SECURITIES> 15,815,165
<RECEIVABLES> 5,006,121
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 31,165,998
<PP&E> 14,973,526
<DEPRECIATION> 3,992,357
<TOTAL-ASSETS> 48,656,689
<CURRENT-LIABILITIES> 10,952,295
<BONDS> 0
0
0
<COMMON> 17,043
<OTHER-SE> 33,475,126
<TOTAL-LIABILITY-AND-EQUITY> 48,656,689
<SALES> 0
<TOTAL-REVENUES> 6,519,064
<CGS> 0
<TOTAL-COSTS> 5,926,668
<OTHER-EXPENSES> 5,225,136
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 174,579
<INCOME-PRETAX> (4,423,753)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,423,753)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,423,753)
<EPS-PRIMARY> (0.26)
<EPS-DILUTED> (0.26)
</TABLE>
